IRS issues tax refund update: Average check drops from $3,700 — but there’s a silver lining for Americans. What will you do with your cash?

That’s up $352 — or about 11% — from $3,271 at the same point in 2025. In total, the IRS has refunded about $182.6 billion so far, a $19.6 billion increase, or roughly 12%, year over year.

In other words, refunds are indeed higher this year, though not quite as high as some earlier figures suggested.

On March 10, the Treasury Department said the average refund had topped $3,700 based on 63.5 million processed returns (1). That figure quickly became a talking point for the Trump administration, which credited the increase to provisions in the “One Big Beautiful Bill,” including tax breaks on tips, overtime pay, car-loan interest and enhanced deductions for older Americans.

“Halfway through this filing season, the Working Families Tax Cuts are already delivering meaningful relief to middle- and low-income taxpayers, increasing after-tax income and putting more money back into the pockets of American families, workers and small business owners,” Treasury Secretary Scott Bessent said in a statement.

Notably, the Treasury said nearly 45% of filers have already claimed at least one of the new tax breaks on Schedule 1-A. More than 3.5 million returns claimed no tax on tips, 15.5 million claimed no tax on overtime, 9.2 million used the enhanced deductions for seniors, and more than 690,000 wrote off car-loan interest.

If you haven’t filed yet, you can find the new IRS Schedule 1-A and its related instructions — which allow filers to claim these new deductions — here.

Trump himself has also highlighted the size of this year’s refunds (3), saying they “are substantially greater than ever before,” and even cautioning Americans: “Don’t spend all of this money in one place!”

The latest IRS data suggests the boost is real, even if the headline figure has come down slightly. And for many households, that raises an immediate question: what’s the smartest way to use a sudden cash infusion?

Whether you’re thinking about shoring up your finances, preparing for uncertainty or putting that extra money to work, here are a few ways Americans may consider investing their potential windfall.

‘The best thing to do,’ according to Warren Buffett

The U.S. stock market has long been a powerful engine of wealth creation. Trump has pointed to that strength (4), recently saying that “the only thing that’s really going up big? It’s called the stock market and your 401(k)s.”

The benchmark S&P 500 returned about 16% in 2025 and, despite a recent pullback, is up roughly 61% over the past five years (5).

Of course, consistently picking winning stocks isn’t easy. That’s why legendary investor Warren Buffett argues that most people don’t need to pick individual companies at all to benefit from the stock market’s long-term growth.

“In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett has famously stated (6). This approach gives investors exposure to 500 of America’s largest companies across a wide range of industries, providing instant diversification without the need for constant monitoring or active trading.

The beauty of this approach is its accessibility — anyone, regardless of wealth, can take advantage of it. Even small amounts can grow over time with tools like Acorns, a popular app that automatically invests your spare change.

Signing up for Acorns takes just minutes: link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio.

With Acorns, you can invest in an S&P 500 ETF with as little as $5 — and, if you sign up today with a recurring investment, Acorns will add a $20 bonus to help you begin your investment journey.

Build wealth through US real estate

Beyond stocks, real estate has long been another cornerstone of wealth-building in America.

In fact, Buffett often points to real estate when explaining what a productive, income-generating asset looks like. In 2022 (7), Buffett stated that if you offered him “1% of all the apartment houses in the country” for $25 billion, he would “write you a check.”

Why? Because regardless of what’s happening in the broader economy, people still need a place to live and apartments can consistently produce rent money.

Real estate also offers a built-in hedge against inflation. When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts with inflation.

Of course, you don’t need $25 billion — or even to buy a single property outright — to invest in real estate. Crowdfunding platforms like Mogul offer an easier way to get exposure to this income-generating asset class.

Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 a.m. tenant calls.

Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide for you. In other words, you gain access to institutional-quality offerings for a fraction of the usual cost.

Each property undergoes a rigorous vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.

You can sign up for an account and then browse available properties here.

Another option is Lightstone DIRECT, which offers accredited investors access to institutional-quality multifamily and industrial real estate, with a minimum investment of $100,000.

Founded in 1986 by David Lichtenstein, Lightstone Group is one of the largest privately held real estate investment firms in the U.S., with more than $12 billion in assets under management.