Most Americans expect a tax refund this year — and many are counting on it. A new TurboTax survey found that nearly 7 in 10 Americans (69%) expect a refund, with most planning to use the money to shore up savings or cover everyday expenses.
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Here’s a closer look at how Americans are planning to use their refunds, and how to determine the best way to use yours.
Many Americans Plan To Put Their Tax Refunds Into Savings
The TurboTax survey found that 44% of Americans plan to put at least some of their refunds into savings.
Lisa Greene-Lewis, CPA and tax expert for Intuit TurboTax, recommended utilizing your refund to pay off any high-interest credit card debt first, and then putting at least some of what you have left over into a savings account — especially if you don’t have an emergency fund.
“Putting the funds in savings is also wiser than leaving the money in checking, as savings can earn interest and you may be more inclined to spend all of the money left in your checking account,” Greene-Lewis said.
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About 4 in 10 Americans Will Use Their Refunds To Cover Everyday Expenses
According to the survey, 41% of Americans plan to use their refunds to pay for necessities.
“In a time with continuously rising costs and economic uncertainty, this is not surprising,” Greene-Lewis said. “Tax refunds have become a lifeline for many Americans.”
TurboTax’s data shows that many Americans who expect a refund are using it to cover necessary expenses like rent, groceries and bills, underscoring just how stretched household budgets remain.
One-Third of Americans Plan To Use Their Refunds To Pay Down Debt
Finally, 35% of Americans will pay down debt with their refunds.
“While many aim to save their refund or pay down debt, a majority rely on refunds for essential expenses, which is a trend we saw last year but has grown this year,” Greene-Lewis said.
How To Use Your Tax Refund Wisely
While many Americans have a plan for what to do with their tax refunds, the majority do not feel confident that they are taking the best course of action. The survey found that more than half (52%) of those expecting a refund say they wish they had help figuring out the smartest financial move for that money.
Greene-Lewis recommended prioritizing the following financial needs when deciding how to use your refund:
- If you have debt and have not yet started building an emergency fund, prioritize paying the debt down, then start building or increasing your emergency fund.
- Once you have used some of your refund to pay down debt and to build an emergency fund, consider investing in your retirement. You can contribute up to $7,500 to your IRA for 2026 — and an additional $1,100 if you are age 50+ — which can both boost your long-term savings and give you a head start on tax savings for your 2026 taxes.
It’s also OK to use a portion of your refund to treat yourself.
“It doesn’t have to be all paying down debt and investing,” Greene-Lewis said. “Just make sure you leverage your refund to help boost your finances before spending your entire refund.”
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This article originally appeared on GOBankingRates.com: TurboTax Survey: Top 3 Ways Americans Plan To Use Their Tax Refunds This Year
