TurboTax: How Americans plan to use refunds

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Most Americans are expecting a tax refund this year – and many are counting on it. New one TurboTax The survey found that nearly 7 in 10 Americans (69%) expect a refund, with most planning to use the money to increase savings or cover everyday expenses.

Here’s a closer look at how Americans plan to use their refunds, and how to determine the best way to use yours.

Many Americans are planning to put their tax refunds into savings

The TurboTax survey found that 44% of Americans plan to put at least some portion of their refund toward savings.

Lisa Green-Lewis, CPA and tax expert at Intuit TurboTax, recommends using your refund to pay off any high-interest credit card debt first, and then put at least some of what’s left into a savings account — especially if you don’t have an emergency fund.

“It also makes sense to put money into savings rather than leaving the money in checking, because savings can earn interest and you may be more inclined to spend all the money left in your checking account,” Green-Lewis said.

Nearly 4 in 10 Americans will use their refund to cover everyday expenses

According to the survey, 41% of Americans plan to use their refunds to pay for necessities.

“At a time of ever-rising costs and economic uncertainty, this is not surprising,” Green-Lewis said. “Tax refunds have become a lifeline for many Americans.”

Data from TurboTax shows that many Americans who expect a refund are using it to cover essential expenses like rent, groceries and bills, underscoring how stretched household budgets are.

One-third of Americans plan to use their refunds to pay off debt

Ultimately, 35% of Americans will pay off debt with their refund.

“While many people aim to save their refund or pay off debt, the majority rely on refunds for essential expenses, which is a trend we saw last year but has increased this year,” Green-Lewis said.

How to Use Your Tax Refund Wisely

While many Americans have a plan for what to do with their tax refund, the majority aren’t confident they’re taking the best course of action. The survey found that more than half (52%) of people expecting a refund say they wish they had help figuring out the smartest financial move for that money.

Green-Lewis recommends prioritizing the following financial needs when deciding how to use your refund:

• If you have debt and haven’t started building an emergency fund yet, prioritize paying off debt then starting to build or grow your emergency fund.
• Once you’ve used part of your refund to pay off debt and 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’re age 50+ – which can boost your long-term savings and give you a head start on tax savings for your 2026 taxes.

It’s also okay to use a portion of your refund to treat yourself.

“It’s not all just about paying down debt and investing,” Green-Lewis said. “Just make sure you’re taking advantage of your refund to help boost your finances before you spend your entire refund.”