5 Ways to Use Your Tax Refund This Year

Ready or not, tax season is here. This year in 2026, American taxpayers must be sure to file by Wednesday, April 15. Now, filing taxes probably isn't your idea of a "good time." But one thing can make it ALL feel worth it: the potential of getting a tax refund.

Whether your refund is big or small, you get to make a decision on how you want to use that money. Should you spend it, save it, invest it, or something else? Keep reading to learn the tax deadline, and explore a few ideas to help you decide how to use your tax refund this year.

When is Tax Season?

Tax season typically begins in Late January, when the IRS starts accepting federal tax returns. The season runs through April 15, which is the standard tax deadline for most American taxpayers. 

If April 15 falls on weekend or federal holiday, the deadline will shift to the following business day.

During tax season, many people gather documents like W-2s, 1099s, and mortgage interest statements to file their returns (or work with a tax professional). Filing early can help you avoid stress, catch errors sooner, and potentially receive your tax refund faster.

Tax extensions are available, but they generally give you more time to file—not more time to pay. Therefore, it's important to plan ahead!

What Should I Do with My Tax Refund?

1. Contribute to Your Emergency Fund

If you don’t have an emergency fund, you’re not alone. According to a Bankrate survey in early 2026, less than half of Americans (47%) indicated they have enough liquidity to cover a $1,000 emergency expense. That means 53% of Americans cannot cover the expense.

But emergency funds, or “peace of mind” accounts, as we like to call them, are essential to having a healthy financial life. Think about all the unexpected expenses that can arise—anything from a broken-down car to a PCS move. As we know, PCS moves are never cheap. Having a little extra money saved can make a BIG DIFFERENCE when it comes to life’s surprises.

If you don’t have an emergency fund yet, don’t be ashamed—it’s never too late to start one! And using some of your tax refund for this purpose could be the perfect way to get started. Even if you don't use the entire amount of your refund for your emergency fund, starting small is better than not starting at all.

Once your emergency fund is established, consider contributing a bit to your fund each month. Your motivation, confidence, and peace of mind will grow along with your emergency fund balance.

2. Save with the Future in Mind

Contributing to your emergency fund isn’t the only way your tax refund can help you prepare for the future. For example, what are you saving for right now? Whether you’re putting money in your Thrift Savings Plan (TSP) retirement account, saving for a down payment on a house, or saving for something else, using some money from your tax refund is a great way to give these accounts a boost.

Here’s another way you can invest in the future: your children's future! You could direct some of your tax refund into an education savings account for your child or children. If you haven’t already, you can set up a 529 plan that can help your children pay for higher education and associated expenses. And remember, if your first child doesn’t use all the money in the account, it can be transferred to another child!

Need help creating a long-term plan for your child's education? Use a College Savings Calculator to see how small contributions can add up over time.

3. Tackle Debt Repayment

Debt often feels like a heavy weight on our shoulders, especially when we’re working hard to build a financially healthy future. But the truth is that most people have debt—according to CNBC, the average American carried a balance of $104,755 in June of 2025. This debt includes credit card debt, auto loans, student loans, mortgage loans, personal loans, etc.

Using your tax refund to pay off some of your debt may feel like a small step, but it can help you get on the right track! There are a couple of different debt repayment strategies, so think about which one makes more sense for you: the snowball method and avalanche method.

With the snowball method, you pay off your smaller debts first to help build confidence and motivation in the debt repayment process. With the avalanche method, you pay debts with the highest interest rate first. Either way, your tax return can help you make a dent in your debt!

4. Have Some Fun

It’s no secret that the past few years have been stressful: personally and financially. So if you find yourself with some extra funds thanks to your tax return, it’s ok to think about spending it on yourself and your family.

If there’s a way you can spend your tax return to make your life more pleasant, it’s worth it! Whether that’s a weekend getaway, a spa day, a cooking class, or something else … using your tax refund in this way can DO WONDERS for your mental and emotional wellbeing. And that’s important, too!

5. Start Building Your Credit with a Credit Builder Credit Card

Credit isn’t always easy to understand. Not only is a credit score a combination of different factors, but it can impact your life in a variety of ways. If your credit score isn’t high enough, you may have a hard time getting approved for a mortgage or auto loan. But there are other situations in which you may be asked for your credit score. For example, it may be considered when you apply for car or home insurance, or even when you apply for a new job.

Are you looking to establish or build credit? If so, it could be a good idea to use your tax refund as a deposit for a new secured credit card. Because secured credit cards are backed by a cash deposit, they can then be used if you default on your payment. And this means it’s less risky for you. With a secured credit card, you can boost your credit score by making everyday purchases and then repaying in full.

An Armed Forces Bank Credit Builder Secured Visa Credit Card* is perfect for those looking to improve their credit score. With automatic reporting to all three major credit bureaus, Armed Forces Bank is here to help you build a better credit history!

Armed Forces Bank is Committed to Your Financial Goals

No matter what your financial goals are, Armed Forces Bank is working hard to help you achieve them. If you are looking for a partner in your personal finance journey, we provide convenient options for savings accounts, checking accounts, and more.

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