Key Points
At this point, a lot of people have filed their 2025 tax returns.
The average tax refund in 2026 is considerably larger than it was a year ago.
If you're getting a large payday from the IRS, it's important to put it to good use.
- The $23,760 Social Security bonus most retirees completely overlook ›
At this point, a lot of people have filed their 2025 tax returns. And if yours hasn't been submitted yet, the time to get moving is now.
The IRS still has a lot of tax returns to process for the 2026 filing season. But as of late March, it had processed more than 87 million and issued close to 63 million refunds.
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If you're getting a tax refund this year, you may be wondering how it compares to the average filer's. Here's what you need to know.
What the average tax refund looks like so far
As of March 27, the average 2026 tax refund was $3,521. That's an 11.1% increase from the average tax refund distributed a year ago.
A big reason tax refunds are much higher this year is that the One Big Beautiful Bill Act introduced a number of significant tax changes. It boosted the child tax credit, introduced a new $6,000 senior deduction, and allowed for a new deduction on tips and overtime, among other things.
How to put your tax refund to good use
If you're expecting a larger tax refund this year than in previous years, it's important to put that money to good use. This holds true whether your tax refund is higher than the average, lower, or about the same.
Here are some great ways to maximize that IRS check:
- Build yourself an emergency fund, or boost your current near-term savings. If possible, aim for three to six months of living costs in cash.
- Pay down high-interest debt. It generally makes sense to start with credit cards and then work your way down toward installment loans.
- Put more money away for retirement. Boost your contributions to your employer's 401(k) plan, or fund an IRA if you don't have access to a workplace plan.
- Invest for retirement outside of a tax-advantaged account. IRAs and 401(k)s are great but come with restrictions, so you may want to invest in a taxable brokerage account.
- Fund a health savings account. If you're eligible for an HSA, you can enjoy three distinct tax breaks: pre-tax contributions, tax-free gains, and tax-free withdrawals.
- Grow your skills for better pay. Take a class, go back to school for an advanced degree, or attend conferences that teach you new things.
You may be sitting on a larger tax refund this year than what you're used to. It's natural to want to spend that money on something fun. But if you use your tax refund to improve your financial situation, you might really be grateful for it in the long run.
The $23,760 Social Security bonus most retirees completely overlook
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