The COVID-19 pandemic is still impacting the United States’economy. Even though the Internal Revenue Service delayed the tax filing deadline, many may still file early — if they haven’t already. Some taxpayers may be relying on their refunds for financial certainty after an uncertain year. Today, releases its newest survey results after asking more than 3,500 Americans how they plan to use most of their tax refund.

Review all recommendations for the “Best Ways to Use Your Tax Refund in 2021.”


  • Building savings is the most popular intended use (19%) for the 2021 tax season refund
    • About 14% plan to pay off existing debt
    • Around 8% want to use it on a household expense
    • Only 4.3% say they will invest it
  • Men are more likely to invest the tax refund (5.8%) or spend it (3.1%) on something fun
  • Women are more likely to save the tax refund (19.3%), use it pay off debt (15.4%), or use it for a household expense (8.7%)
  • The middle age groups (ages 35-44 and 44-54) chose “Other” as the most popular use for their tax refunds
    • All other age groups chose “Savings” as their most popular money option
  • Respondents age 25-34 are the most likely to invest their tax refunds or spend it on something fun
  • Nearly 35% of respondents do not expect a refund

A detailed analysis of the data (overall and broken down by age and gender) is available within the article.

“For many, 2020 was not just some sort of financial stress test, it was a true emergency.” observes Simon Zhen, senior research analyst and editorial director for MyBankTracker. “So, we recommend taxpayers put their refund for tax year 2020 toward increased financial security.”

Best Ways to Use Your Tax Refund

  1. Create a Bigger Emergency Fund – If this past year taught us anything, it’s to be prepared for the unexpected. A larger emergency fund to cover 12 or more months of necessities makes more sense than ever. It can be the difference between handling an unexpected expense or going into credit card debt. Calculate your living expenses for a year, including housing, utilities, and food. Tip: We recommend online savings accounts because they tend to have the best interest rates.
  2. Pay Down Debt – Zhen doesn’t mean to suggest paying down just any debt. “Focus on paying off debt that cannot be deferred or does not qualify for any hardship program. Examples of deferrable debt may include rent owed and mortgage payments. And, when you do pay down debt, you can save money by minimizing interest charges on the loan.”
  3. Invest Safely – While so many are still suffering from financial uncertainty, the stock market has performed surprisingly well throughout the pandemic. If taxpayers have fully funded an emergency fund and paid down outstanding debt, they can look into where to invest. They may be best off buying low-cost index funds that track the stock market as a whole.

Tax Tip: Use the IRS Withholding Calculator to get your refund as close to $0. Seeing a refund hit your bank account may be fun, but it means the government got an interest-free loan. If taxpayers keep that money, rather than lending it, they can use it to build an emergency fund, invest or pay down debt.

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