How to Make the Most of Your Tax Return

February 26, 2026

Tax season is in full swing, with many people already filing and receiving their returns. Many people wonder how they can increase their tax refund and what to do with it once it’s received. Keep reading as we give tips on how you can make the most of your tax return.

Ways to Increase Your Tax Refund

There are several factors that determine how much you pay in taxes each year. Let’s go over what some of those factors are.

1. Filing Status

Your filing status typically depends on whether you’re married or single by the end of the year. The status you use when filing will impact your refund amount. Here are the five different statuses you can file:

• Single
• Married Filing Jointly
• Married Filing Separately
• Head of Household
• Qualifying Surviving Spouse

Let’s go over what each of these filing statuses means.

Married Filing Jointly vs. Separately (for married couples)

If you are married and filing separately, you could be missing out on some tax benefits. The times when filing separately could be more beneficial than filing jointly are if you or your spouse had a large amount of out-of-pocket medical expenses during the year, if you have student loans that are determined by the income on your tax return, or if you are preparing for divorce.

When filing jointly, you’ll be receiving advantages such as higher standard deductions, lower tax brackets, and increased tax credits.

Head of Household vs. Single (for unmarried people)

The scenarios where it could be more beneficial to file as head of household are if you can claim a qualifying dependent or if you care for your elderly parents. It’s important to note that in order to qualify as head of household if you’re taking care of a parent, you need to be providing more than half of your parent’s financial support.

2. Tax Credits

Tax credits can help increase your refund or decrease the amount you owe. Here’s how they work:

Tax credits are dollar-for-dollar reductions on your final income tax bill. For example, if you owe $1,000 in taxes but qualify for a $1,000 tax credit, your tax liability is zero. If the credit is higher than what you owe, the government will pay you the difference in a refund.

3. Tax Deductions

If you take advantage of tax deductions correctly, you could reduce your taxable income, possibly increasing your refund. Some examples of deductions are mortgage interest, student loan interest, and charitable contributions.

Ways to Spend Your Tax Refund

There are so many things you can do with your tax refund, many of them being smart financial moves. Let’s go over some smart ways you can use your tax refund this year.

1. Pay Off Credit Card Debt

If you have any credit card debt, pay it off asap to avoid the high interest rates that a lot of credit cards have. Your debt will only increase the longer you avoid paying it. If you have more than one credit card that has debt built up, you’ll have to choose which one you want to pay off and how you’ll pay it. For example, there is a method called the avalanche method, where you pay off the debt with the highest interest rate first. Contrary to that, there’s a method called the snowball method, where you pay off debt that has the lowest balance first. To learn more about these methods, read our blog.

2. Add to Your Retirement Savings

No matter your age, it’s always a smart financial choice to think about your retirement and save for it. If you choose to add your tax return to your retirement savings, your future self will thank you.

3. Add to Your Emergency Fund

Similar to adding to your retirement savings, adding to your emergency fund is a great financial choice. Unexpected expenses pop up when you least expect them, and they will surely happen.

4. Add to a College Savings Fund

Do you have kids who you’d like to help pay for college? Setting your tax return in a college fund for them will help make paying for college a bit easier when the time comes.

5. Invest in Your Home

If you have any smaller home projects that you’ve been wanting to do but have been saving money to do them, using your tax return for home projects could be a great option for you. Some options include backsplash updates, hardware updates, carpet installation, and enhancing landscape.