Growing Green Savings Challenge: Protect and Make the Most of Your Tax Refund

Tax refund season offers many people an opportunity to reflect on their financial picture. As part of its financial education resources, our partners at GreenPath highlights several common ways individuals choose to use their tax refunds, depending on their goals and priorities!

1. Tackle Debt

While this may be a less exciting alternative to booking a weekend vacation, paying off credit card debt is a crucial step towards creating a healthy financial picture. Put your refund towards the credit card balance with the highest interest rate—this is the card costing you the most in the long run. The benefits of paying down debt are twofold: freeing up funds that would normally go towards high interest and giving your credit score a boost.

2. Fund Emergency Savings

How prepared would you be in an emergency? If the mere thought is stress-inducing, you are not alone. 57% of Americans are unable to handle a $1,000 unexpected expense, and 81% of Americans did not increase their emergency fund last year at all.

When creating an emergency fund (or even just saving money for a rainy day), you can deposit a percentage of your tax refund into a designated savings account and then set up automated weekly or monthly deposits. Even regular contributions between $50 and $100 add up over time, and when the unexpected happens, you will be less likely to rely on credit cards.

3. Plan for the Future

What are your long-term financial goals? Do you want to build your retirement fund or save up for your children’s future education? It is never too late to start saving, and your tax refund deposit can be a great building block to get your started or lump sum contribution if you have already laid the groundwork with an IRA or 529 plan.

4. Upgrade your Home

A little investment into your living space can go a long way. Are there any home upgrades that might decrease your monthly energy bills (for example switching to a smart thermostat or installing solar panels)? Might this be the time to replace an outdated appliance or upgrade fixtures in the bathroom? In addition to improving the functionality and aesthetic of your home, you will increase the resale value of your property.

5. Start a Side Business

If you are regularly trading business ideas with friends or daydreaming about creative side ventures (like starting a photography business or opening an online store for homemade goods) your tax refund can be the seed money that brings your ideas to fruition.

IRS “Dirty Dozen” Tax Scams: What Taxpayers Are Being Warned About

In addition to refund planning, the Internal Revenue Service publishes an annual list known as the “Dirty Dozen”, which highlights common tax‑related scams observed during filing season and throughout the year.
For 2026, the IRS continues to warn taxpayers about scams that attempt to create urgency or fear, including:

• Emails, text messages, and social media posts impersonating the IRS
• Phone calls using spoofed numbers or artificial intelligence to sound legitimate
• Misleading tax information shared online, including false refund or credit claims
• Unlicensed or “ghost” tax preparers who refuse to sign returns or promise unusually large refunds

The IRS emphasizes that it does not initiate contact through email, text messages, or social media to request personal or financial information. Awareness of these common tactics can help taxpayers recognize potential fraud before taking action. Find out more here – Dirty Dozen Tax Scams for 2026

Part of this article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit. This information is for educational purposes only and should not be considered financial or legal advice. Additional information pulled from irs.gov.