It’s March—the end of the first quarter –and many people may be waiting on a tax refund from the federal Internal Revenue Service (IRS), a commission payout or a bonus from their work in 2025.
An expected refund, commission or bonus can inspire exciting plans for spending this new money. Splurging on something self-indulgent might seem justified, and it’s natural to want to reward yourself with part or all of a tax refund, bonus or commission, this could feel like “extra” money separate from your regular pay. But a tax refund is money you’ve already earned; it’s part of your annual income. While having fun may be your first impulse, it’s still important to be intentional with how you use it. You can treat yourself and take care of yourself in ways that provide longer-term benefits.
Here are just a few ideas for managing your tax refund, commission or bonus money this year—including having fun with it
Pay your regular bills. If your job has been negatively affected, then the best thing you can do with any additional money is to stay current with your regular financial obligations, pay bills and pay down any additional debt you may have accumulated, such as credit card balance interest.
Add more to your savings or money market accounts—or get a certificate of deposit (CD). It's always a good idea to add to your savings. For many people, they start building their financial resources with a basic savings account. Saving accounts earn interest and can be linked to include direct deposit of a paycheck or to a checking account.
If you want to have a flexible account that can earn a higher rate of interest for your savings, look at a money market account. These accounts don't lock you into a fixed interest rate or long-term commitment. Often with these accounts, if you maintain a certain balance, you may earn dividends at a higher rate than a savings account.
A certificate of deposit is another way for you to watch your money grow at a higher interest rate than a savings account. It is like a savings account in that it helps you grow your money, but CDs are a time deposit. When you buy a CD, the money is invested for a fixed amount of time (fixed-term) and can be used once the certificate of deposit has matured—when the fixed-term is complete. CDs can be typically be invested for terms of 6, 12, 24, 36 or 60-months. Delta Community has competitive interest rates on its CDs, and the savings strategy of CD laddering can let you take advantage of interest rates while making cash regularly available.
Look to the future and put more money in an IRA or other retirement savings account. The additional funds you receive now can make a big difference in the future. If you use them to make an extra contribution to your Roth IRA or a traditional Individual Retirement Account (IRA), they could significantly increase by the time you retire. If you don't already have an IRA, use your refund/commission/bonus to jump-start one if you meet the eligibility requirements. The maximum IRA annual contribution limit in 2026 is $7,500 and $8,000 if your age is 50+.
Contribute more so your Health Savings Account is financially healthier. A health savings account (HSA) allows you to save money for expected healthcare expenses, and it also offers tax advantages. Be sure that you meet the HSA eligibility requirements. Maximum HSA contribution amounts for 2026 are $4,400 for yourself and $8,750 for families. The annual “catch-up” contribution amount for individuals age 55 or older is $1,000. Money saved in an HSA reduces your taxable income, which can add up to significant savings. Money taken out of your HSA for qualified medical expenses is tax-free and, similar to a 401(k) retirement account, the HSA is yours to keep.
Start—or continue adding to—a short-term emergency fund because life is uncertain. Finance professionals typically recommend saving the equivalent of three to six months worth of living expenses in a separate emergency fund to offset an unexpected job loss, medical emergency or other financial setback. Studies have shown that many Americans may not have a dedicated short-term emergency fund. That's why using your tax refund, commission or bonus payout to start or build up your savings is something you will be thankful for when you need it
Pay off high-interest debt, such as credit card bills, which could affect your cash flow and ability to save. One of the best ways to spend your tax refund is to eliminate credit card balances and other types of debt. Reducing high-cost debt not only relieves the stress of making monthly payments; it also enables you to save hundreds, or even thousands, of dollars over time. Even paying down part of your credit debt will help save money. Another option for cutting your debt is to take out a personal loan, or home equity line of credit, and you could then use that loan to pay off other debt that has a higher interest rate than the loan. By having a lower interest rate, you could then you have more money available to pay off the new, lower-interest loan faster.
Help others with a charitable donation and maybe help lower your taxes. If you're in an appropriate financial position, consider if you might want to help those in need with that additional money you’ve received. You could assist a family member or a friend who needs financial support, or give to a charitable organization. If the organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code then it is possible that your contribution may be tax deductible, usually for the year the donation is made. You could be helping others and helping yourself by lowering your 2026 taxes.
Do something good for yourself because you definitely deserve it and regular self-care is important. If you eliminate high-interest debt and fully fund your savings and emergency accounts, you may want to in a more personal reward to thank yourself for your disciplined money management. Consider treating yourself with something that you would enjoy.
What some people plan to do with a federal income tax refund, how to check on the status of a refund and other income tax-related news you could use
A 2025 National Retail Federation® (NRF) survey found that approximately 52 percent of those surveyed planned to use their tax refund to contribute to savings, while the next highest percentage, 32 percent, were going to use the refund to pay down debt. The third highest group of survey respondents, 30 percent, intended to use their refund for “everyday expenses.” These NRF survey results are great news, because one of the smartest things you can do with any extra income is use it for necessities, including increasing your savings and decreasing your debt. That’s why earlier in this post we offered a few recommendations to the question, “What should you do with your 2025 tax refund, commission or bonus money?"
Taxpayers should be able to check the status of the current year’s income tax refund with the IRS approximately 24 hours after e-filing it. If you filed a paper tax return, the IRS says that you should allow about four weeks before checking the status of the refund.
The IRS usually provides a free direct deposit option for savings accounts, allowing you to deposit your refund in up to three accounts in any U.S. financial institution, including checking, savings, health, education and certain retirement accounts.
Consider carefully whether you should adjust your withholdings for 2026 so you don’t get a refund next year. You have the option to decide to have so little money withheld from your paycheck in 2026 that you are sure not to receive a refund in 2027. While a tax refund may sound like a windfall, it really means you had overpaid your taxes. Consider not using withholding taxes as a sort of forced—but effective—savings plan; if the money isn't available to you because it's held by the federal government then it is easy to save what you can't access and spend. If you can manage it, you might be better off to give up the year-end refund and keep the extra cash in each paycheck to save, invest or use wisely throughout the year, rather than giving a loan to the U.S. government. We recommend consulting with a qualified attorney, accountant, financial advisor, or other appropriate representative before making any decisions based on the content provided above.
