How to file your tax return and make the most of your refund

Tax season is a moment of opportunity for many of Glorines “Glory” Santiago’s clients.

Sometimes they use their tax refunds to pay off debt from the previous holiday season or year. But for Santiago, an Operation HOPE Inside financial well-being coach in Hollywood, Florida, the goal is for clients to use the moment to make lasting financial changes so the return becomes even more meaningful.

“One of my clients made a comment that stuck with me. She was looking [forward] to the tax return season more than Christmas … because [she was thinking], ‘I pay off my debt, I see my credit go up,’” she said.

Tax refunds can represent a large cash infusion for many American households, thanks in part to the Earned Income Tax Credit (EITC), the recently raised Child Tax Credit, and other tax laws. The average refund given this past year was more than $3,000 and the average so far this year is nearly $2,500, according to the IRS.

However, getting that money may look different this year depending on how you have filed your tax return and received a refund in the past. Here is what you should know.

The IRS has begun gradually phasing out paper tax payments and refunds as part of an official mandate, so taxpayers will increasingly need to pay their taxes and receive their refund digitally.

Effective September 30, 2025, Executive Order 14247 directs federal agencies like the IRS and U.S. Treasury to stop issuing most paper tax refunds in lieu of direct deposit or other digital options, with limited exceptions. The IRS is accepting checks and money orders for taxpayers making payments this year, but these methods are expected to be phased out over time.

Most Americans will opt to use direct deposit to receive their tax refund electronically into one or several bank accounts. About eight in 10 Americans choose this fast, secure, and trackable method, according to the IRS.

Regardless of how you choose to file your taxes, look out for IRS fraud. Be wary of texts or emails claiming to be from the IRS and requesting payment via gift cards, cryptocurrencies, prepaid cards, or wire transfers.

If you have a bank account, direct deposit is a straightforward way to receive your tax refund. Simply note your preference for direct deposit when filing your tax return. Whether you’re using a tax software, third-party site, or an in-person tax preparer, you’ll confirm your bank account’s routing number and account number.

If you file this way, you can expect to receive your refund in less than a few weeks; the IRS says nine in 10 refunds arrive in less than 21 days. And if you file your taxes electronically and choose direct deposit, your money has no chance of getting lost, stolen, or destroyed, according to the IRS.

There are ways to make the impact of your tax refund stretch further than tax season. With a little planning, that return may even save you money, help you reach financial goals year after year, and reduce money anxiety year-round, Santiago said.

“Education builds confidence, but planning builds control,” she said. “When you plan, you are in control of your life.”

Here are three strategies to consider making your tax refund go even further.

Pay off high-interest debt

Debt with a high interest rate, such as debt from a credit card or payday loan, can be difficult to pay off if you struggle to keep up with paying off the interest each month or billing cycle. By using your refund to pay down debt, you’ll reduce how much interest you’re paying.

“When you’re finished paying off that debt and your [credit] score has gone up, now you have that tax return as a down payment for your home,” Perez said.

Create or grow your emergency fund

An emergency fund isn’t just essential for covering unexpected costs. It could also be what keeps you from making a rushed or emotional decision that leads you to spending even more money, like if you need to borrow funds or end up spending more than you need to.

“We deal with natural disasters every year … you may have to buy food because you don’t have water or electricity,” Santiago said. “[Your emergency fund] could be $1,000 in a savings account or that could be your life savings.”

One rule of thumb is to have enough money set aside to cover three to six months’ worth of expenses, but whatever you can save will help.

Build long-term savings or investments

What if your tax refund could get even bigger? Perez recommends his clients consider putting their refund into certificates of deposit (CDs), accounts that require you to set aside a minimum amount, such as $2,500 or $5,000. Over a set term, your money will earn interest at a guaranteed rate if you don’t withdraw those funds prematurely.

By combining returns and other savings, you’ll be able to make better and bigger financial decisions or meaningful purchases, such as a car, house, or vacation.

“When you start seeing your money make more money, you’ll wonder, ‘Why didn’t I do this when I was younger?’” Perez sometimes says to his clients. “Not only are you changing your life right now, but you may also change the future for your kids by sharing your knowledge with them.”

Other long-term savings products include money market accounts and high-yield savings accounts, which can offer various levels of accessibility to your money.

Do you need help filing your taxes or receiving your tax refund? Consider free guided tax software or no-cost assistance in your community.

Volunteer Income Tax Assistance (VITA) sites provide free, IRS-certified tax help for low-income households, people with disabilities, and limited English-speaking taxpayers to ensure they receive eligible tax credits and deductions. In 2021 alone, 22% of qualifying households didn’t receive approximately $8.2 billion in EITC dollars (PDF).

If you qualify, using a free service could save you money. In Santiago’s community, a household’s average cost for using tax filing help is around $200, though that price tag could be more for some providers, she said.

With $1 million in funding, the Wells Fargo Foundation is supporting local organizations across the U.S. this tax prep season, to enable free tax returns and potential refunds for millions of households, according to Prosperity Now, a nonprofit promoting free tax help.

Beyond tax season, many VITA sites connect taxpayers to year-round financial coaching and public benefits help. And Operation HOPE coaches like Perez and Santiago at HOPE Inside Centers in select Wells Fargo branches across the country can help you as part of Wells Fargo’s Banking Inclusion Initiative. By the end of this year, this no-cost financial coaching will be offered at 50 HOPE Inside Centers serving more than 200 branches.

“Tax returns are a moment that matters,” said Nadia van de Walle, head of Wells Fargo’s Banking Inclusion Initiative. “Wells Fargo can play a critical role by helping you make that moment more of an on-ramp to a longer financial health journey and more of a commitment to your financial health.”