Many Americans rely on the funds they get from their annual income tax return for some financial relief. With this influx of cash, some pay off debt while others splurge on vacations. However, there are some ways to use that extra money from the federal government to grow your refund and increase your savings.

How to Get the Most Out of Your Income Tax Return

1. High-Interest Savings

While it may be tempting to use your income tax return on a shopping spree or a long weekend trip, putting that money into a high-interest savings account is a better alternative. If your brick and mortar bank doesn’t offer a savings account with a high interest rate, turn to an online-only option. Many of these accounts don’t have minimum balance requirements or monthly fees, allowing you to maximize your refund.

2. College Account

Paying for college is a huge expense, so consider putting your tax refund toward a college 529 savings plan. Many states operate these plans like mutual funds, with higher earning potential and high interest rates. Each state is different, so make sure you understand the benefits of having an account in your state. However, no matter where you are, you'll be growing an account for your child or grandchild's education, and you'll also enjoy tax-free withdrawals when used toward college expenses.

3. Life Insurance

If you're expecting extra cash from your income tax return, put some money toward a long-term life insurance policy. While this may seem unnecessary if you're young, this policy will protect your loved ones after your passing. Some life insurance options even offer disability coverage or allow you to increase your coverage as you age.

If you need help preparing your taxes to ensure you get a maximum refund this year, contact the team at America’s Favorite Insurance & Tax in San Antonio, TX. These professionals stay up-to-date on all the latest legislative changes and requirements to help clients around the country avoid IRS fees and audits. When you’re ready to get started, give their office a call at (972) 662-8221. You can also visit them online for more tax information and resources.