For 2026, the average tax refund is just over $2,000 for most filers. While some people treat that money as extra cash to spend on something fun, you may not realize you can leverage part of your tax refund into massive savings on your phone bill for the entire year.
Some of the best ways to save include:
- Buying an annual phone plan
- Paying off your device and switching carriers
- Skipping the carrier upgrade and buying an unlocked phone
The average American family pays around $244/month for their cell phone bill. For many customers, that includes both the plan itself and device installment fees.
By switching to a prepaid annual plan or using unlocked devices, you can lower your phone bill to as low as $25/month per line. For a family of four, that could equal a savings of over $1,700/year.
Let's dive into all these methods and figure out how you can start saving on your phone bill as soon as your refund hits your bank account.
1. Buy an annual phone plan
This is one of the easiest ways to save with your tax refund: Buy a cheaper annual plan, score an extra discount, and stop thinking about your phone bill for the next 12 months.
Annual phone plans—also called yearly or 12-month plans—are prepaid plans that cover a full year of wireless service for a single upfront payment. MVNOs like Mint Mobile, Visible, and US Mobile offer them with an extra discount so you can save even more on their plans.
For each line you switch to an annual option on these carriers' most popular plans, the savings look like this:
- Mint Mobile Unlimited offers a $120/year discount
- The Visible plan gets a $25/year discount
- US Mobile Unlimited Starter gets a $30/year discount
While already impressive for single lines, the savings really stack up for families. For example, a family of four on T-Mobile's Experience More plan would spend $215/month just for their phone plan. That's $2,580 annually.
By switching to an annual Mint Mobile Unlimited plan, that family would pay just $120/month for the exact same coverage. That's a total cost of $1,440/year, netting a total savings of $1,140. That's not a bad investment for your tax refund.
Here's the details for each carrier's most popular annual plan:
Popular MVNO annual phone plans
| US Mobile Unlimited Starter |
Visible Base Plan |
Mint Mobile Unlimited |
|
|---|---|---|---|
| Annual cost | $270 | $275 | $360 |
| Monthly rate | $22.50/mo | $22.92/mo | $30/mo |
| Network | AT&T (Dark Star) | Verizon | T-Mobile |
| High-speed data | Unlimited | Unlimited 5G | 50GB premium |
| Hotspot | Unlimited | Unlimited (5Mbps) | 20GB |
| View plan | View plan | View plan |
All of these plans offer more than enough mobile data to meet an average customer's needs. You can stream, scroll social media, and play mobile games without any fears of lagging data speeds.
Here are a few things to keep in mind before you pick an annual plan:
- Annual plans don't include refunds: While annual plans are cheaper, remember that if you want to switch mid-year, most carriers won't refund the remaining months.
- Choose the right network: For the best experience, make sure you select a carrier with strong coverage in your area. Check out our coverage guide if you need help.
- Shop around for deals: Carriers frequently add extra deals onto their annual plans to entice customers to switch. Each carrier has multiple MVNOs operating on its network, so make sure to check each one for the best rates.
2. Pay off your device and switch carriers
If you're on a postpaid plan with AT&T, Verizon, or T-Mobile, part of your monthly bill is likely a device installment for your smartphone. You may also be getting a credit, making the device "free" for two to three years.
In reality, your device isn't actually free. Major carriers use device installments and free credits as a way to lock you into their most expensive postpaid plans. While you may save on the device, the carrier is bleeding you dry through a pricey plan that probably includes more data and features than you need.
Using your tax refund to pay off your device's installment plan releases you from that expensive plan. Once your phone is paid off, you can request an unlock and switch to a cheaper carrier. Carriers like Visible and US Mobile offer truly unlimited plans for as low as $25/month, allowing you to potentially save big.
Check out some of our favorite MVNO plans below:
|
Visible
$25 Visible Plan
$25.00/mo
Taxes & Fees included
|
|
Mint Mobile
Unlimited Data Plan
$25.00/mo
$75.00 upfront payment for 3 months (equals to $25.00/month). Intro pricing for new customers only.
|
|
US Mobile
Unlimited Starter Plan
$25.00/mo
$20/mo. for 6 months; $25/mo. thereafter
|
|
Tello
Unlimited Text, Talk, and Data Plan
$25.00/mo
|
|
Red Pocket
Premium Monthly Plan (GSMA)
$30.00/mo
|
3. Skip the carrier upgrade and buy an unlocked phone
If your current phone is aging out, you may be planning for an upgrade soon. Instead of going to your carrier and upgrading on your current plan, use your tax refund to buy a new phone outright from the manufacturer or a third-party retailer.
Manufacturers like Apple, Google, and Samsung offer installment plans on their devices. You may also find deals from stores like Best Buy, Amazon, and Walmart. Buying your next phone this way means it's unlocked from day one, so you can use it with any carrier you want. No need to worry about device installments or long-term contracts.
Buying your next device outright means you avoid:
- Multi-year installment contracts
- Carrier locks
- Bill credits that disappear if you switch
- Long periods between upgrades
Flagship devices aren't cheap. The newest iPhone, Pixel, and Samsung Galaxy models can run from $800 to $1,000 or more. Luckily, your tax refund can put a major dent in this purchase, allowing you to shop around for your phone plan and save overall.
Recap: Which tax refund strategy is right for you?
Any one of these moves puts your tax refund to work beyond a single purchase. The best choice depends on where you're starting from.
If you're happy with your current device and are with a postpaid carrier, the best option is probably to purchase an annual plan or pay off your device so you can switch carriers. If you're in the market for a new phone, buying an unlocked device is the better choice overall since it requires such a large payment.
No matter which method you choose, using your tax refund to save on your mobile bill can pay dividends throughout the year.
Max McCaskill
Sr. Staff Writer
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