This article was written by guest blogger Eva Rosenberg.

Last week, one of my clients forwarded me a letter he received from the IRS. It said that the agency was holding his refund and reviewing his account. As it turns out, the IRS found an extra $40,000 payment he had not included, and his refund was more than $100,000.

Can you imagine getting a refund like that? If you did, you could pay off your mortgage, buy a vacation property, or take a trip around the world.

For most people, though, tax refunds are smaller. Refunds average around $3,000, and while you probably can’t buy a house with that money, there is plenty you can do with your refund check.

Before you file your taxes, use Form 8888 to:

1. Have all or part of your refund deposited directly into your savings account.

2. Have the money deposited directly into your IRA. If you allocate the contribution to the previous year, you may still take a deduction for it as long as you file your tax return before April 15. (Be sure to contact your IRA provider and alert it to expect the contribution.)

3. Use the refund to buy U.S. savings bonds and to name your beneficiaries or co-owners. You can use your refund to buy bonds for yourself or your loved ones.

4. If your state allows you to do so, donate part of your state tax refund directly to a number of different charities.

Once you have the tax refund in your hands, use it to:

5. Make an IRA or Roth IRA contribution.

6. Pay down a credit card or pay off a debt—especially if it has a high interest rate.

7. Take care of much-needed repairs you’ve been putting off, such as replacing deteriorating tires on your car or upgrading some home appliances.

8. Get your children started with braces or other necessary dental or medical care.

9. Invest at least part of the money into a stock or mutual fund.

10. Sign up for an auto club membership. There are several options to choose from, including AAA, Good Sam RV Club, and the National Automobile Club.

11. Buy an annual pass, for two or for the family, to your favorite amusement park or to another place you regularly frequent, such as a theater, museum, or zoo.

12. Take a trip. Online, you can find excellent prices for travel packages that include airfare, hotel, and perhaps a rental car. Take your vacation during the off-season for additional discounts.

13. Do something special to brighten someone’s day. Remind an elderly parent, relative, or friend how much you love him or her by sharing a day of your time. Treat the person to a special experience, such as tea time at a nearby hotel or a spa day for two.

14. Find something you’ve always wanted to do but couldn’t squeeze into your schedule. Try something new and fun with someone you love—or by yourself if you’re feeling adventurous.

Eva Rosenberg, EA is the publisher of, where your tax questions are answered. Eva is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at