If you are expecting a tax refund, you planned well and will not owe any penalties or have any surprises. If it is a large refund, you may have too much withheld. This is not a bonus. This is an interest free loan to the government.
Here are some ways to spend that refund check.
1-Emergency Fund-Start or add to your fund in an interest -bearing account . This should be easily accessible for future emergencies.
2-Pay off High Interest Debt-Contribute to your emergency fund first and then pay off debt.
3-IRA-Start or add to your IRA (traditional or Roth) for the year. This can grow over the years to a sizeable amount. Or if you have a traditional IRA, consider converting some or all to a Roth paying the taxes for the conversion with this year’s refund. This will save you taxes in the future on the initial investment and the earnings.
4-Spend on Necessity-Car repair, dental work, house repair. Spend on something you have put off for lack of funds but really need!
5- Save for the Future-Start a savings account for specific goal. This saves from possibly creating debt in the future (I do not like car payments-save in advance!).
6-Splurge-Spend it on something you want! Vacation, home improvement, start a new business, summer camp for the kids. You did earn this money!
7-Charity-This gives you a chance to give back or pay it forward.