The ink on the form is dry, the stamp has been licked and the mailman has come and gone.
Tax Season 2011 is over, and now comes the easy part: waiting for your refund. But the question now is what's the best way to spend or invest your refund?
For many, getting that refund from Uncle Sam is like free money, and they eagerly await getting it in order to just "blow it." For others, the funds will be used to buy a new car or fund a summer vacation.
But for those who are smart about how they use their money, this year's refund will be used to pay down or pay off debt, to invest in something that will yield a good return, placed in a retirement fund, or deposited into a savings account.
Here are the best ways to put your tax refund to work for you:
• Pay down or eliminate your debt. If you have a high-interest credit card, it would be prudent to pay that card off with your refund.
• If you have an emergency fund, which should ideally cover at least three months' worth of expenses, consider depositing your refund there. This way, if you have a medical emergency, get laid off from work, or have to make unexpected repairs to your vehicle, you'll have the money on hand.
• Another good use of the refund would be to invest it into your retirement account. Since it's after April 15, you can now deposit to a 401(k) for the current tax year.
• If you can't think of any other way to invest your money, why not just put it into a savings account? You'll earn interest and it can be used later for something you really need.
Finally, consider donating a portion of your refund. With the economy in turmoil, many nonprofit organizations and charities are hurting for money. Your donation could really make a difference.
By giving careful thought to what you do with your tax refund, you'll find you can make a difference in not only your bottom line, but in the lives of others – and your own as well.