Options with a Tax Return

Hopefully by now, you've already mailed off your tax return or filed for an extension. But as you get your return, do you know what you're going to do with it?

Here are some ideas for now and even in the future:

It may be tempting to spend all of your tax refund on a big purchase, or to use it to knock down some credit card debt. But before you spend a dime, credit counselors say it's important to have a plan.

"Say you get $2,000, what am I going to do with it? You ought to have a game plan in place to say all right, 'What am I going to do with this money," said Emily Dominey, Consumer Credit Counseling Service.

Putting some of the money in savings is also a good idea. That way if any unexpected expenses come up, you'll have money available, and you won't have to use your credit cards again. You can even make more money with your tax refund by investing. Whether you have a $200 or $2,000 tax return, investors say over time, even a small investment can grow.

"A lot of people say it's $100, It's $300, It's not going to do a lot of good. But if you've got some time to let that grow and let the interest on the earning compound, it can really add up," explained investment banker Trey Wilkerson.

A tax refund is also a chance to give back to the community. A donation to charity not only benefits them, but you as well with taxes in the future.

"There was a saying to pay it forward, you may want to do that. Give some of it to a charity. It is a tax write off if you give it to charity," added Dominey.

If you are getting a lot of money back, double check your W-4 form. You may be having too much money held out of your paychecks. That money could be put to better use in an interest-bearing savings account throughout the year.