Once again, we’re in the midst of tax season. For many filers, there are expected delays, since the IRS isn’t ready to process some of the forms.

But as the debate continues to rage on between those that say a tax refund works as forced savings and those that insist you should try to avoid giving the government an interest-free loan, I find myself in the position of actually having a tax refund to think about.

What Will You Do With Your Tax Refund?

For the first time in years, my husband and I don’t owe anything for federal taxes (we do owe state taxes, though, since I don’t pay those quarterly). The combination of me reducing my client load, along with some unexpected deductions, helped reduce our income — and our taxes. But what I really think did it was the fact that my husband didn’t claim any exemptions on the W-4 Forms he filled out when he began teaching as an adjunct.

So, what are we going to do with these new found riches? Well, for all us self-employed folks, the government offers the option to apply your tax refund to your quarterly taxes. Our refund is almost exactly the same amount that we will need for our first quarterly tax payment. So, come April, that’s one less thing I’ll have to worry about.

But, for fun, I thought about what else I could do with the tax refund money:

• Boost retirement account contributions
• Invest in my income portfolio (dividend stocks or P2P lending)
• Pay off the Prius loan

And, really, it is kind of like we’ll have “extra” money, since I had already planned to make that quarterly tax payment, on top of the expectation that we would owe at least a little bit. I’ve been pleasantly surprised (and that doesn’t happen a lot when taxes are involved). But we’re going through a refinance right now, so maybe I’ll just hold on to the money when it comes, and see where we’re at before committing to something.

Why Not Spend it on Something Fun?

It’s fairly common for consumers to spend their tax refunds on something fun. A tax refund is seen as windfall money — usually destined for something fun, like a vacation or new gadgets for everyone in the family.

In a lot of ways, I can see that as being attractive. I remember a conversation I had with Sandy from Yes, I Am Cheap at FinCon11, late at night. She mentioned that many of those who receive tax refunds spend all year using their money for the necessities of life. If “extra” money comes to them, the mindset is that this a chance to do something fun — something that you might not ever get the chance to do again. When are you going to get to go to Disneyland as a family? This is your chance.

I’m fortunate that I’m not in that position. Instead, I see a tax refund and my first thought is “just apply it to my first quarterly tax payment.”

What do you think? Are you getting a tax refund? If so, what will you do with it?