You got it! The money is in your account. It is even more than you thought. So, should you pay off some debt? Maybe you should invest it and let it grow. But, the flat screens are all on sale and the promotional financing ends this weekend. What should you do with it? Here is what you should do and why?

The best financial decision for most people is to pay down credit card debt. There are several reasons why paying down credit card debt is the best option for a tax refund.

First, a tax refund is not “free money” even thought it feels like it. It is your hard-earned money. You just paid too much of it to the government during the year. If you receive a refund, use it as an opportunity to make up for any over spending or investment and savings shortfalls you planned to make during the year.

Second, there is no risk-free investment in the world that does not have any transaction costs or minimum investment yet a guaranteed rate of return of 10% – 25%. So, there is no way you can invest or save this money and get a better rate of return than the savings of paying down credit card debt.

With the stress of April 15th now in the past, numerous Americans are fortunate enough to be receiving a tax refund check from Uncle Sam. Facing this additional spurt of income, these individuals find themselves having to choose how they would like to spend those extra funds. We have a few suggestions that might be able to help.

1. Pay off any outstanding debts you might owe.

A majority of tax refunds go to paying off car loans, student loans, extra mortgage payments, and credit card balances. In our opinion, the most advantageous debt to pay off would be those pesky credit cards. Normally, these cards carry high interest rates ranging from 19-29%, which mean hefty interest payments. Mortgages and other loans on the other hand often have more reasonable APR’s. We recommend that you prioritize your debts and try to eliminate those which charge higher interest percentages. A number of individuals who find themselves under heavy credit card burden are opting to seek help from companies that specialize in debt settlement. These companies can significantly reduce credit card balances, often between 40-60%, which can correspond to thousands of dollars in additional savings.

2. Home Repairs and Other Improvements

Your water heater not functioning so well? The roof leaking a little? Car making a funny noise? A tax refund is a great way to pay for those necessary repairs that you just haven’t been able to fit into the budget. We recommend taking those extra funds to make any repairs that might later on become more costly if left unhandled.

3. Investments

This is a great opportunity to invest in your 401k, stocks, mutual funds, or any other nest egg you might have out there. The average American does not have enough savings to last him more than 1 month. This means that any sudden illness or emergency could bankrupt him. We recommend stashing away a few of those extra dollars for a rainy day.

4. Treat yourself to something you have always wanted

No bills to pay? Loans paid off? No repairs needed? Strong 401k? You are among the lucky few. So you know what, take advantage of your good fortune and treat yourself to something nice. A new TV, pool table, a shopping spree, island vacation. Spoil yourself just a little, because, after all, you only live once.

Do you know your rights as a taxpayer? In case you didn’t know it yet, your obligation to pay taxes is matched the IRS’ obligation to uphold your rights as a taxpayer. But what are these rights?

1. The right to know your rights.

IRS employees are required by to explain your rights as a taxpayer throughout the entire time that you are in contact with them. And they are required to uphold these rights too.

2. Privacy and confidentiality

The IRS cannot disclose your information to anyone, except those that are authorized by law. You also have the right to ask IRS personnel why they are asking for your information, how they will use it and what will happen if you do not provide the information they requested.

3. Professional and courteous service

If you feel that an IRS employee did not treat you in a fairly professional and courteous manner, you can take up that employee’s behavior with his or her supervisor. If you are not satisfied with the supervisor’s response you can write to the IRS director of your area or the center from which you filed your return.

4. Representation

You can represent yourself or have a tax professional (attorney, certified public accountant, or enrolled tax agent) represent you. If you are being interviewed by the IRS, you can have someone accompany you. You can also record any meetings with IRS examination, appeal, or collection personnel, but you have to write to the IRS about it 10 days before the meeting.

5. The right not to overpay taxes

You are required only to pay taxes that are due to the IRS, nothing more, nothing less. If you cannot pay the entire amount, you can pay in monthly installment payments.

6. The right to get help with tax problems

You can seek the help of the Taxpayer Advocate Service if you have tried to (unsuccessfully) resolve a problem with the IRS. Check the local Taxpayer Advocates in you area.

7. The right to appeals and judicial review

You have the right to appeal your tax liability or specific collection action if you disagreed with the IRS about the amount you owe. You can ask the IRS Appeals Office or a court to review your case.

8. Relief from penalties and interest

You have the right to have penalties waived if you prove that you acted reasonably and good faith, or relied on the incorrect counsel of an IRS employee. The IRS is required to waive the interest that results in errors or delays caused by an IRS employee.