Tax season. For many Americans, it means putting them off for as long as possible to avoid having to pay the government. But for the other half, it’s a time when they might get a little of the money they’ve paid back.

According to the IRS, the average federal tax refund is more than $3,000. While that’s not necessarily a ton of money, it’s not an amount that you’ll want to spend on fleeting luxuries. Instead, why not put it to good use doing one of the following?

Fund Your Roth IRA

If you haven’t contributed to one already for this year or last, then consider stashing it in a Roth IRA. As you probably already know, Roth IRAs have the unique advantage of growing tax-free. Every dollar that you invest has the potential to compound several times over without owing anything to the IRS in the future.

Buy Some Dividend Funds

What could be better than buying an asset that keeps on giving?

High-yield dividend ETFs (exchange-traded funds) are one of my favorite ways to generate passive income. For simply being a shareholder, I get to collect quarterly or even monthly distributions.

Some of my favorite funds are as follows:

• JPMorgan Equity Premium Income ETF (JEPI)
• Amplify CWP Enhanced Dividend Income ETF (DIVO)
• Global X Nasdaq 100 Covered Call ETF (QYLD)
• SPDR Bloomberg High Yield Bond ETF (JNK)
• JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)

To really see your portfolio grow, go into your brokerage account and select reinvest dividends. The more the funds pay you, the more shares you’ll accumulate. It will be like a snowball that builds greater the longer the process continues.

Park It for Later

Not entirely sure what you wanna do with your money yet? That’s no problem. 

It’s never a bad idea to have a little extra money waiting on the sidelines. You might need it for:

• An emergency
• A good investment opportunity
• Real estate

With interest rates as high as they are right now, you can just park your money in a high-interest savings account and let it compound.

Bonus Tip: If you felt like your tax refund was somewhat excessive, then you might be paying too much into the government throughout the year. Take a second look at your federal withholding by your employer. Or, if you make quarterly payments, double-check your calculations. That money could be better served working for you throughout the year. After all, who wants to give the government an interest-free loan for the year?

Are you serious about building REAL wealth and lowering your legal tax obligations? Get the “How to Lower Your Taxes” Course today!