If you recently received or are expecting a tax refund, you’ve probably already thought of a dozen different ways to make the proceeds swiftly disappear. But before you do, consider this: a tax refund is not found money. It’s your hard-earned income that you lent to the Internal Revenue Service, interest-free. Here is some advice from the Florida Institute of CPAs about how to use your refund to improve your finances.

PAY DOWN DEBT

With interest rates on credit cards averaging between 13 and 14 percent, paying down your debt is one of the smartest things you can do with your refund check. Generally, it makes the most sense to pay off high-interest debt first. However, if you have one or two smaller debts, you may get more satisfaction out of paying them off in full.

FUND YOUR RETIREMENT

Consider investing all or at least some of your tax refund in a tax-favored retirement account. With a traditional IRA, your earnings grow tax-deferred and if you meet certain eligibility requirements, your contribution may be tax deductible. Contributions to a Roth IRA are not deductible, but withdrawals are tax-free if certain conditions are met.

You can’t put your tax refund check directly into your 401(k) plan at work, but here’s a good strategy for taxpayers who aren’t contributing the maximum. Deposit your refund in the bank and increase your contributions by a percentage that roughly equals the refund amount. Then, use the money in your bank account to make up for the smaller amount in your paycheck.

ESTABLISH OR REPLENISH AN EMERGENCY FUND

As a general rule, CPAs say you should have six months’ worth of living expenses set aside in case of a job loss or unexpected emergency. If you don’t, use some of your tax refund for this purpose. Keep these funds in a liquid investment, such as a money market fund, and withdraw only for true emergencies.

SAVE FOR COLLEGE

Another option for your tax refund is saving for your child’s education. Section 529 college savings plans allow parents to save for their child’s education in state-sponsored plans. Some states even provide tax breaks for deposits into these plans.

DO SOME PREVENTIVE MAINTENANCE OR IMPROVEMENTS

Are there some minor repairs you could make today that would spare you a larger expense down the line – for example, a new roof for your house or tires for your car? Consider using your tax refund for these purposes or for making home improvements with a high payback value, such as adding landscaping or upgrading a bathroom.

DONATE TO CHARITY

Use your refund check to give in to your charitable urges. When you donate to a charity, you not only help someone in need, but the amount of your contribution can be deducted on your tax return for 2005. Just be sure to get a receipt from the charitable organization.

TAKE A VACATION

If you’ve been working hard all year and saving regularly, a well-needed vacation may be in order. Spending quality time with your family is a good investment, as long as you are not under any other financial strains.

DON’T LET IT HAPPEN AGAIN

Remember -- receiving a large tax refund means you lent Uncle Sam your own money interest-free. File a new W-4 form to lower your withholding and you’ll receive more money in each paycheck. Invest the extra dollars in your company retirement plan, an IRA, or a mutual fund.

CONSULT WITH A CPA

Make an appointment for some financial planning advice. It’s a great way to make your refund pay off.