According to the Internal Revenue Service, last year more than 75 percent of American taxpayers received a federal tax refund, with the average around $2,500.

Instead of spending your refund this year, consider contributing to an Individual Retirement Account, setting up a college savings fund for a child, or paying down credit card debt.

First priority might be paying down any high-interest credit card debts you have incurred.

By paying only the minimum each month, you may be paying just the interest (or less) on the debt and little or nothing towards the principal.

If debt is not a problem, your tax refund could provide you an excellent opportunity to contribute to an existing IRA or establish a new one.

For the 2009 tax year, you can contribute up to $5,000 to an IRA. If you are 50 years or older, you can add an additional $1,000 to the account.

Making a tax-deductible contribution to a traditional IRA is an option if you are not participating in an employer-sponsored retirement plan or, if you are participating, your Adjusted Gross Income falls within eligibility guidelines.

A Roth IRA may be a better choice, if you are eligible to contribute. Contributions to a Roth IRA are not tax deductible. However, qualified distributions are received free from federal income tax.

Your refund could also be used to contribute to your child’s college savings. There are simple and affordable options, including tax-advantaged savings vehicles, to help you reach your college savings goal.

One thing to remember: the check you received is actually the return of an interest-free loan you provided the government. It might be smart to adjust the amount withheld by the government to reduce the amount of future refunds. That could mean more money in each paycheck to contribute to a savings account or IRA or pay down debt throughout the year.

If you have questions about these options and others, you should contact a trustworthy financial services professional.