I look forward to doing my taxes. Let me rephrase that. I hate the suspense of knowing whether I'll owe Uncle Sam or he'll owe me. So I start my taxes as soon as I receive the bulk of my tax documents.

There always seem to be life changes that keep our tax bill unpredictable. In 2009, a maternity leave reduced our annual gross income, a new child added a tax credit and a mortgage refinance increased the amount of housing-related deductions.

The result? A $3,400 federal refund and a $11 refund from the state.

I know, I know. Refunds don't make sense. I've said it myself. But it was fun to get one after years of having to pay in. And given the pathetic return on short-term savings, we didn't miss out on much.

What I did miss was the Minnesota K-12 Education Subtraction.  My eldest is in kindergarten this year and I did not realize that I could subtract up to $1,625 per qualifying child in grades K–6, and $2,500 for a qualifying child in grades 7–12 for:

  • instructor fees and tuition for classes taken outside the normal school day or school year
  • purchases of required educational materials for use during the normal school day

Be sure to check out the Minnesota Department of Revenue's fact sheet for details because there are exceptions and restrictions. But I was surprised how inclusive it is.

I can't claim the subtraction for my daughter's school supplies in 2009 because I didn't save receipts for the crayons, folders and reams of paper I purchased for her classroom. Even online software mint.com isn't specific enough for me to feel comfortable that I'd be claiming an accurate amount.

So now the question is, how should I spend the money? Oops, did I say that? I meant, what should we do with the money? Because we could save it towards a new car or put it in a Roth IRA. Or I could use the money to pay the taxes if I choose to convert an IRA to a Roth this year.

Then there's the temptation to go on a vacation over spring break.

Decisions, decisions.

What do you plan to do with your refund?