You'll thank yourself in retirement. Trust us. By Kimberly Lankford, Contributing Editor April 18, 2017 The typical tax refund is about $3,000. Instead of blowing yours on Longchamp luggage or a trip to Vegas, you’ll ultimately be better off putting the money in a Roth IRA.See Also: 17 Reasons the IRS Will Audit Your Tax Return The beauty of this retirement account is simple: You can make withdrawals tax-free when you retire. With traditional IRAs and 401(k), you get taxed on withdrawals. The basics: You can contribute up to $5,500 to a Roth IRA for 2017, or $6,500 if 50 or older. You can contribute the full amount as long as your income falls below $118,000 if you’re single, and $186,000 if married filing jointly. You can make a partial contribution if you earn up to $133,000 (single) or $196,000 (married). If you work and your spouse doesn’t, you can contribute to a Roth IRA in their name subject to joint income limits. If you earn too much for a Roth, you can contribute to a traditional IRA, then convert it to a Roth later. Learn about more smart ways to spend your tax refund. Take the Quiz: How Much Do You Really Know About Roth IRAs?