Most owners of small businesses have pass-through entities (e.g., sole proprietorships, S corporations, partnerships, LLCs) and report their share of income on their personal tax returns. At this time of the year they may receive a tax refund related to their personal returns.

Here are 5 things to do about these tax refunds.

1. Do a better job with estimated taxes

Don’t congratulate yourself for getting a refund. It means you’ve made an interest-free loan to the government. It’s a better idea to more closely estimate your tax bill for the year so you don’t advance too much to the government.

With new tax rules taking effect in 2018, estimating your tax bill can be challenging. It may be best to fix your estimated tax payments at 100% of what you paid for 2017 (or 110% if your adjusted gross income in 2017 exceeded $150,000, or $75,000 if married filing separately). As long as you meet this prior-year safe harbor for estimated taxes, you won’t owe any underpayment penalty when you file your return for the year; the government will have to wait for your money.

2. Increase employee wages and benefits

So you’ve received a big refund. Determine whether you can effectively put it back in the business to help you attract and retain valued employees. Consider sharing in your good fortune with your employees by raising their wages or adding new benefits.

Keep your eye on required minimum wage rate increases that may be coming later this year. For example, the basic rate in the District of Columbia rises to $13.25 on July 1, 2018. A number of other states and cities also have rate increases or other changes in minimum wage rules on this date. SwipeClock has a state-by-state guide on minimum wage changes.

3. Hire a new employee

Again, if your refund is sizable enough, you may be in a position to support the cost of a new employee. This new worker may help you grow your business.

In determining what you can afford to pay, factor in not only wages, but also benefits, employment taxes, and insurance (e.g., workers’ compensation). As a rule of thumb, multiply the basic wages or salary by 1.25 to account for these added costs (e.g., $62,500 for an employee with a salary of $50,000). If you need additional space and additional equipment, you’ll need to add more.

4. Invest in AI

The future for artificial intelligence is now. Are you taking advantage of opportunities to make an initial investment in AI that will cut your costs over the long run?

For example, SalesForce enables you to use AI for customer relations management (CRM) (e.g., sorting through leads, following up on leads, understanding why customers leave items in their shopping carts).

 5. Bulk up your retirement savings

There’s no such thing as too much savings for your personal retirement. You can use your tax refund to fund contributions to your qualified retirement plan or IRA.

You may also want to consider offering a retirement plan, such as a 401(k) plan, to your staff if you don’t already do so. You’ll be able to claim a tax credit or the costs of setting up the plan and educating employees about their participation.

Conclusion

With your 2017 income tax return behind you and estimated taxes for 2018 beginning, take the time to think about what to pay going forward, and what to do with a tax refund for overpaying what you owed last year. Sit down with your CPA or other tax advisor to make sure you’re moving in the right direction.