Contrary to what many experts predicted, the Internal Revenue Service is off to a solid start to what is considered to be another hectic, pandemic-hit tax season.

Early data released by the tax agency confirmed that it has issued more than 22 million tax refunds that are worth approximately $78 billion. That means the average refund comes in at $3,536, which is up by about 23 percent from the average refund of $2,880 at the same time last year.

The IRS, though, did note that “weekly numbers can shift dramatically during the initial weeks of filing season due to numerous factors, including the calendar and filing patterns that can change year to year.”

However millions of Americans have already received a sizable cash injection. More refunds could be heading out this week.

“The tax refund is often the biggest windfall households receive all year,” Greg McBride, chief financial analyst at Bankrate.com, told CNBC.

With this in mind, what should these tax refund recipients do next? Here are three options to mull over.

Build Up Emergency Savings

Only a bit over half (53 percent) of U.S. adults have more cash stashed in an emergency savings fund than they’ve racked up in credit card debt, according to a January 2022 Bankrate survey. In addition, 22 percent of U.S. households carry more credit card debt than the amount they have saved for unexpected expenses.

Given these facts, “households that have experienced income disruption during the pandemic are very likely to need to rebuild their emergency savings,” McBride said.

Most financial experts recommend having at least six month’s worth of emergency savings.

Pay Off Debt

A separate Bankrate poll revealed that among those expecting tax refunds, 32 percent plan to save most or all of the money, 23 percent pay down debt, and 12 percent pay for day-to-day expenses.

According to Bankrate’s industry expert Ted Rossman, eliminating or cutting down on credit card debt via the tax refunds could be a smart move.

“Using this money to pay off credit card debt is an excellent choice since the average credit card charges over 16 percent, and that’s likely to rise to around 17 percent by the end of 2022,” he said in a statement.

“The average American owes $5,525 on their credit cards, according to Experian, so the average tax refund represents more than half of the battle,” he added.

Plan for Children’s Future

For those with children, experts say it’s important to keep in mind that many college savings plans feature tax benefits that are markedly better than using a simple savings account.

“If your family is financially able to do so, leveraging a tax refund to jumpstart education or disability savings is a great opportunity to support long-term goals,” Mary Morris, CEO of Virginia529 and ABLEnow, told CNBC.

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.