Gregory Geisler (University of Missouri-St. Louis, College of Business Administration) has published The Best Use of Spare Cash — Tax-Savvy Strategy for Extra Dollars, J. of Acc’t (Sept. 2006).   Here is the Introduction:

When individual clients receive an income tax refund, a bonus, an inheritance or another windfall—or even have some extra cash on hand after paying off their bills—they have a number of options. The most prudent choices are investing, putting money in college savings or retirement accounts, or paying off debts. To help clients rate these alternatives, CPAs should consider three criteria: the after-tax rate of return, the risk and the effect on asset diversification.

While risk tolerance and asset diversification decisions vary for each client, tax considerations generally apply across the board. With that in mind, this article offers a step-by-step approach to the options based on their after-tax rate of return, providing choices that offer tax advantages no matter how much money is involved. For simplicity, the article assumes that the individual client is an employee and not self-employed.