re: Thoughts on what to do with unexpected tax return?

Not trying to be a douche, just a little early morning education:

The forms you file to the IRS are your RETURN. The money you get back is a REFUND.

Now to your question, if you want this money in the next 2-5 years, 1% in a savings or money market is probably your best bet.

If this money is only a small part of your savings towards your house then you would probably be okay if you wanted to invest. You just need to understand that you may have less when you go to pull it out. I personally wouldn't risk it.