It's tax refund time again! What are you doing with your check?

Tax refund check on top of 1040 form

For many people, tax refunds are a nice spring windfall.

The Internal Revenue Service says refund checks are averaging $2,946 so far this year, down a little from $3,022 in 2011.

So I asked readers to share the smartest things they've ever done with that extra cash and what they plan to do with this year's check.

Here are the smartest, and most popular, ideas I heard from them.

Pay off credit card debt. By far the most popular option in my informal poll -- and a smart one. Why keep paying 15% interest on top of a hole of debt? If you owe anything on credit cards, toss your refund their way and get out of debt for good.

Pay off other debts. One loyal reader is using her tax refund to pay her family's health insurance deductible (she has a baby in neonatal intensive care). Another regularly applies his refund to his mortgage. And we have two readers who are throwing the money at their student loan debts. All admirable decisions in my book.

Retirement. Several readers are committed to putting whatever they get back from the government in their Individual Retirement Accounts. That not only turns a tax refund into long-term savings, it turns it into tax-free savings.

Splurge. One reader said he's getting a new motorcycle. Another is adopting a rabbit. If you're in good financial shape, why not? It's essentially money saved during the year, so spending it on something that'll give you joy makes sense -- as long as you don't have high interest debt to pay off first.

Travel. One reader previously paired her tax refund with her savings to quit her job and travel the world for a year. Another couple considers their refund travel money for the year. Past trips have included Yosemite and Napa. This year, they're headed to Yellowstone.

Home improvements. Lots of projects around the home go from "to do" to "done" with a tax refund. One reader used his cash to repair a breezeway. Another installed central air -- a lifesaver, she said, since the home was in south Florida.

Some of our readers pointed out -- quite rightly -- that if you get a refund, it means you're loaning money to the government interest-free.

You can avoid this by adjusting your withholdings so that you send less to Washington each time you get paid.

Then again, if you see a tax refund as forced savings, then keep things as is.

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