10 States With the Highest Average Income Tax Refund

how to get highest tax refund

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Americans tend to have mixed feelings about tax refunds. On one hand, with a national average refund of $2,800 in 2012, the financial windfall is a boon for budgets ravaged by the holiday shopping season; on the other, a refund is just Uncle Sam paying back the principal on an interest-free loan.

While the current refund system may be annoying and a little unjust, receiving the money in a lump sum does have its benefits. For example, it can be difficult to set aside small portions of income to save for retirement or to pay down debt. It can be much easier to part with a onetime payday, such as a refund, in order to make progress on these goals. A survey conducted by TurboTax suggests that people do just that. According to the survey, 29 percent of people who receive a refund in 2012 planned to put it into a retirement account, and 24 percent said they would use it to pay down debts.

Whatever you use your refund for and however you feel about extending an interest-free loan to Uncle Sam, it’s worth knowing what the landscape looks like. Here are the 10 states with the highest average income tax refund in the United States.

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10. California

Californians averaged an income tax refund of $2,909.18 in fiscal 2011, the most recent year from which the Internal Revenue Service provides data. With 16,572,467 total returns filed that year and 13,540,352 refunds issued, a refund rate of 81.7 percent, the federal government returned about $39.4 billion to the state.

9. Florida

8. Mississippi

Mississippians averaged an income tax refund of $2,930.94 in fiscal 2011. With 1,270,066 total returns filed and 1,090,765 refunds granted, the

state had a refund rate of nearly 86 percent. The federal government returned about $3.2 billion to the state.

7. Illinois

Illinoisans averaged an income tax refund of $2,957.87 in fiscal 2011. People living in the state filed 6,035,398 tax returns with the IRS and were granted 5,128,075 refunds, a refund rate of about 85 percent. The federal government returned nearly $15.2 billion to the state.

6. Louisiana

Louisianans averaged an income tax refund of $3,005.67 in fiscal 2011. People in the state filed 1,979,224 tax returns with the IRS and received 1,686,157 refunds, a refund rate of about 85.2 percent. The federal government returned about $5 billion to the state.

5. New York

New Yorkers earned an average income tax refund of $3,070.70 in fiscal 2011. People in the state filed 9,243,325 tax returns with the IRS and were given 7,753,092 refunds, a refund rate of about 83.9 percent.  The federal government returned about $23.8 billion to the state.

4. New Jersey

New Jerseyans averaged an income tax refund of $3,099.10. People in the state filed 4,268,414 tax returns with the IRS and received 3,526,260 refunds, a refund rate of 82.6 percent. The federal government returned $10.9 billion to the state.

3. Texas

Texans received an average income tax refund of $3,112.33 in fiscal 2011. People in the state filed a total of 10,902,321 tax returns with the IRS and received 9,414,795 refunds, a refund rate of about 86.4 percent. The government returned $29.3 billion to the state.

2. Nevada

Nevadans averaged an income tax refund of $3,192.43 in fiscal 2011. People in the state filed a total of 1,257,756 tax returns with the IRS and received 1,083,065 refunds, a refund rate of 86.1 percent. The government returned about $3.5 billion to the state.

Source: www.cheatsheet.com

Category: Taxes

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