LendingTree, the site specialized in financial services, published a study in which are the states in which taxpayers can expect receive the largest and smallest tax refunds, based on tax year 2020 data (latest data available).
The study found that taxpayers in Wyoming received an average of $4,877 in tax refunds, the highest average of any state for the third consecutive year. In contrast, Maine taxpayers received the least amount nationwide.
The LendingTree study revealed some key results:
– A slightly higher percentage of taxpayers, 76%, received a refund in tax year 2020 compared to 75% in the previous fiscal year.
– Average refund in fiscal 2020 also increased year-over-year, 3% more than in fiscal year 2019.
– Although tax refunds vary widely across the country, Wyoming taxpayers got the largest median refund of $4,877, while Maine taxpayers saw the smallest refunds at $2,920.
– Of the taxpayers who owe money, those in South Dakota had the largest tax bill, with an average amount owed of $8,724 dollars.
– Taxpayers in Arkansas with tax bills owed the smallest amount at $5,312.
– The Taxpayers earning between $10,000 and $24,999 a year receive, on average, between 11.2% and 28% of your income as a tax refund, the higher of the income brackets.
The 5 states with the largest average refunds:
Position: 1
State: Wyoming
% of Taxpayers Receiving a Refund: 78%
average refund: $4,877 dollars
Position: 2
State: D.C.
% of Taxpayers Receiving a Refund: 74%
average refund: $4,462 dollars
Position: 3
State: Florida
% of Taxpayers Receiving a Refund: 77%
average refund: $4,337 dollars
Position: 4
State: Texas
% of Taxpayers Receiving a Refund: 79%
average refund: $4,317
Position: 5
State: Connecticut
% of Taxpayers Receiving a Refund: 76%
average refund: $4,280 dollars
“With rampant inflation and rising interest rates wreaking havoc on American budgets, a tax refund is a real opportunity for families to build a little financial cushion for themselves. Whether the repayments are used to pay down debt, build savings or both, they can make a real difference,” said Matt Schulz, LendingTree’s chief credit analyst.
“Just remember that while it may feel good to get a refund, too big a refund can actually be a bad thing. It basically means that you’ve given Uncle Sam a big interest-free loan instead of having that money work for you and your family all year long. If your refund is too large, adjust your withholdings so you can keep more of your hard-earned money from each paycheck,” Schulz added.
For more details about the study, click here.
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