Taxpayers in these cities tend to get larger refunds
FOX Business hit the streets to ask Americans how they really plan to spend their tax refund check from Uncle Sam. The answers may surprise you!
While many taxpayers across the U.S. are fretting lower tax refunds this year, the city you live in might help predict whether you will receive a large refund – or a large bill – from the Internal Revenue Service (IRS).
Overall, the average refund so far this filing season is about $2,640 – a 16.7 percent decline when compared with last year’s average $3,169, according to IRS data.
While lower refund amounts are not necessarily a bad thing – it means an individual did not overpay the IRS throughout the year –many people rely on that money to pay off bills or debts.
If you have yet to file – or are awaiting a refund from the tax agency – your place of residence could actually help predict what you might be able to expect.
Taxpayers in certain geographical locations tend to receive larger refund checks, while others are stuck with higher federal tax bills, according to MagnifyMoney, which examined data from 2012 through 2016 across the 100 largest U.S. cities to extract filing patterns.
Taxpayers who got a refund throughout this time period received an average of about $3,052, according to MagnifyMoney’s findings. Overall, about 78 percent of people received money back from the IRS.
The biggest refunds were doled out in Fort Myers, Florida. Seventy percent of residents in this city receive average refunds totaling $3,799.
Another Florida city – Miami – was second on the list of largest refunds, where more than three-quarters of people received an average refund of $3,706.
McAllen, Texas, ranked third. The average payment for these Americans has averaged $3,666 among the 88 percent of people who receive an annual refund.
New York City and Houston, Texas, took the fourth and fifth spots, with respective federal refund amounts averaging $3,664 and $3,601.
On the flip side, taxpayers in other locations were more likely to underpay throughout the year, owing the IRS come filing season. On average, these individuals were stuck with a bill of about $5,294. People who owed the agency accounted for about 17 percent of taxpayers across the largest U.S. cities.
Eight of the top 10 cities where Americans owed the most in April were located on the West Coast. Three California cities took the top five spots – including San Francisco, where one in four taxpayers were stuck with a bill. The average amount owed to the IRS was a staggering $7,226.
Denver was second on the list of top payers, where 22 percent of residents underpaid in taxes throughout the year. The average IRS tab for these residents was $5,607.
In Sacramento, 22 percent of taxpayers underpaid as well, though their bills, on average, were slightly lower than Denver at $4,243.
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San Diego and Boise, Idaho, rounded out the top five, where residents owed $5,260 and $4,694, respectively.
It should be noted that MagnifyMoney’s analysis did not take state refunds into account.