You know what they say about 'death and taxes', but maybe taxes aren't as big of a deal as we make them out to be? After all, more than one-third of everyone who filed last year didn't have to give a dime to Uncle Sam.
U.S. taxpayers filed 132 million tax returns in 2009, according to Taxfoundation.org. That’s a lot of broken pencils, aspirins, bleary eyes and late-night dashes to the post office.
But how much do you really know about tax returns? Surprisingly, there’s actually a lot to know about them.
For instance, the Internet has changed the way consumers read, shop, communicate and do their banking. It should be no surprise, then, that it’s also revolutionized the way U.S. residents file their taxes. In 2009, more than 30 million people filed their taxes online through their own home computers. In the same year, the IRS’ e-file electronic filing system broke the 90-million mark.
This is impressive. Again, though, it shouldn’t be overly surprising. There’s a reason why so many people are filing their tax returns electronically. It’s easy, fast and accurate. Electronic filing has an error rate of less than 1 percent. Tax returns filed the traditional paper route, though, have a far higher error rate of 20 percent. Taxpayers also receive their refunds faster if they go the electronic route; they can receive this in as little as 10 days if they use the combination of e-file and direct deposit.
Here’s another interesting tax-return fact: A total of 36 percent of tax returns in 2009 were classified as complete nonpayment returns. The taxpayers filing these returns got back every dollar that was withheld from their paychecks during the year.
Financial analysts expect this number to rise slightly to 37 percent in 2010. That’d be a big increase from just 10 years ago; in 2000 only about 26 percent of tax returns were classified with complete nonpayment status. In 1990, that number stood at about 21 percent. In 1980, it stood at a little more than 20 percent.
The residents of certain states tend to get higher refunds than do others. Connecticut residents earn the highest tax refunds, getting back an average of $7,524. Delaware residents come in second in this race, getting back an average of $5,864.
Montana residents receive the lowest average tax return, $2,149. The national average stands at $3,448.
New York state features the most progressive distribution of income tax. Taxpayers earning more than $200,000 pay 63 percent of the state taxes. West Virginia is on the other end of the spectrum. Its residents earning more than $200,000 pay only 33 percent of state taxes. Nationally, taxpayers earning more than $200,000 pay 51 percent of state taxes on the average.
Here’s one not-so-surprising tax return fact: Most people think they are paying too much in taxes each year. According to a survey, 58 percent of taxpayers say they are paying too much in taxes, while 3 percent say they are paying just enough. A total of 2 percent of taxpayers are masochists; they say they are paying too little.
A total of 43 percent of U.S. taxpayers say that they are willing to pay from zero to $1,000 every year to pay for the government services that they receive. An additional 46 percent say they are willing to pay from $1,001 to $10,000, while 9 percent are willing to shell out from $10,001 to $50,000. Only 2 percent are willing to pay more than $50,000 in taxes for government services.