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Image shows a memo with the note "Tax Time" on top of multiple copies of Form 1040, and a calculator next to it. SmartAsset analyzed IRS data to conduct its latest study on the states with the largest tax bills.

Tax time is taxing, especially if you owe money to the IRS. Complex questions can lead taxpayers to seek out a tax preparer or a professional financial advisor to minimize their tax liabilities. But with this year’s delayed filing season officially under way on Feb. 12, those who underpaid on their taxes throughout last year stand to get slapped with a hefty tax bill. Some places, though, are much worse off than others when it comes to the tax sticker shock they can anticipate. That’s why SmartAsset decided to examine which states have the largest tax bills.

To do this, we analyzed IRS data for all 50 states and the District of Columbia across two metrics from 2018 (the latest year available): the number of tax returns with underpayments and the total amount underpaid in taxes. For details on our data sources and how we put all the information together to create our final rankings, you can read more in the Data and Methodology section below.

This is SmartAsset’s third study on the states with the largest tax bills. Check out the 2020 version here.

Key Findings

  • Coastal states dominate the top 10. Seven out of the 10 largest tax bills are located on a coast: Massachusetts, the District of Columbia, Connecticut, New Jersey and Florida (on the East Coast) and Washington and California (on the West Coast). Our study shows that these six states and the District of Columbia filed almost 10 million tax returns with underpayments in 2018. Across those taxpayers, the average amount owed is $6,655.
  • Underpayers are $5,300 in the red. The average amount of taxes owed from all returns with underpayments in the country is $5,262. That’s almost $2,000 less than North Dakota, the state that owes the most in our study, and roughly $1,300 more than West Virginia, the state that owes the least.

1. North Dakota

North Dakota is the U.S. state with the largest tax bill. For 2018 tax returns with underpayments, North Dakota taxpayers owed $7,247 on average. Approximately 75,500 tax returns with underpayments were filed in 2018, and the total amount underpaid was more than $547 million.

2. Massachusetts

In 2018, Massachusetts had $5.43 billion in underpaid taxes, the eighth-highest amount for this metric in the study and the fourth-highest in the top 10. The state had just over 782,600 tax returns filed with underpayments in 2018. Of those tax returns, the average taxpayer owed more than $6,942.

3. District of Columbia

IRS data shows that the Washington, D.C. had 86,370 tax returns filed with underpayments in 2018. That totaled almost $596 million in underpaid taxes, with the average taxpayer owing $6,897.

4. Connecticut

For 2018 tax returns with underpayments, Connecticut taxpayers owed an average of $6,821. The state had about 397,900 tax returns filed with underpayments that year, adding up to more than $2.7 billion in underpaid taxes.

5. Wyoming

IRS data from 2018 shows that Wyoming taxpayers owed more than $357 million when filing their taxes. Almost 52,800 tax returns in Wyoming were filed with underpayments in 2018, with the average taxpayer on those returns owing $6,771.

6. Nevada

Nevada taxpayers who filed returns with underpayments owed an average of $6,579 in 2018. Almost 284,500 tax returns were filed with underpayments in 2018, adding up to more than $1.8 billion in underpaid taxes.

7. Washington

For 2018 tax returns with underpayments, the average taxpayer in Washington State owed $6,550. IRS data showed that 815,600 tax returns were filed with underpayments in 2018, adding up to more than $5.3 billion in underpaid taxes.

8. California

California taxpayers in 2018 not only owed the highest amount of underpaid taxes in our study (about $30.9 billion), but they also filed more tax returns with underpayments that year than any other state (almost 4.75 million). IRS data from 2018 shows that the average amount of taxes owed on those returns was $6,500 – eighth-highest in our study.

9. New Jersey

New Jersey taxpayers in 2018 had the ninth-highest tax bill in the country, owing an average of $6,456 in taxes on returns with underpayments. IRS data shows that 1,025,640 tax returns with underpayments were filed in 2018, adding up to more than $6.6 billion in underpaid taxes.

10. Florida

In 2018, Florida had total of $13.1 billion in underpaid taxes. IRS data shows that 2,045,590 tax returns are filed with underpayments in 2018, with the average taxpayer on those returns owing $6,421.

Data and Methodology

To find the states with the largest tax bills, we examined data for all 50 states and the District of Columbia, focusing on two metrics:

  • Number of tax underpayments. This is the number of tax returns in which taxpayers have not paid sufficient taxes on income earned and thus owe money to the IRS.
  • Amount of underpaid tax. This is the total amount owed to the IRS on returns (as a result of income for which taxpayers failed to pay sufficient taxes).

For each state, we divided the amount of total underpaid tax (the money taxpayers owed) by the number of tax underpayments in that state. The result represents the average underpayment amount for taxpayers who underpaid on taxes throughout the year. We used this dollar figure of the average in taxes owed by state to rank the entire list from highest to lowest. All data comes from the IRS and is for 2018.

Financial Tips for Taxpayers

  • Seek professional guidance to help manage your tax burden. If you’d like further guidance on how to navigate your most complex tax questions, consider working with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in just five minutes. If you’re ready to be matched with local advisors, get started now.
  • Breaking even is actually ideal. If possible, it’s ideal not to owe the government or expect a refund. Refunds aren’t necessarily a positive, as they mean that you’ve essentially loaned money to the government throughout the previous year. SmartAsset can help you prepare by showing you what your return might look like with our tax return calculator.
  • Get your paperwork together as soon as possible. One of the most stressful parts of filing taxes can be realizing that you’re missing an important document at the last minute. It’s important to begin gathering and keeping tax information in one place as early in the filing season as possible. Here’s a useful tax prep checklist to help you keep track.

Questions about our study? Contact press@smartasset.com.

Photo credit: ©iStock.com/alfexe

Nadia Ahmad, CEPF® Nadia Ahmad is a Certified Educator in Personal Finance (CEPF®) and a member of the Society for Advancing Business Editing and Writing (SABEW). Her interest in taxes and grammar makes writing about personal finance a perfect fit! Nadia has spent ten years working as a seasonal income tax assistant, researching federal, state and local tax code and assisting in preparing tax returns. Nadia has a degree in English and American Literature from New York University and has served as an instructor/facilitator for a variety of writing workshops in the NYC area.
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