Average tax refund in 2010: $3,003

By Blake Ellis, staff reporter


NEW YORK (CNNMoney) -- Taxpayers received an average refund of about $3,000 last year -- a 5% boost from the previous year.

The Internal Revenue Service doled out refunds totaling $328 billion -- a nearly 3% rise from 2009 -- to taxpayers who filed their 2009 tax returns last year, the agency reported.

That comes out to $3,003 apiece, up 5% from the average refund of $2,859 taxpayers received in 2009, according the latest filing statistics from the IRS.

The jump was one of the biggest in years, thanks in part to several tax credits introduced as part of the American Recovery and Reinvestment Act.

The Homebuyer Tax Credit -- which gave buyers up to $8,000 for purchasing a home -- was expanded to include more taxpayers.

Meanwhile, the refundable American Opportunity Credit helped more students and parents pay for college tuition and course materials. It temporarily replaced the $700 non-refundable Hope Credit and gave students with income of $80,000 or less a credit of up to $2,500 a year.

(The Making Work Pay credit was part of the ARRA as well, but it didn't show up in refunds. Instead, it was distributed in paychecks.)

Refunds also likely received a boost from the sluggish unemployment picture, said Roberton Williams, a senior fellow at the Tax Policy Center.

"Withholdings are based on the assumption that you are making the same amount of money the whole year," he said. "So one of the things that really affects refunds is that if people only work part of the year, they typically have more withheld than they even need to pay their taxes. That's a small benefit from being unemployed."

The increase in refund amounts last year came even as the number of refunds issued slipped 2.1% to 109,376,000.

While the majority of Americans receive refunds and many taxpayers look forward to getting that check in the mail, it's sometimes easy to forget that it's your own money to begin with. All you did was overpay the government during the year.

"In one sense people like to get a refund because it's nice to know that refund is eventually coming -- they can file their taxes and not think about it again," said Williams. "But really, it's just an interest free loan to the government." To top of page

 
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.19%4.26%
15 yr fixed3.23%3.27%
5/1 ARM3.34%3.45%
30 yr refi4.17%4.23%
15 yr refi3.21%3.25%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,962.83 -19.76 -0.12%
Nasdaq 4,453.47 8.56 0.19%
S&P 500 1,975.69 -3.22 -0.16%
Treasuries 2.46 -0.03 -1.16%
Data as of 3:10pm ET
Company Price Change % Change
Frontier Communicati... 6.80 0.85 14.39%
Windstream Holdings ... 11.60 1.07 10.16%
AT&T Inc 36.64 0.99 2.78%
CenturyLink Inc 40.22 2.51 6.66%
Bank of America Corp... 15.39 -0.11 -0.71%
Data as of 2:56pm ET

Sections

European leaders are trying to hit Russia where it hurts by issuing new, tougher sanctions targeting Vladimir Putin's cronies and key Russian industries. More

New annual report from U.S. government shows the long-term prognosis for Medicare has improved thanks to slower health spending, while the outlook for Social Security remains unchanged. More

Bunch o Balloons allows multiple water balloons to be filled at once. Parents are loving it -- to the tune of $645,000. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.