Here's Where Americans Are Cashing In On Dividends And Interest

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IRS data can tell us quite a bit about the division of income in the United States. Looking at income from interest and dividends might also bring out some insight into where people are saving and investing.

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The IRS has detailed statistics on income tax returns aggregated at the county level available on their website. The statistics include the total number of returns filed in each county, the number of returns with various types of income, and the total amounts of different types of income.

Here's the percentage of 2012 tax returns from each county that listed taxable interest. Some examples of taxable interest provided by the IRS include "interest on bank accounts, money market accounts, certificates of deposit, and deposited insurance dividends." In the map, counties are divided into deciles, or ten equally sized groups:

There are some pretty noticeable regional divides here. The Northeast and Great Plains states have a large number of residents earning interest on savings, as do parts of Florida, the West Coast, and central Texas. Meanwhile, the poorer parts of the South and Southwest, especially Southern and Western Texas, have very few people reporting interest on their tax returns.

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This could indicate low saving rates in these areas: people who aren't putting money away in things like interest accruing bank accounts or money market accounts will not report taxable interest income.

Here is the percentage of returns with ordinary dividend income:

The geographic pattern for income from dividend payments from corporate stock is largely similar to the pattern for interest income, with Alaska as a pretty big exception. One factor in why so many Alaskan households are filing returns with dividend income might be the Alaska Permanent Fund, a sovereign wealth fund set up by the state to distribute part of Alaska's oil wealth to its citizens. Fund dividends are taxed by the IRS as ordinary dividends, so Alaskans claiming their payout will need to report this income on their tax returns.

Here's a closeup of the New York City area. Manhattan and the more affluent suburban counties in the Hudson Valley and Long Island, home to many people holding investments in stock, are in the top decile, while the outer boroughs and parts of New Jersey have many fewer returns listing dividend income:

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