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Tuesday, April 12, 2011

IRS Data for 2009 for Individuals

The IRS recently released some preliminary data for 2009 individual tax returns. I haven't had time to analyze all of it or crunch numbers, but with a quick review, this looks interesting:

  • 140.5 million individual tax returns were filed

  • 60% were 1040, 28% were 1040A and 12% were 1040EZ

  • 83% of returns report salaries and wages

  • 41% reported taxable interest income

  • 21% reported qualified dividend income

  • 7% claimed student loan interest deduction

  • 1.7% claimed the tuition deduction (likely low because they also likely qualify for an education credit and claim that instead)

  • 7.6% claimed an education credit (up 37.2% from 2008, likely because the temporary American Opportunity Tax Credit covers four years of college while the Hope credit which it temporarily replaces only covered two years)

  • 17% claimed the child credit

This data can help in identifying provisions that perhaps are not needed, such as the tuition deduction. The Hope and Lifetime Learning Credits cover a lot of education, perhaps it is just not worthwhile to provide a deduction claimed by very few who do not qualify for either of the credits.

The data also shows the number of returns and dollar amounts for various income levels which can also help identify if any special rules are skewed to any one particular income group.

The data is just figures. Since there is no requirement to gather data on whether the purpose behind various tax incentives is being met. That would be interesting and helpful in evaluating provisions - an accountability analysis. For many provisions, the goals would need to be better articulated so an accountability measure could be designed.

More later.

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