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![handle is hein.taxfoundation/ffdedxz0001 and id is 1 raw text is: TAX
FOUNDATION
November 29, 2012
No. 343
Summary of Latest Federal Income Tax Data
By
William McBride, PhD
The Internal Revenue Service has released new data on individual income taxes, reporting on calendar year
2010.1 As we do every year, we present a summary of that data along with the historical data back to 1980.
This year the IRS changed its methodology to exclude dependent filers and include returns with negative
AGI. For comparison's sake, we present this new data as far back as the IRS provides, to 2001, along with
the previously reported data for prior years. Here follows the IRS statement regarding this year's change:
This release including the Tax Year 2010 percentile data were [sic] produced using an improved
methodology to that of previous SOI releases of percentile data in order to refine the accuracy of the
percentile estimates. The data in these tables are based on a modified universe of tax returns. In
particular, all individual income tax returns except returns of dependents are now used in the
computation whereas previous releases were based on only returns with positive AGI. This change
was the result of feedback and recommendations made by users of these statistics who encouraged
SOT to assess the utility of the information. The data in the improved tables shown here, while more
accurate for the dollar amounts shown are still very similar in terms of percentages when compared to
the data produced under the previous methodology.2
The new methodology results in about 7 to 9 million fewer tax returns in most years but about 5 million
fewer returns in 2009 due to the high number of negative AGI returns that year. It also results in a slight
overstatement of both the income shares and the average tax rates of the top 1 percent and a slight
understatement of the tax shares of the top 1 percent, as compared with the previous methodology.3
' Internal Revenue Service, SO1 Stats - Individual Statistical Tables by Tax Rate and Income Percentile,
http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Statistical-Tables-by-Tax-Rate-and-Income-Percentile.
2 Id.
' David Logan, Summary ofLatest Federal Income Tax Data, TAX FOUNDATION FISCAL FACT No. 285 (Oct. 24, 2011),
http://taxfoundation.org/article/summa.ry-latest-federal-individual-income-tax-data-0. For a more directly comparable time series
of data across decades going back to 1979, see the CBO's report, discussed in William McBride, CBO Report Shows Increasing
Redistribution in the Tax Code Despite No Long-Term Trend in Income Inequality, TAX FOUNDATION FISCAL FACT No. 322 (July
24, 2012), http://taxfoundation.org/article/cbo-reprt-shows-increasing-redistribution-tax-code-despite-no-lng-term-trend-
income-inequality.](ViewImageLocal?handle=hein.taxfoundation/ffdedxz0001&div=1&collection=&method=preview&ext=.png&size=3)