The IRS recently issued updated statistical data reflecting deductions shown on individual 2000 returns (i.e., those filed in 2001). Tax analysts at RIA, a Thomson business, have analyzed the information and put it into a form that allows taxpayers to see what others in their income range are claiming on their returns.
The 2000 averages shown on the tables below are for those itemizers within the income range who claimed a deduction for that particular category. For example, while itemized deductions were claimed on about 7.25 million returns reporting AGI in the $100,000 to $200,000 range, the medical expense deduction was claimed on only 278,840 of them-about 3.85%. Thus, the $12,072 average medical deduction for that AGI category represents the average claimed on those 278,840 returns. As income dropped, the percentage claiming the medical expense deductions rose.
For certain other categories and income ranges, the averages are based on almost all itemizers claiming deductions. For example, 99.53% of itemizers with AGI of $100,000 or more claimed deductions for taxes paid.
RIA computed the averages from IRS statistical data from the Fall 2002 IRS Statistics of Income Bulletin, which shows the number of taxpayers in each income category that claimed the particular itemized deduction and the aggregate amounts they deducted.
The figures in the tables are merely averages from filed returns. Only amounts actually paid for expenses that are deductible may be claimed.
Average Deduction Tables and Notes:Average Deductions Claimed, 2000
By Common Adjusted Gross Income Levels (in thousands)AGI$0-15$15-30$30-50$50-100$100-200$200-$500Medical&Dental6,9355,4054,6736,16312,07231,673Taxes1,9942,1803,0314,9229,26320,523Contributions1,3191,7001,9042,3523,7568,246Interest6,3816,1326,4657,89911,30118,319Total Itemized11,40211,18612,12815,67124,16642,426Percentage
Itemizing3.9%15.2%37.5%68.9%89.7%93.4%Average Deductions Claimed, 2000 (continued)
By Higher Adjusted Gross Income LevelsAGI$500-$1 Mil$1-1.5 Mil$1.5-2 Mil$2-5 Mil$5-10 Mil$10 Mil+Medical&Dental72,61381,25274,692137,143* * *Taxes47,30782,868114,163185,719402,6771.37 MilContributions20,08839,06654,99399,575260,8621.59 MilInterest31,14243,13551,13578,495157,595582,409Total Itemized82,044134,458175,640287,271646,9842.87 MilPercentage
Itemizing91.3%89.5%91.3%92.4%94.6%97.1%*Includes data consolidated from higher-income taxpayers.
Because of averaging within categories and the fact that not all deduction categories are listed (e.g., miscellaneous itemized deductions are not included), the total amount of average itemized deductions for an AGI range does not equal the sum of the averages for the categories above it. Also, filers often do not claim itemized deductions in a particular category.
The amount shown as total itemized deductions is the amount allowed in calculating taxable income after the reduction that occurs at higher income levels for itemized deductions other than medical, investment interest, non-business casualty and theft, and gambling losses. For 2000, over six million higher income taxpayers lost a total of about $38 billion of itemized deductions on account of this limitation. The amounts shown for medical deductions are after application of the 7.5% of AGI floor.
In previously issued preliminary tax return data for 2000, IRS did not break down data into separate income categories for individual taxpayers with income of $200,000 or higher. In the recently released information, IRS provides separate data for seven categories of high-income individuals: AGI of $200,000 to under $500,000; $500,000 to under $1 million; and $1 million to under $1.5 million; $1.5 million to under $2 million; $2 million to under $5 million; $5 million to under $10 million; and $10 million and above. As might be expected, there are many differences in the average deductions claimed by taxpayers in these distinct categories from the previously reported averages for all individuals with AGI of $200,000 and above. See 1999 data below.
The figures in the table are merely averages. Only amounts actually paid for expenses that are deductible may be claimed.
___Average Deductions Claimed, 1999
By Adjusted Gross Income Levels (in thousands)AGI$50-60*$60-75$75-100$100-200$200-500$500-$1M$1M & upMedical&Dental5,0746,4706,39810,46428,15269,425100,812Taxes3,9194,6335,9129,27620,26147,720187,792Contributions1,8832,1802,6503,7168,44720,828149,945Interest6,8847,4268,31411,00517,74929,32384,298Total itemized14,185**14,185**17,17923,74541,56981,447338,781Percentage
(*Adjusted Gross Income in Thousands of Dollars)
* combines IRS categories for AGI of $50,000 to $55,000, and $55,000 to $60,000
** $50,000 to $75,000 of AGI