Average Deductions

The IRS issued statistical data reflecting deductions shown on individual 2001 returns (i.e., those filed in 2002). 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.

Not surprisingly, given the bear market that persisted throughout 2001, net capital losses increased by 68.8% from the year earlier, and net capital gain decreased by 44.5%. Capital gain distributions from mutual funds declined 82.8%. Also, the recession or “jobless recovery” in 2001 was evidenced by a 60.1% increase in unemployment compensation income.

The number of returns claiming standard deductions decreased 1.4% to 64.8% of all returns filed. Itemized deductions were claimed on 34.1% of returns, and represented 64.1% of total deductions.

The 2001 averages shown on the table 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 7.72 million returns reporting AGI in the $100,000 to $200,000 range, the medical expense deduction was claimed on only 282,740 of them-only 3.66%. Thus, the $10,780 average medical deduction for that AGI category represents the average claimed on those 282,740 returns.

Average Deduction Tables and Notes:

Notes:

• 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 reflects the reduction in allowable itemized deductions for high-income taxpayers that occurs when their AGI exceeds a specified amount. For 2001, 5.7 million higher income taxpayers lost a total of $30.4 billion of itemized deductions on account of this limitation, which was a decrease of 16.4% from 2000. This was probably due to indexing of the threshold for the deduction limit and to the year-over-year decrease of 2.3% in AGI.

• The figures in the table are merely averages. Only amounts actually paid for expenses that are deductible may be claimed.

• See 1999 and 2000 data below.

Data from RIA, a business unit of Thomson Corporation.https://www.RIAhome.com

Average Deduction Tables and Notes:

*Includes data consolidated from higher-income taxpayers.

(*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