I’m looking to find tax data based on gross income, not AGI. Just went through Publication 1304, but it all seems to focus on AGI, and barely mentions gross income. But since gross income is reported, there must be some stats on it, right?
Are you talking about ‘total income’ from Form 1040, line 9?
They might not make those numbers available because it’s not as useful for analysis. For example, it leaves out things like 401(k) contributions but includes IRA contributions and payroll HSA contributions.
The adjustments to gross income usually don’t change the overall rankings much, so whether you’re looking at AGI or pre-adjustment income, it’s roughly the same.
Darcy said:
The adjustments to gross income usually don’t change the overall rankings much, so whether you’re looking at AGI or pre-adjustment income, it’s roughly the same.
My main question is the total income of the bottom 50%. A lot of it is cut out when using AGI.
@Devin
Like I said, the adjustments don’t really change rankings much. The bottom 50% by AGI will be close to the bottom 50% by gross income.
Darcy said:
@Devin
Like I said, the adjustments don’t really change rankings much. The bottom 50% by AGI will be close to the bottom 50% by gross income.
But how can I figure out their gross income? Should I just multiply the standard deduction by the number of returns to estimate it?
@Devin
I don’t think you understand how this works. The idea you’re aiming for is probably too complex to get accurate without more specific data.
Darcy said:
@Devin
I don’t think you understand how this works. The idea you’re aiming for is probably too complex to get accurate without more specific data.
What’s confusing? I just want to know what’s reported on line 9 for different income groups. If the IRS doesn’t track this, then I guess that’s my answer.
Gross income isn’t always on tax returns, especially if money was set aside for things like 401(k) contributions. It might show up on a W-2, but I’m pretty sure it’s not included in the final tax data that gets published.
There’s a reason AGI is the main metric here, as others have pointed out.
Steele said:
There’s a reason AGI is the main metric here, as others have pointed out.
AGI doesn’t really tell me what people made though. It’s especially off for the lower 50%, since they mostly take the standard deduction. The top 1%? Not so much.
@Devin
Adjusted gross income is pre-deductions, so it’s a close approximation of what people made. You’re probably thinking of taxable income, which is after deductions.
Talking about the effective tax rate?
The comments here have mostly guessed what you mean by ‘gross income.’ Maybe you’re actually thinking of section 61 gross income?
One odd result is that this includes gross income from Schedule C but doesn’t factor in business deductions. Business deductions come off adjusted gross income (section 62(a)(1)).
@Frost
In Publication 1304, it actually uses ‘gross income’ for tax filing requirements and includes things like foreign income and home sales. So there’s some sort of gross income data, even if they don’t break it down in stats.
@Devin
Exactly. But you see how using ‘gross income’ as a metric can get confusing. If I buy $50,000 in inventory and sell it for $55,000, technically, my gross income is $55,000, but I only netted $5,000. Makes a big difference in the real picture.
IRS Pub 501 shows:
> Table 1. 2023 Filing Requirements Chart for Most Taxpayers
> Gross income from a business means the amount on Schedule C, line 7, or Schedule F, line 9, without reductions for any losses.
@Frost
I’m focused on individual income though. Most folks in the lower 50% probably aren’t buying inventory and selling it or filling out Schedule Cs.