|Doeren Mayhew |
Individual adjusted gross income rebounds
In the IRS's just-released Winter 2012 Statistics of Income bulletin, the agency reported that individual adjusted gross income (AGI) had increased in 2010 after a decline in 2009. The recession peaked in 2009, a year which saw the lowest percentage of taxable returns in more than 20 years. Based upon the latest IRS taxpayer data, consensus is that the recession ended and recovery began in June 2009, which the income statistics for the following year ostensibly support.
In compiling its report, the IRS relied on data from 142.9 million individual income tax returns filed by U.S. taxpayers for the 2010 tax year. This represented a 1.7 percent increase from the 140.5 million returns filed for 2009. Significantly, individual AGI increased from $7.6 trillion in 2009 to $8 trillion for 2010, bringing it to levels comparable with the pre-recession 2007 tax year. The greatest component of 2010 AGI was wages and salaries, which increased 2.1 percent from nearly $5.8 billion in 2009 to $5.9 billion in 2010.
Taxable income for the 2010 tax year also increased 6.9 percent to $5.5 trillion and total income tax increased by 8.8 percent to $0.9 trillion ($900 billion). The 2010 alternative minimum tax increased by 20.3 percent to $24.3 billion, the IRS reported. Notable income items that contributed to the 2010 AGI increase included net capital gains, ordinary dividends, and IRA distributions.
Statutory adjustments to total 2010 tax year income increased 5.7 percent to $115.2 billion, with 20 percent of that total representing the deduction for one-half of self-employment tax ($22.5 billion) despite a larger increase in self-employment income. The student loan interest deduction increased 10.7 percent to $9.3 billion, and the Code Sec. 199 domestic production activities deduction increased by 43 percent to $8.2 billion.
Doeren Mayhew is a Michigan Financial Firm located in Troy, MI.