Here are some interesting tidbits and tax statistics for your information and amusement.
Your Fair Share?
Remember when you dreamed about being in the top 10% of your class? Well, when you're talking about the "class" of all taxpayers, you might want to think again.
According to IRS data for the 1997 tax year, high-income taxpayers shouldered an even larger share of the tax burden, and the trend will likely continue.
The top 1% of taxpayers paid 33% of the total income taxes for 1997. This is up by 1% over the statistics released for 1996. Who's in the top 1% of all taxpayers? You were if your adjusted gross income (AGI) for 1997 was $250,700 or more.
Additionally, if your 1997 AGI was greater than $108,000, you were in the top 5% of all taxpayers. That group paid 52% of all income taxes. If your 1997 AGI was greater than $79,000, you were in the top 10% of all taxpayers... a group that paid 63% of the total income tax burden.
That's right... it's not a misprint: The top 10% of all taxpayers paid 63% of the total income tax burden.
Looking at this another way, you can see that the bottom 90% of all taxpayers only paid a 37% share of the total federal income tax burden. Additionally, the bottom 50% of all taxpayers paid only 4% of the total federal income tax burden.
It should be noted that the above statistics don't include Social Security or Medicare taxes... only income taxes. If Social Security and Medicare taxes were included in the mix, the total tax percentage for the bottom 50% of taxpayers would certainly increase.
Top 10 Return Preparer Errors
According to the IRS, the top 10 errors on Form 1040 made by paid tax return preparers through March 2, 2000 are listed below. (These errors apply to paper returns only... not to electronic filing.)
Taxpayer ID numbers (Social Security numbers) or names for dependents didn't match IRS or Social Security Administration (SSA) records, so the IRS wouldn't allow the exemptions.
Taxpayer ID numbers or names for dependents didn't match IRS or SSA records, so the IRS wouldn't allow all or part of the child tax credit.
The dependent's last name didn't match IRS or SSA records.
The Earned Income Credit was computed or entered incorrectly.
The primary taxpayer's Social Security number was incorrect or illegible.
The return didn't include nontaxable earned income from the W-2 form, so the Earned Income Credit (EIC) was required to be changed by the IRS.
The Social Security number for children who qualify the taxpayer for the EIC didn't match IRS or SSA records. The IRS was required to change the computations for the EIC.
The child tax credit was computed incorrectly.
The taxpayer's name on the top of the tax return was illegible or didn't match IRS records.
Based on the information reported, a "joint" return was filed when a "single" return was required.
So, if you had your return completed by a tax "pro," you might just want to double-check it now. Taking a few minutes today could save you time (and excessive correspondence) with the folks at the IRS. I hope you enjoyed this little sidetrack into the land of miscellaneous tax information.
This forum and the information provided here should not be relied on as a substitute for independent research to original sources of authority. The Motley Fool does not render legal, accounting, tax, or other professional advice. If legal, tax, or other expert assistance is required, the services of a competent professional should be sought. In other words, if you get audited, don't blame us.
� 1995 -
The Motley Fool. All rights reserved.
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ratings and Key Statistics provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Ter