statistics of Income

Other

Publications and Related Information

SOI Bulletin

(quarterly publication: $20.00 annual subcription, $5.50 single issue)

Contents, Vol. 4, No. 2, Fall 1984:

Controlled Foreign Corporations, 1980: A Geographical Perspective

Estate Tax Returns, 1 983

Nonresident Alien Income and Tax, 1982

Projections of Return Filings, Fiscal Years 1985-1992

Crude Oil Windfall Profit Tax, 1983

Contents, Vol. 4, No. 1, Summer 1984:

Taxpayer Usage of Forms 1 040,

1040A, and 1040EZ, 1983 Private Activity Tax-Exempt Bonds,

1983 Corporate Foreign Tax Credit, 1980 Sole Proprietorship Returns, 1982 Partnership Returns, 1982 Taxpayers Age 65 or Over, 1977-1981 Crude Oil Windfall Profit Tax, Third

Quarter, 1983

Contents, Vol. 3, No. 4, Spring 1984:

Tax Incentives for Saving

The Life Cycle of Individual Income

Tax Returns Investment Tax Credit for Individual

Taxpayers, 1981 Controlled Foreign Corporations,

1980 Partnership Employment and Payroll,

1979 Crude Oil Windfall Profit Tax, Second

Quarter, 1983

Published Regular Reports

Individual Income Tax Returns, 1982 Sole Proprietorship Returns, 1981 (60 pp., $3.00) Corporation Income Tax Returns,

1981 (142 pp., $5.50) Partnership Returns, 1980

(103 pp., $5.50)

Published Supplemental Reports

International Income and Taxes:

Foreign Income and Taxes Reported on U.S. Tax Returns, 1976-1979 (420 pp., $10.00)

Foreign Income and Taxes Reported on Individual Income Tax Returns, 1972-1978 (73 pp., $4.25)

Domestic International Sales Corporation Returns, 1972, 1973 and 1974 (192 pp., $6.00)

Foreign Tax Credit Claimed on Corporation Returns, 1974 (158 pp., $5.50)

U.S. Corporations and Their Controlled Foreign Corporations, 1974-1978 (165 pp., $6.00)

Other:

Sales of Capital Assets Reported on

Individual Income Tax Returns,

1973 (263 pp., $7.00) Individual Retirement Arrangements,

1976 (37 pp., $2.50) Individual Income Tax Returns,

Contents of Reports for

1967-1976 (15 pp., $1.50) Estate Tax Returns, 1976 (60 pp.,

$3.25) Private Foundations, 1974-1978

(113 pp., $4.75)

Selected Reports in Preparation

Corporation Income Tax Returns,

1982 Partnership Returns, 1978-1982 Individual Income Tax Returns,

1983 SOI Bulletin, Winter, 1984-1985 Sole Proprietorship Returns,

1978-1982 Compendium of Foreign Area

Statistics of Income

Studies, 1976-1982

Computer Files Available

Individual Tax Model File, 1966-1981 (Includes State Tax Model file, 1979-1981)

State Tax Model File, 1977-1981

Corporation Source Book, 1965-1976, and 1979-1981

Other tape files include: Estate Tax File, 1972, 1976 Private Foundations File, 1974 Employee Plans File, 1977 Exempt Organizations File, 1975

Microfilm Files Available

Corporation Source Book, 1977-1980

Ordering Information

Statistics of Income reports are for sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402

Public-use magnetic tape files are available on a reimbursable basis by writing to the Statistics of Income Division, Internal Revenue Service, Washington, DC 20224

1982

Individual Income Tax Returns

Publication 79(10-84)

Department of the Treasury Internal Revenue Service

Roscoe L. Egger, Jr

Commissioner

M. Eddie Heironinnus

Associate Commissioner (Data Processing)

Stanley Goldtierg

Assistant Commissioner

(Returns and Information Processing)

Fritz Scheuren

Director, Statistics of Income Division

Lillie B. Dorsey

Chief, Individual Statistics Branch

This report contains data on sources of income, adjusted gross income, exemptions, deductions, taxable income, income tax, tax credits, self-employment tax, tax withheld, and tax payments. Included are data from a new form and a new schedule: Form 1040EZ, Income Tax Return for Single Filers with no Dependents, and Schedule W, Deduction for a Married Couple When Both Work. Classifications are by tax status, size of adjusted gross income, marital status, and form of deduction. Information on high income tax returns is contained in Section 5 of this report.

Additional unpublished information from individual income tax returns, classified by States and by size of adjusted gross income, is available on a reimbursable basis from the Internal Revenue Service, Statistics of Income Division. A public-use computer tape file — the Individual Tax Model File — containing the records selected for the Statistics of Income sample is also available on a reimbursable basis from the Statistics of Income Division. This file is suitable primarily for making national level estimates. Data are provided at the State level, however, for returns with adjusted gross income under $200,000.

Suggested Citation

Internal Revenue Service Statistics of Income— 1982 Individual Income Tax Returns U.S. Government Printing Office Washington, DC 1984

Library of Congress Card No. 61-37567

For sale by the Superintendent of Documents, U.S. Government Printing Office. Washington, DC 20402

COMMISSIONER OF INTERNAL REVENUE Washington, DC 20224

October 2, 1984

The Honorable Donald T. Regan The Secretary of the Treasury Washington, DC 20220

Dear Mr. Secretary:

I am transmitting the complete report. Statistics of Income--1982, Individual Income Tax Returns. This report has been produced in accordance with the mandate of section 6108 of the Internal Revenue Code which requires the preparation and publication of statistics reasonably available with respect to the operation of the internal revenue laws.

The report, based on a sample drawn from the 95.3 million returns filed during Calendar Year 1983, presents information on taxpayers' income, exemptions, deductions, credits, and tax. These statistics reflect changes in the composition of income and computation of individual income tax effective for Tax Year 1982 under the Economic Recovery Tax Act of 1981.

Classifications used include size of adjusted gross income and marital status. Separate statistics are provided on returns with itemized deductions. There is an entire section devoted to high income returns, both taxable and nontaxable. In addition, statistics showing the number of 1040EZ returns and the income and tax amounts reported on them are presented in this report.

With kind regards.

Sincerely,

issioner

Department of ttie Treasury Internal Revenue Service III

CONTENTS

Page

Description of SOI Bulletin v

Guide to Tables vil

Section 1

Introduction and Changes in Law:

Requirements for Filing 1

Number of Returns and Sources of Income 2

Itemized Deductions 3

Computation of Tax 3

Geographic Coverage 6

Changes in Law 9

Administrative IRS Changes 14

Section 2

Sources of the Data, Description of the Sample and Limitations of the Data:

Sample Selection 15

Sample Design and Selection Criteria 15

Method of Estimation 17

Sampling Variability and Confidence Intervals 17

Processing and Management of the Sample 18

Section 3

Basic Tables:

Part 1 — Returns Filed and Sources of Income 36

Part 2 — Exemptions and Itemized Deductions 60

Part 3 — Tax Computation 75

Section 4

Index of Terms Defined 84

Explanation of Terms 85

Section 5

High Income Returns: Taxable and Nontaxable 101

Section 6

1982 Forms and Instructions 121

Section 7

Index 175

User Survey Form

statistics of Income

SOI BULLETIN

The SOI Bulletin provides the earliest published annual financial statistics from the various types of tax and information returns filed with the Internal Revenue Service. The Bulletin also includes information from periodic or special analytical studies of particular Interest to tax administrators. In addition, historical data from 1970 to the present are provided for selected types of taxpayers, as well as on tax rates for individuals and gross internal revenue collections.

The SOI Bulletin is published quarterly and available from the Superintendent of Documents, U.S. Government Printing Office during the following months:

Summer Issue July

Fall Issue October

Winter Issue January

Spring Issue April

See Order Blank Below

The following topics are among those described and analyzed in the SOI Bulletin:

• Controlled foreign corporations

• Corporation income tax returns

• Domestic international sales corporations

• Employee benefit plans

• Private foundations

• Projections of return filings

• Residential energy credit

• Safe harbor leasing

Estate tax returns

Foreign source Income of U.b. taxpayers Individual income by ZIP code area Individual income tax returns

• Sales of capital assets

• Sole proprietorship returns

• Superfund for environmental taxes

• Taxpayers age 65 or over

Investment tax credit Marginal and average tax rates Occupation data Partnership returns

• The underground economy

• Trends In personal wealth

• Trends In selected Industries

• Windfall profit tax

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CONTENTS

Page

Description of SOI Bulletin v

Guide to Tables vil

Section 1

Introduction and Changes in Law:

Requirements for Filing 1

Number of Returns and Sources of Income 2

Itemized Deductions 3

Computation of Tax 3

Geographic Coverage 6

Changes in Law 9

Administrative IRS Changes 14

Section 2

Sources of the Data, Description of the Sample and Limitations of the Data:

Sample Selection 15

Sample Design and Selection Criteria 15

Method of Estimation 17

Sampling Variability and Confidence Intervals 17

Processing and Management of the Sample 18

Section 3

Basic Tables:

Part 1 — Returns Filed and Sources of Income 36

Part 2 — Exemptions and Itemized Deductions 60

Part 3 — Tax Computation 75

Section 4

Index of Terms Defined 84

Explanation of Terms 85

Section 5

High Income Returns: Taxable and Nontaxable 101

Section 6

1982 Forms and Instructions 121

Section 7

Index 175

User Survey Form

' Inter • Ur ' Occ:

Willis":-;-

De|)»;: 0«No

Statistics of Income

SOI BULLETIN

The SOI Bulletin provides the earliest published annual financial statistics from the various types of tcix and information returns filed with the Internal Revenue Service. The Bulletin also includes information from periodic or special analytical studies of particular interest to tax administrators. In addition, historical data from 1970 to the present are provided for selected types of taxpayers, as well as on tax rates for individuals and gross internal revenue collections.

The SOI Bulletin is published quarterly and available from the Superintendent of Documents, U.S. Government Printing Office during the following months:

Summer Issue July

Fall Issue October

Winter Issue January

Spring Issue April

See Order Blank Below

The following topics are among those described and analyzed in the SOI Bulletin:

• Controlled foreign corporations

• Corporation income tax returns

• Domestic international sales corporations

• Employee benefit plans

Private foundations Projections of return filings Residential energy credit Safe harbor leasing

Estate tax returns

Foreign source income of U.S. taxpayers Individual income by ZIP code area Individual income tax returns

• Sales of capital assets

• Sole proprietorship returns

• Superfund for environmental taxes

• Taxpayers age 65 or over

• Investment tax credit

• Marginal and average tax rates

• Occupation data

• Partnership returns

• The underground economy

• Trends in personal wealth

• Trends in selected industries

• Windfall profit tax

Mail this form to: Superintendent of Documents, U.S. Government Printing Office, Department No. 39-FF, Washington, D.C. 20402

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Statistics of Income

SOI PUBLICATIONS

And Other Information Available

Department of the Treasury Internal Revenue Service

Publications are tor sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC. 20402

Regular Statistics of Income Reports

Statistics of Income (SOI) Bulletin (Quarterly) Publication 1136

Corporation income lu returns (prelimin«ry) Emptoyve benefit plans Estate tax returns Exempt organizations Foreign irxxxne and taxes Individual ir>corT>e lax returns (preliminary)

Nonresident alien income and tax

Partnership returns

Personal wealth

Protections of returns 10 tM filed

Sales of capital assets Sole proprietorship

returns Superfund for environmental taxes Underground economy Windfall profit tax

Historical statistics- Individual income tax returns Nontarm sole proprietorship returns Partnership returns Corporation income tax returns Internal Revenue collections Types of returns filed

Individual Income Tax Returns Publication 79

PTV49frta HlflMIIMUOfl GO —

Sourc«a of irKome Ad|ua*«d groaa income Ad)08tm«nl» to income Itemized deductions

Exemptions Taxable income Income lax Tax credits

Income tax withheld and estimated tax payments

Tax due and overpayment refunded

Data classified by— Size of ad|usted gross income States

Taxpayer's marital status and sex Taxpayers age 65 or over

Corporation Income Tax Returns Publication 16

Pre— nU Information on-

Recetpta Deductions Net income

Taxable income Income tax

Tax credits

Distributions to stockholders

Assets and liabilities

Data classified by- Industry. Accounting period Size of total assets Size of business receipts

Other Information Available

All the Items listed below, aa well as other unpublished or special tabulations from the STATISTICS OF INCOME PROGRAM, are available on a cost- reimboraable basis Further details, including ordering information, can be obtained by writing to Director, Statistics of Income Division D R S. Internal Revenue Service. 1111 Constitution Avenue. N W . Washington. D C 20224 Tape files indicated with an (A) are available (on a reimbursable basis) through the Machine Readable Archives Division (NRR) of the National Archives and Records Service. Washington D C 20408

Corporation Sourc* Book

Presents detailed income and balance sheet data classified by ir>dustry and size of total assets A general description is available upon request

Small Araa Data

Data on individual income tax returns, exemptions, and adjusted gross income are presented by State, county, and SMSA Also, the number of persons who moved from one location to another based on addresses shown on the returns A general description is available upon request

Public-Use Tape File*

Continuing

Individual Tax fylodel 1966-78 (A) 1979-81 Corporation Source Book 1965-76 (A) 1977-81 Estate Tax Returns, 1972. 1976 Private Foundations, 1974 (A), 1979 Sole Proprietorships 1980

New Migration Data

County Data 1980-82 1982-83

Area to Area Flow Data. 1978-80 1980-81

Guide to Tables*

Accumulated size of adjusted gross income 1.1

Adjusted gross income:

All returns 1971-1982 C

By plus tax preferences 5A, 5B, 5C, 5D

Nontaxable returns, 1971-1982 C

State G

Additional tax for tax preferences F, 3.1

Adjustments 1 .4

Age exemptions 2.5, 2.6

Alternative income concepts:

See high income returns under various income concepts

Coefficient of Variation:

Adjusted gross income J, K, L

Sources of income K

Tax liability L

Tax payments L

Contributions deduction:

By size of adjusted gross income 2.1

Type of contributions 2.1

Cumulated number of returns by size of adjusted gross income 1.1

Deficit, size of, on nontaxable returns 1.5

Earned income credit:

Computation of 3.4

Exemptions:

By marital status:

Number of exemptions 2.4

Type of exemption 2.4

By size of income:

Number of exemptions 2.3

Type of exemption 2.3

Expandsd income:

See high income returns under various income concepts

Form:

1040A returns I, 1.6

1040EZ returns H

Number of 1040, 1040A, and 1040EZ returns in the population and sample I

High income returns under various income concepts: With and without modified (world-wide) total

income tax 5B, 5D, 5E, 5.2, 5.4, 5.6, 5.8

With and without total income

tax 5A, 5C, 5E, 5.1, 5.3, 5.5, 5.7

Income averaging tax computation 3.1

Income tax:

See total income tax

Interest paid deduction:

By size of adjusted gross income 2.1

Interest deduction by type 2.1

Itemized deductions:

Comparison by size of adjusted gross

income, 1981 and 1982 D

High income returns:

Deductions as percent of income 5.5, 5.6

Item with largest tax effect 5.3, 5.4

Major types 2.1

Marital status on returns with 2.2

Sources of income on returns with 2.2

Joint returns:

See marital status

Marital status:

Exemptions by type 2.4

Itemized deduction returns 2.2

Number of returns by size of adjusted gross

income 1.2

Sources of income 1.3

Medical and dental expenses deduction:

By size of adjusted gross income 2.1

Medical and dental expenses by type 2.1

Miscellaneous deductions:

By size of adjusted gross income 2.1

Miscellaneous deductions by type 2.1

Nontaxable returns by size of adjusted gross income or deficit 1.5

Nontaxable returns, high income, by size of adjusted gross income 5A, 5.7, 5.8

Nontaxable returns, high income, 1979-1982 5E

Refunds:

See overpayment refunded

Sources of income:

Comparison of sources, 1981 to 1982 A

High Income returns 5.1, 5.2

Itemized deduction returns 2.2

Marital status 1.3

Number of exemptions 2.3

Size of adjusted gross income:

All returns 1.4

Form 1 040A returns 1.6

Taxpayers age 65 or over 2.^

*Basic tables are arranged in two sections in this report. Those table numbers with the first digit 1 through 3 can be found in Section 3 - Basic Tables. The first digit of the table number is the part in Section 3 where the table appears. Tables which have numbers with a beginning digit of 5 can be found in Section 5 - High Income Returns. After the table number has been located in the Guide, the thumb index on the back cover may be used to access the corresponding section or part of the report. There is also an index which can be found in Section 7.

VII

Individual Returns/1982

State data:

Adjusted gross income G

Income tax S

Number of returns G

Statutory adjustments 1.4

Tax: See total income tax

Tax computation by type E, 3.1

Tax credits:

Type of credit by size of adjusted gross

income 3-3

Tax refund: See overpayment refunded Taxable income:

As a percent of various income concepts 5C

Modified taxable income as a percent of various income concepts 5D

Taxes paid deduction:

By size of adjusted gross income 2.1

By type of taxes 2.1

Taxpayers age 65 or over:

Marital status 2.6

Sources of income 2.5

Total income tax:

As percent of adjusted gross income 3.2

Returns classified by modified total income tax

as a percent of various income concepts 5.8

Returns classified by total income tax as a

percent of various income concepts 5.7

Size of adjusted gross income, cumulated 1.1

Type of tax computation 3.1

VIII

Section 1

Introduction and Changes in Law

The statistics presented in this report are estimates based on a stratified probability sample of individual income tax returns, selected before audit, and repre- sent coverage of the 95.3 million Forms 1040, 1040A, and 1040EZ filed by the nation's taxpayers for Income Year 1982. The number of returns filed for 1982 repre- sents a decrease of approximately 59,000 from those filed for 1981.

This report is organized into seven sections. This first section provides some summary data for 1982, as well as information on tax law changes from 1981 to 1982. In Section 2, there is a detailed description of the sample of income tax returns upon which the statistics for 1982 are based, as well as a discussion of the method of estimation used, the sampling varia- bility of the data, and other limitations. Section 3 presents the basic tables that contain statistics on income sources (Part 1), deductions and exemptions (Part 2), and the computation of tax liability (Part 3).

Section 4 contains, in alphabetical order, a detailed explanation of each of the terms used in the statis- tical tables. Section 5 presents data on High Income Tax Returns, prepared by the Department of the Treas- ury, Office of Tax Analysis. Special definitions apply to the terms used in this section, and are given in the accompanying text. Facsimiles of the more important tax return forms (and their instructions) from which the data were gathered for 1982 are reproduced in Sec- tion 6. Section 7 is an index to the information pro- vided in this report. The last page of the report is a User Survey, designed to enable the Internal Revenue Service to know which parts of this report are most important.

REQUIREMENTS FOR FILING

The Internal Revenue Code of 1954, as amended, pro- vided the legal basis for tax activity detailed in this report. Criteria specified by the Internal Revenue Code covering the filing of a tax return and, therefore, determining the basic coverage of the information in this report are described below.

The principal criterion which determined whether an individual had to file a return was the size of gross income (all income received in the form of money, prop- erty, and services, that was not, by law, expressly exempt from taxation). For 1982, as for 1981, a return had to be filed by:

(1) a single person (other than spouse) under age 65 with gross income $3,300;

a surviving of at least

(2) a single person (other than a surviving spouse) age 65 or over with gross income of at least $4,300;

(3) a surviving spouse under age 65 with gross income of at least $4,400;

(4) a surviving spouse age 65 or over with gross income of at least $5,400;

(5) a married couple, filing a joint return, with both spouses under age 65 and with a combined gross income of at least $5,400;

(6) a married couple, filing a joirrt return, with one spouse age 65 or over and with a combined gross income of at least $6,400;

(7) a married couple, filing a joint return, with both spouses age 65 or over and with a combined gross income of at least $7,400; and

(8) a married person, regardless of age, whose spouse was filing a separate return, if that married person had a gross income of at least $1,000.

Notwithstanding these provisions, any individual who could be claimed as a dependent on another person's return had to file if he or she had "unearned income" (such as dividends, interest, or capital gains) of $1,000 or more. Three additional groups were required to file a tax return if their gross income exceeded $1,000. The three were: nonresident aliens, U.S. citi- zens entitled to special tax benefits because most of their gross income is from U.S. possession sources, and individuals fi-ling short period returns because of changes in their annual accounting period. Self- employed persons had to file if they had "self-employ- ment income" of at least $400, in order to pay self- employment tax. Any person who received any advance earned income credit payments from an employer in 1982 was also required to file. In addition, even if income was less than the above amounts, an individual had to file a return for taxes owed for social security on tips not reported to an employer, minimum tax, tax on an individual retirement arrangement, and tax from recomputing prior-year investment credit.

Data shown in this report that cover returns from taxpayers with income levels below those listed are generally limited to individuals filing for a refund of income tax withheld or to obtain the earned income credit.

Most taxpayers were required to file tax returns within three and one-half months after the close of their accounting periods. Since the accounting period used by nearly all individuals for Tax Year 1982 was the calendar year, this meant that returns were due by April 15, 1983. However, each taxpayer could be granted, upon request, one automatic four-month exten- sion of time to file. In addition, U.S. citizens residing or traveling outside the United States and Puerto Rico on the due date were automatically granted (without requesting) a two-month extension.

*This report was prepared under the direction of David Paris, Chief, Returns Analysis Section, Individual Statistics Branch. Susan Hostetter was responsible for production of this report. She was assisted by Marshall Epstein (technical matters). Dawn Nester and Ginger Newbold (typing).

Individual Returns/1982

Table A. — Sources of Income and Selected Tax Items, 1981 and 1982

[All figures are estimates based on samples — money amounts are in thousands of dollars]

Item

1981

1982

Change, 1981 to 1982

(1)

(2)

Number of returns, total.

Taxable

Nontaxable

Adjusted gross income less deficit

Sources of Income:

Salaries and wages

Interest and dividends:

Interest received

Dividends received

Interest and dividends in adjusted gross income

Business or profession net profit less loss

Sales of capital assets net gain less loss

Sales of property other than capital assets net gain less loss.

Pensions and annuities in adjusted gross income

Rent net income less loss

Royalty net income less loss

Estate or trust net income less loss

Farm net rental income less loss

Partnership net profit less loss

Small Business Corporation net profit less loss

Farm net profit less loss

All other sources (net)

Total statutory adjustments

Total itemized deductions

Number of exemptions

Taxable income

Zero bracket amount

Income tax before credits. Total credits

Income tax after credits. .

Additional tax for tax preferences:

Total

Minimum tax

Alternative minimum tax

Total income tax

Self-employment tax

Total tax liability

95,396,123 76,724,724 18,671,399

1,772,604,303

1,486,100,497

140,559,366

48,161,460

178,097,705

53,071,628

30,818,535

232,444

51,886,406

-4,848,763

5,826,913

3,965,822

2,083,673

-137,650

-817,171

-7,811,958

5,578,509

31,442,288

256,448,021

231,222,374

1,410,880,665

240,752,400

293,590,035

11,288,005

282,302,029

1,826,960 565,641

1,261,318 284,128,989

6,687,400 291,126,542

95,337,432 77,035,300 18,302,132

1,852,135,465

1,564,995,190

157,021,475

54,044,825

209,163,885

50,573,163

34,403,728

614,103

60,123,166

-8,478,178

6,318,826

5,746,586

2,177,533

-908,409

-849,757

-9,833,548

2,976,242

64,887,065

284,506,318

232,191,565

1,473,348,899

241,461,855

283,931,862

7,854,493

276,077,369

1 277

6 284

,519,921 450,706 ,069,214 ,597,290 ,827,299 ,707,890

(3)

-58,691

310,576

-369,267

79,531,162

78,894,693

16,462

5,883

31,066

-2,498

3,585

381

8,236

-3,629

491

1,780

-770

-32

-2,021

-2,602

,109 ,365 ,180 ,465 ,193 ,659 ,760 ,415 ,913 ,764 ,860 ,759 ,586 ,590 ,267

33,444,777

28,058,297

969,191

62,468,234

709,455 -9,658,173 -3,433,512 -6,224,660

-307,039 -114,935 -192,104

-6,331,699 139,899

-6,418,652

Consists of State income tax refunds, windfall profit tax refunds less net adjustment withheld, alimony, unemployment compensation in adjusted gross income, and other income 1 NOTE: Detail may not add to total because of rounding.

for windfall profit tax ess loss.

NUMBER OF RETURNS AND SOURCES OF INCOME

Table A shows that there were 95.3 minion returns filed for Tax Year 1982— a decrease of about 59,000 from 1981. Taxable returns increased by 311,000 to 77.0 million while nontaxable returns dropped by 369,000 to 18.3 million. Despite the essentially stable filing population there were increases in income from salaries and wages, interest, pensions, dividends, royalties, and sales of capital assets. None of these items increased as fast as they had for 1981. For Tax Year 1982 salaries and wages increased by 5.3 percent from Income Year 1981. As in previous years most sources of investment income increased at a faster rate than salaries and wages. For instance, dividends received increased by 12.2 percent and interest income rose 11.7 percent from Tax Year 1981. In addition,

royalties grew by 8.4 percent. Although not a source of investment income, pensions and annuities increased by 15.9 percent [1]. More details on the number of returns and sources of Income are shown in the tables of Section 3, Part 1.

Tables A, B, and C show the movement of returns into higher income classes, a trend continued from previous years. As seen in Figure A, one result of this shift was a reduction in the number of nontaxable returns. Since 1977 the proportion of nontaxable returns to total returns has declined each year. The most sig- nificant cause of this yearly decline seems to have been the large drop in the number of returns with incomes under $5,000. Figure B shows the downward movement in the amount of nontaxable returns as a per- centage of total returns for recent years.

Individual Returns/1 982

Table B. — Number of Returns by Size of Adjusted Gross Income and by Marital Status, 1981 and 1982 [All figures are estimates based on samples]

Size of adjusted gross income and marital status

1981

1982

Change, 1981 to 1982

Number of returns for all adjusted gross income classes.

Joint returns of husbands and wives

Separate returns of husbands and wives

Returns of heads of households

Returns of surviving spouses

Returns of single persons

Under $5,000, total*

Joint returns of husbands and wives

Separate returns of husbands and wives

Returns of heads of households ■

Returns of surviving spouses

Returns of single persons

$5,000 under $10,000, total

Joint returns of husbands and wives.... Separate returns of husbands and wives.

Returns of heads of households

Returns of surviving spouses

Returns of single persons

$10,000 under $15,000, total

Joint returns of husbands and wives.... Separate returns of husbands and wives.

Returns of heads of households

Returns of surviving spouses

Returns of single persons

$15,000 under $20,000, total

Joint returns of husbands and wives.... Separate returns of husbands and wives.

Returns of heads of households

Returns of surviving spouses

Returns of single persons

$20,000 under $25,000, total

Joint returns of husbands and wives.... Separate returns of husbands and wives.

Returns of heads of households

Returns of surviving spouses

Returns of single persons

$25 , 000 or more , total

Joint returns of husbands and wives.... Separate returns of husbands and wives.

Returns of heads of households

Returns of surviving spouses

Returns of single persons

(1)

(2)

95,396,123

45,697,648

1,498,875

8,376,207

112,893

39,710,500

18,746,376

2,429,333

372,749

1,562,353

12,194

14,369,747

17,650,878

4,688,362

352,435

2,458,236

26,824

10,125,021

14,193,160

5,314,219

304,724

1,960,158

16,656

6,597,403

10,998,194

5,888,729

207,469

1,117,346

17,909

3,766,741

9,117,136

6,109,457

136,752

627,311

15,683

2,227,933

24,690,379

21,267,548

124,746

650,803

23,627

2,623,655

95,337,432

46,050,287

1,157,171

8,444,174

114,351

39,571,449

17,952,034

2,560,063

328,249

1,396,925

8,215

13,658,582

17,039,853

4,410,448

300,672

2,219,620

32,303

10,076,810

14,306,781 5,519,737

241,765 2,173,262

*15,695 6,356,322

10,534.728

5,444,083 136,356

1,160,502 *15,326

3,778,461

8,803.387

5,524,145

69,575

641,507

11,945

2,556,215

26,700,649

22,591,811

80,554

852,358

30,867

3,145,059

(3)

-58,691

352,639

-341,704

67,967

1,458

-139,051

-794,342 130,730 -44,500

-165,428 -3,979

-711,165

-611,025 -277,914

-51,763

-238,616

5,479

-48,211

113,621 205,518 -62,959 213,104 -961 -241,081

-463,466

-444,646

-71,113

43,156

-2,583

11,720

-313,749

-585,312

-67,177

14,196

-3,738

328,282

2,010,270

1,324,263

-44,192

201,555

7,240

521,404

*Estimate should be used with caution because of the small number ^Includes returns with no adjusted gross income.

of sample returns on which it is based.

ITEMIZED DEDUCTIONS

Table D indicates a continuing shift towards itemiz- ing deductions in 1982, with 1.9 million more returns for Tax Year 1982 than for 1981 showing itemized deduc- tions. This increase in itemized deductions was due in part to the rise in average adjusted gross income which led to higher amounts that could be claimed as a sales tax deduction and as a contributions deduction. The lack of an increase in the zero bracket amount also contributed to this increase. Another important factor contributing to the rise in itemized deductions was a large increase in medical deductions resulting primarily from substantial increases in physician fees and private hospital charges [2].

The percentage of returns with itemized deductions has almost risen to its level in 1974, the year preced- ing a period of major law changes which increased the

standard deduction and later ffor 1977) introduced the zero bracket amount. Figure C shows the percentage of returns with itemized deductions over a ten-year period.

Details on the types of itemized deductions, as well as the types of exemptions, for 1982 are found in the tables in Section 3, Part 2.

COMPUTATION OF TAX

The taxpayer, in determining the 1982 total tax liability, had to take into account several factors. These included:

(1) "income subject to tax," generally adjusted

4 Individual Returns/1982

Table C. — All Returns and Nontaxable Returns, by Size of Adjusted Gross Income, 1971-1982

(All tigures are estimates based on samples]

	All relurns	Nonlaxabie	returns	All relurns	Nontaxable	relurns	All returns	Nontaxable	relurns
Size of adjusted grdss income	Number	Percenl of all returns	Number	Percenl ol all relurns	Number	Percenl 01 all returns
	1971	1972	1973
Total	74,576,407 27.155.048 21,443.479 14,604.270 6,453,851 2,377.638 968.565 1.077.844 404.692 72.856 15.089 2.192 883	14.660,035 14.002.305 602.100 37.416 7,834 4.475 1.642 2.884 1.076 216 67 12 3	19.7 51 5 28 03 0 1 02 02 03 03 03 04 0.5 0,3	77,572,720 26.963.312 21.175.854 15.364.155 7.773.413 3.093.728 1.266.377 1.337.578 483,677 91,707 19.233 2.666 1.030	16,703,713 15.738.952 850.252 79.852 18.266 6.388 4.734 3.254 1.590 317 88 14 6	21,5 58 4 40 05 02 02 04 02 03 03 05 05 06	80,692,587 27.037,618 20.581.732 15.804.109 9.091.001 3.943.993 1.741.991 1.759.837 596.663 110.176 21.929 2.635 903	16.425,425 15.491.830 797.608 77.445 33.242 9.769 5,131 7.312 2.466 456 142 15 7	20.4
Under S5 000	573
S5 000 under 510 000	39
S10 000 under $15 000	05
	04
S20 000 under S25 000	02
$25,000 under $30,000 $30,000 under $50.000 $50 000 under $100 000	0.3 04 04
$100,000 under $200.000 $200,000 under $500.000 $500,000 under $1.000.000	04 0.6 0.6 0.8

	1974	1975	1976
Total	83,340,190 26.765,673 20.586.617 15.670.258 10.071.087 4.944.795 2.259.928 2.173.868 700.528 135.304 26.842 3.194 1.096	16,005,423 15.046.441 797.997 104.725 25.517