Importance of Various Sources of Income by Income Group

 
 
August 04, 2009

Most Americans have multiple sources of income, and not all sources of income are treated the same by the tax code. Using recently released IRS data, the following table shows, by Adjusted Gross Income group, the share of each group's total income that comes from various sources. For example, the table shows that for tax returns with an AGI of over $10 million, only 16 percent of total income comes from wages and salaries, while over 62 percent comes from capital gains and dividends. At the bottom of the income spectrum, however, it's clear that wages are the predominant income source. (Note those tax returns with AGI of less than $10,000 should be taken with caution given that some of these returns are of taxpayers with usually high incomes yet large losses.)

This table shows the degree to which the income profiles of tax returns vary by the tax returns' differing income levels. Business income includes income from schedules C, E, and F less income from trusts and estates. Total income (the denominator in each of these percentages is not AGI but rather AGI plus statutory adjustments a.k.a. above-the-line deductions.)

AGI Group Salaries/Wages Taxable Interest Cap Gains/Dividends Biz Income Taxable Retirement Taxable S.S. All Other
All Returns 66.31% 3.04% 12.99% 7.95% 7.25% 1.90% 0.56%
1-5k 87.27% 4.62% 4.53% 4.46% 5.94% 0.11% -6.93%
5-10k 75.45% 2.97% 3.02% 10.41% 7.79% 0.09% 0.27%
10-15k 71.21% 3.21% 2.39% 9.76% 11.46% 0.09% 1.89%
15-20k 76.89% 2.69% 2.28% 5.18% 10.89% 0.20% 1.88%
20-25k 81.07% 2.21% 1.92% 3.24% 9.37% 0.67% 1.52%
25-30k 81.73% 1.83% 1.81% 3.01% 8.96% 1.28% 1.39%
30-40k 81.86% 1.91% 1.68% 2.63% 8.64% 2.00% 1.28%
40-50k 80.41% 1.81% 2.01% 2.78% 8.91% 2.79% 1.29%
50-75k 77.47% 2.10% 2.80% 2.69% 9.88% 3.74% 1.32%
75-100k 76.45% 2.16% 3.58% 3.48% 9.80% 3.38% 1.14%
100-200k 73.17% 2.32% 6.22% 5.91% 8.93% 2.23% 1.22%
200-500k 59.62% 3.25% 13.87% 15.22% 5.22% 1.22% 1.60%
500k-1m 47.27% 3.77% 22.89% 21.62% 2.15% 0.57% 1.73%
1-1.5m 38.90% 4.42% 28.38% 24.48% 1.37% 0.34% 2.11%
1.5-2m 35.13% 4.55% 32.03% 24.85% 1.01% 0.25% 2.19%
2-5m 31.75% 4.80% 37.24% 23.08% 0.63% 0.15% 2.35%
5-10m 26.75% 5.23% 46.37% 18.98% 0.39% 0.07% 2.21%
10m+ 16.02% 6.47% 62.33% 12.57% 0.14% 0.02% 2.46%

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