Seniors Earn Lion's Share of Dividend Income According to New IRS Data

July 14, 2010

The IRS recently released some interesting new tax return data by age group for 2008. Today we'll focus on taxpayers with dividend income because the data sheds light on how seniors will be impacted if the current 15 percent tax rate on dividend income is allowed to expire at the end of 2010 and dividends revert to being taxed at the personal income tax rate, which could go as high as 39.6 percent.  

Of the roughly 142 million tax returns filed in 2008, 26.4 million returns reported nearly $159 billion in dividend income qualifying for the lower 15 percent rate. While 19 percent of all returns reported dividend income, 42 percent of taxpayers over 65 reported dividend income. The age group with the next highest share of dividend earners is those aged 55 to 65.

Overall, taxpayers over age 55 account for 71 percent of all dividend income earned. The lion's share of dividend income - 48 percent - is earned by those over 65, and dividend income accounts for 6 percent of all the income earned by these taxpayers.

Tomorrow we'll post data for capital gains income by age group.

 

2008 Dividend Statistics by Age Group

 

Age Group

Number of Tax Returns with Dividend Income

Qualified Dividend Income ($Thousands)

Percentage of  Returns within Age Group with Dividend Income

Percentage of Dividend Returns in this Age Group

Percentage of Dividend Income Earned by Age Group

Dividend Income as a Share of Total AGI

All returns

26,409,275

158,975,193

19%

100%

100%

2%

   Under 18

622,175

678,324

23%

2%

0%

5%

   18 under 26

1,454,778

1,617,503

6%

6%

1%

0%

   26 under 35

1,891,073

3,358,412

8%

7%

2%

0%

   35 under 45

3,464,240

11,749,881

13%

13%

7%

1%

   45 under 55

5,219,625

27,761,619

20%

20%

17%

1%

   55 under 65

5,412,469

36,807,813

28%

20%

23%

2%

   65 and over

8,344,915

77,001,642

42%

32%

48%

6%

   Source: IRS http://www.irs.gov/pub/irs-soi/08in15ag.xls

 

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