My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

How Do Your Deductions Stack Up?

Contributed by mm | March 6, 2005 9:07 PM PST

Have you finished your tax return? Do you want to know how your deductions compare to your fellow Americans? RIA, a subsidiary of The Thomason Corporation, compiled some 2003 tax data recently released by IRS. Take a look at its findings.

AGI Range / % Returns Itemized / Average Deductions for Itemized Returns

$0-15k / 5.2% / $13,138
$15-30k / 15.9% / $12,775
$30-50k / 36.6% / $13,648
$50-100k / 66.1% / $17,432
$100-200k / 90.2% / $25,902
$200k+ / 93.3% / $64,835

The same report also breaks out the average deduction amount in key deduction categories. For example, for AGI range $100-200k:

- Average deduction for itemizers who claimed medical expenses: $10,515
- Average deduction for itemizers who claimed (sales/property) taxes: $10,042
- Average deduction for itemizers who claimed (charitable) contributions: $4,000
- Average deduction for itemizers who claimed (mortgage) interest: $11,350

You might notice that these numbers do not add up to $25,902, the average total deductions for the income group. That is because not all filers claim all these deductions. For example, you are only entitled to deduct your medical expenses that exceed 7.5% of your AGI, which means for people in the $100-200k income group, they need to accumulate a medical bill of $7,500 to $15,000 before they can claim medical deduction. As a matter of fact, RIA reported that only 4.59% of all returns in this income group claimed such deduction.

2003 is the last year such information is available. For 2004, the average deduction amount should grow because of the new sales tax deduction clause and continued refinancing boom in 2004.

But if the line 39 (total deduction) in your 1040 form is lower than the national average, you don't have to worry have to worry. I'm in the same boat and it's not necessarily a bad thing. My 2004 return will spell out an AGI around $120k and total deductions of about $16,000. Part of the reason why my deductions are lower is because I'm living in the state-income-tax-free State of Washington. My 1.5%-some sales tax deduction is much lower than most people with the same income pay in state income taxes where such taxes exist. If I had lived in such state in 2004, my tax return would probably show a higher deduction. But is it really good to get 25 cents back for every buck you pay out?

Be the First to Comment on this Post


Add Your Comments










Remember personal information?




(It will take a few moments for your comment to be published. Please do not close the window until then.)


Read More ... 89 Posts In The Same Category










This page was last rebuilt at February 09, 2014 08:23 AM PST. (399 Words)
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)