The are major
differences between this year’s report and previous years’ reports. In the
past, we have had considerable detail at the county level and the city level,
showing the distribution of income among other things. We have also had a
section of zip code data. Given
increasing printing costs and the ease of reporting data on the Internet in a
way that sections can be independent the Utah State Tax Commission has decided
to print a smaller edition. It is our
intent to have almost all of the omitted data available on the Internet at the
following URL:
http://www.tax.ex.state.ut.us/ESU/income/FED2000/FED200.HTM
In past years we have
published a separate volume entitled FAMILY BASED STATISTICS OF INCOME.
(See below for an explanation.) Since the volume is now smaller and also for
reasons of economy, the two volumes now appear as one.
The 2000 volume of the Utah
Statistics of Income series summarizes and analyzes tax return data
available from the Internal Revenue Service (IRS) through the federal‑state
exchange program. The data are based on those federal income tax returns
which list a Utah address and were processed by the IRS as of late August 2001.
Two different data tapes
are available from the IRS. The first, called the master file, contains
very basic information from the 1040 form, such as federal taxes, adjusted
gross income (AGI), deductions and the number of exemptions claimed. The
second source contains most of the individual tax form lines, such as detail on
deductions and sources of income. The detailed source is not updated to reflect
amendments and is not as thoroughly edited for errors as the first source.
Thus, the data are not 100 percent correct, but in most cases are reliable for
general orders of magnitude and averages. Since the two sources are not
at the same phase in processing when the state tapes are made, totals from the
two sources are generally not identical, although usually very close.
Either differences in IRS processing speed or the timeliness of taxpayers in
filing returns will cause discrepancies. This may result in slight differences
on some tables in items such as AGI, deductions, or the number of taxpayers.
The IRS's tax data
always contain information from prior‑year returns that are filed
late. We generally include prior‑year returns since their omission
would result in a serious under-reporting of the various income and tax
magnitudes. In a sense, 2000 prior‑year (1999) data is a proxy for
returns for 2000 that will be filed late. Prior‑year returns are
included as a separate "county" in the county tables and are not
included in either the city or ZIP Code data, since we believe the inclusion of
the data at the state level is reliable, but that its allocation to lower level
geographic units is questionable.
In addition to state,
county, city, and ZIP Code data on adjusted gross income, federal taxes,
exemptions, and returns by income level, this volume reports statewide data on
itemized deductions, adjustments to income, sources of income, and other
important magnitudes from federal tax schedules C through F , as well as for
various credits and tax payments.
The data on AUtahns= income@ is Adjusted Gross
Income (AGI), which is not the same concept as either the census definition or Apersonal income@. AGI includes capital
gains, which most definitions of income do not cover, and only captures a
portion of social security income and pension income. In addition, a list of
adjustments, such as IRA and Keogh plans, self employed health insurance,
moving expenses, alimony paid, etc. are subtracted to arrive at AGI. AGI also
excludes the imputed income included in personal income measures.
We are subject to the
way taxpayers fill out their forms as far as addresses are concerned. If
they use a wrong ZIP Code, we are forced to live with it. Probably the
most important error of this type is in the "city" taxpayers claim.
Some residents of the smaller communities, for example, may list Salt Lake City
as a city rather than Sandy, or Murray, for example. This also happens
for residents of unincorporated areas. Some taxpayers will also use their
professional address or post office box rather than their actual residence.
To understand what is
included in Afederal taxes,@ please consult the
attached form 1040. This figure is what is reported on the total tax line, but
self-employment taxes are not included, while alternative minimum taxes are
included as well as some other small items. Credits have been subtracted,
except the earned income tax, which is considered a payment by the IRS.
In addition, average
values are only averages for taxpayers using a particular form or line.
This
report represents an ongoing effort at the Utah State Tax Commission’s Economic
and Statistical Unit to calculate family based data from individual returns.
Since the raw data is based on tax returns and tax definitions of income, and
since the aggregation is not perfect, this data should not be expected to
conform to other sources of family or household data. This report groups
returns into larger units, such as households or families. It groups returns
that show the same last name, ZIP Code, and first part of the address into a unit,
generally a family. This method adds minors with their parents, if they use the
same name and address. It also groups a married couple living with the
husband's parents (same last name). However, it would not group a married
couple living with the wife's parents (different last names).