More On Tax Planningfrom The Advisor's Professional Library
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
- Charitable Giving Charitable giving can reduce your clients’ tax liabilities. However, the general and verification rules for the deduction of charitable gifts must be understood in order to take full tax advantage of such gifts.
Some 146 million Americans filed individual income tax returns for tax year 2011, an increase of 1.9% over the previous tax year, according to preliminary data from the winter 2013 edition of the IRS’ Statistics on Income Bulletin.
The bulletin noted increases in several items in 2011, continuing the trend from the 2010 tax year:
- Adjusted gross income rose by 3.1% to $8.3 trillion for 2011
- Taxable income grew by 4.3% to $5.7 trillion, total income tax by 9.8% to $1 trillion and total tax liability by 9.3% to $1.1 trillion
- Alternative minimum tax rose by 11.2% to $27 billion
Salaries and wages, the biggest component of AGI, grew to $6.1 trillion, an increase of 4.1% over 2010. Taxable pensions and annuities contributed $590 billion to AGI in 2011, up 4%.
Social Security benefits and taxable IRA distributions also showed increases over the 2010 tax year, up 5.3% and 12.3%, respectively.
Total statutory exemptions claimed in 2011 amounted to more than $1.1 trillion, an increase of 2.1% over 2010.
Total deductions, the sum of both standard and total itemized deductions, rose by 1.5% to $1.9 trillion. Two-thirds of taxpayers took the standard deduction, an increase of 3.3% over 2010 accounting for 40% of the total deductions amount.
Thirty-two percent of taxpayers claimed itemized deductions for 2011; these represented 60% of the total deductions amount.
The IRS noted that although its preliminary estimates were intended to represent a full year of taxpayer reporting, the 2011 data reported in the bulletin were based on returns processed between January and late September 2012.