Revealed: The average American’s taxable income, and why it could fall in 2017
Are you living up to the average American’s standard of living?
Already, millions of Americans are starting to file their tax returns, hoping to get refunds back from the IRS as early as possible. One of the last steps in your tax preparation is calculating your taxable income, from which you’ll determine your final tax bill. The federal government regularly releases data on American taxpayers on a delayed basis, and its most recent numbers show quite clearly what the average American taxpayer’s taxable income is. Yet there’s reason to believe that if proposed tax reforms become law, some taxpayers could see that number drop, leading to possible tax savings.
What’s the average American’s taxable income?
More than 112 million American households reported their taxable income on their tax returns during 2014, the most recent year for which the IRS has released data. In total, the numbers they reported on their 1040 tax returns added up to almost $7 trillion in taxable income. When you do the math using the precise figures that the federal government released, the average American household reported taxable income of $62,116.
There are a couple things to note with respect to this number. First, it represents taxable households rather than individual Americans, because couples who file jointly will combine their income on a single return. When you take into account the tens of millions of joint returns that got filed and adjust accordingly, the estimate for the average American’s taxable income goes down to $45,575.
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