The recession A recession is a significant and sustained decline in the economy. The pandemic-related downturn and relief programs both affect the 2020 data. Pandemic-Related Downturn and Relief Programs The result overstates the tax burden of the bottom half of taxpayers. S as spending, the IRS does not include it in tax share figures. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. Source: IRS, Statistics of Income, ”Individual Income Rates and Tax Shares.”īecause the Office of Management and Budget (OMB) classifies the refundable part of tax credit A tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. Summary of Federal Income Tax Data, Tax Year 2020 The average individual income tax rate inched up slightly from 13.29 percent in 2019 to 13.63 percent in 2020. Total income taxes paid rose by $129 billion to $1.7 trillion, an 8 percent increase above 2019. Taxpayers reported more than $12.5 trillion in AGI on 157.5 million tax returns in 2020, an increase of $650 million in AGI and 9.3 million in returns above 2019. Reported Income and Taxes Paid Increased in Tax Year 2020
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