2018 to 2017 returns comparison

[kathyc2]

Slow time around here, so I got my trivia fix and analyzed the differences on 2017 to 2018 returns. Info is from IRS stats for returns filed through July 25 of each year.

AR= all returns. HI=high income returns; AGI over 500K ETR=income tax/AGI

2017 returns filed on report is 140,456,686 and 2018 is 141,156,150; very similar.

31.7% of returns did not need to file any of Schedules 1-6. Really?

2017 AR AGI is 8,917B for an average AGI of 63,492. 2018 AR AGI is 9,367B average 66,360.

11% of AR claimed QBI for an average deduction of 5,396. 47% of HI claimed QBI for an average deduction of 54,581.

30% of AR itemized in 2017; 10% in 2018. 93% of HI itemized in 2017; 65% in 2018. This one surprised me. Guess they aren’t very charitable if they are HI and don’t benefit by itemizing.

AR Sch A taxes paid was 514B in 2017; 125B in 2018. HI claimed in 2017 74B with an average of 87K. HI 2018 was 6.6B with an average of 10K.

Total for SALT reduction was 123B. Interestingly, 30.6% of that was for returns with AGI less than 100K. Another 64.1% was for AGI between 100 and 500K, and 6.5% for HI. It would be very interesting to see this broken down by state.

AR with AMT in 2017 was 3% with average tax of 5,330. AT 2018 was .1% and average amount was 12,353. HI 2017 was 42% and average amount was 14,087. HI 2018 4% with amount of 15,565

15% of 2017 returns had child tax credit totaling 25B. 2018 had 26% claiming for a total of 76B

2017 AR total income tax was 1,139B and ETR of 12.8%. Tax dropped 71B to 1,068B in 2018 and ETR was 11.4%.

2017 HI tax was 268B, ETR 27.2%. 2018 HI tax was 270B, ETR 25.4%. Difference in higher tax is due to AGI for HI being 8% higher than 2017.

[Dude]

I found it interesting that over 50% of CA income tax revenue comes from 160,000 tax returns. CA at least seems over leveraged from a budget perspective and this will lead to what I call a Blue Recession. Blue states are very vulnerable to migration out of the state, especially when it is exasperated states (which are either next to or nearby CA) who have no state tax.

[Rapid Robert]

One thing that TCJA messes up is year to year comparisons, because it strongly encourages higher income taxpayers to bunch their itemized deductions. Many tax clients received advice for the 2017 returns to pre-pay some mortgage and property tax if they could, along with charitable, to beat some of the TCJA provisions. They may not do so again until 2019. Another thing I wonder about is the comparison of "returns filed through July 25". Isn't it possible more people are filing later this year (after July 25) due to extenders uncertainty and more TCJA confusion overall?

[kathyc2]

I had listed the number of returns filed, and it is only about 1/2 percent different. Good point about people pushing Sch A deductions to 2017.