About the Data
Internal Revenue Service County Income Data
The IRS county income series are based upon income tax returns from the Internal Revenue Service's Individual Master File (IMF). The IRS's Individual Master File includes a record for every Form 1040, 1040A, and 1040EZ individual income tax returns filed by citizens and resident aliens with the Internal Revenue Service. This compilation is produced by the Statistics of Income (SoI) Division within IRS.
The year indicated is the calendar year the return was filed (covering income earned during the previous year). The county designated reflects the county recorded by the taxpayer on his/her return as the county of residence.
Data for filing year 2008 includes returns that were filed by individuals only to receive the economic stimulus payment and who had no other reason to file. This means that the 2008 filing year had an usually large number of returns filed, thereby increasing the overall dollars reported. Because those filing only to receive the economic stimulus payment were concentrated in the lower income brackets, this also tended to lower average amounts per return.
The county level series includes all returns filed during the period January through September each year. Thus, coverage is not complete because the counts exclude those returns which are filed during the last quarter, October to December, of each year. The vast majority of tax returns, however, are filed during the first nine months of each year. The data represent actual counts; the SOI Division does not make any adjustments in their series for returns filed during the last quarter.
The SoI Division of IRS does not publish data on those rare occasions where a county has 10 or fewer returns filed in a given year, or 10 or fewer returns report that particular source of income. When data were not present for a particular county for this reason, no value is shown that year. If in the most recent year suppression occurred, the county itself will not be listed.
The income items included from these individual federal income tax returns are: adjusted gross income, total wages and salaries, gross dividends, total interest income, and gross rents and royalties. Amounts reflect what taxpayers reported, and do not include any adjustments proposed after IRS audits a return. The adjusted gross income is a tax-defined concept of total income, and excludes tax exempt income sources such as tax-exempt interest and the nontaxable portion of social security. It is possible for a taxpayer's adjusted gross income to be negative, when investment losses are larger than total positive income sources.
Total exemptions claimed are also recorded. This figure counts the number of individuals included on the return -- taxpayer, spouse (when a joint return is being filed), and other dependents claimed.
TRAC calculated the average amounts by dividing these aggregate money and exemption count totals by the total number of returns recorded as filed.
The Internal Revenue Service does not include aggregate totals for the United States within this series -- only data for states and counties are currently available. The IRS, however, does publish information on the United States in its quarterly Statistics of Income Bulletin. However, differences exist in the methodology for these United States estimates with those used for the county income series. The SoI Master File estimates for the United States are based upon the entire twelve month filing period, not merely the first nine months of the year - the basis for the county level estimates. Further, the same items are not consistently available from these different sources. Significant differences exist among which return items are tracked by these separate IRS information products.
An additional complication is that the Statistics of Income actually derives two separate estimates for the United States -- one based upon a statistical sample and the second based upon the complete Individual Master File. Because of these methodological differences, IRS published U.S. estimates do not entirely agree.
After consultation with the SoI Division, TRAC based its United States figures for adjusted gross income and wages and salaries (as well as return counts to calculate these per return values) on the figures SoI publishes, derived from the IRS Individual Master File. All other U.S. totals were based upon a sum of the state totals from the county income series. U.S. averages for these latter items used the comparable sum of the return counts from the county income series.