Individual income tax returns, 2002

Statistics of Income Bulletin, Fall, 2004 by Michael Parisi, Scott Hollenbeck

Taxpayers filed 130.1 million individual income tax returns for Tax Year 2002, a slight decrease from the 130.3 million returns filed for Tax Year 2001. The adjusted gross income (AGI) reported on these returns totaled just over $6.0 trillion, a 2.2-percent drop from the previous year. This was the second consecutive year that AGI fell.

The principal cause of the decline in AGI between 2001 and 2002 was a large decline in net capital gain (less loss), which fell 26.9 percent for 2002. Taxable income also fell for 2002, declining 4.0 percent to $4.1 trillion. Taxable income fell faster than AGI because the amount of exemptions and deductions reported for 2002 increased. The decrease in taxable income, along with a second year of declining tax rates enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001, resulted in total income tax falling 10.2 percent to $797.0 billion. This was the largest percentage decrease since 1958.