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Availability
1992-2009
Universe
Persons age 15+
Codes
Description
For income tax purposes, TAXINC, or taxable income, consists of adjusted gross income (ADJGINC) minus allowable itemized deductions (or a standard allowance amount) and exemptions for the taxpayer and his or her dependents. Taxable income is the amount used in the calculation of an individual's income tax liability.
TAXINC, like other tax-related variables included in the March CPS (ADJGINC, CAPGAIN, CAPLOSS, EITCRED, FEDRETIR, FEDTAX, FICA, FILESTAT, MARGTAX, and STATETAX) was not determined by direct questioning of respondents. Rather, values for these variables come from the Census Bureau's tax model, which simulates individual tax returns to produce estimates of federal, state, and payroll taxes. The model incorporates information from non-CPS sources, such as the Internal Revenue Service's Statistics of Income series, the American Housing Survey, and the State Tax Handbook. For more information about the model, see Current Population Reports, Series P60-18RD. The IPUMS-CPS staff welcomes further information from users about the interpretation of this variable or other tax-related variables in the March CPS.
Amounts are expressed in dollars of the given year, rather than in constant dollars adjusted for inflation. Users can adjust for inflation using Consumer Price Index adjustment factors.
Comparability — General
Apart from the effects of inflation, TAXINC is largely comparable over time. Comparability may, however, be limited by changes in the Census Bureau's tax model. The Bureau implemented a new model to produce tax estimates in 2004, and the previous tax model was updated annually to account for changes in marginal tax rates.
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