For 2004 taxpayers filed 1324 million U individual income tax turn backs an increase of 1.

For 2004 taxpayers filed 1324 million U individual income tax turn backs an increase of 1.4 percent from the 1306 million turn backs filed for 2003. For the next to the first consecutive year, Adjusted Gross Income (AGI) rose increasing through 8.9 percent to $6.8 trillion for 2004 Tax Year 2004 had several other notable changes. Taxable income increased 106 percent to $46 trillion, and alternative minimum tax rose 381 percent to $121 billion. Total income tax, which declined for 2003 increased for 2004 through 10.7 percent to $830.4 billion, and total tax liability rose through 10.5 percent to $870.3 billion.

Figure A displays that the largest component of AGI, salaries and wages, increased 60 percent to $49779 billion for Tax Year 2004 while the nearest largest component of AGI, unadulterated capital gains, rose by 532 percent to $4421 billion. Other income items with notable percentage changes included capital gain distributions (part of trap capital gains), which more than tripled from $47 billion for 2003 to $153 billion for 2004 partnership pure income, which increased by 180 percent to $3555 billion, and dividends, which increased 221 percent to $1354 billion. Of this dividend total, about 756 percent were reported as qualified dividends. Qualified dividends, which receive preferential tax rates, were reported onward 24.5 million returns and totaled $1023 billion, an increase of 292 percent For 2004 taxable pensions and annuities, the third largest income item, rose 55 percent to $3993 billion. The other items related to retirement, taxable IRA distributions and taxable Social Security benefits, also rose for 2004 by means of 15.1 percent and 12.8 percent respectively. Declining income items were l at unemployment compensation at $32.7 billion, falling by dint of 25.9 percent from its 2003 even Both taxable interest and State income tax restores also decreased (3.6 percent and 31 percent respectively) from Tax Year 2003

Statutory adjustments to total income increased 110 percent to $945 billion for Tax Year 2004 The largest statutory adjustment was the deduction for self-employment tax, representing 213 percent of the total. This adjustment to income increased 61 percent to $201 billion. Payments to self-employ retirement (Keogh) plans rose 64 percent to $180 billion, while deductible contributions to an Individual Retirement Arrangement (IRA) increased 07 percent to $102 billion. The deduction for tuition and pays increased 58.5 percent to $107 billion and mirrors an increase in the maximum adjustment allowed from $3000 to $4000 and an expansion of the AGI limitation for taking this adjustment (see Changes in Law section for details). Tax Year 2004 law changes also added line item adjustments to income for taxpayers who contributed to a health savings account and certain costs for members of the National Guard or set by members (see Changes in Law section for details). throughout 88,000 taxpayers made payments to a qualified health savings account allowing for an adjustment of $02 billion. Combining these just discovered accounts with the remaining medical savings accounts, the total number of individual taxpayers taking advantage of medical accounts increased by way of 87.5 percent with adjustments more than double those taken for just medical savings accounts for 2003

Total deductions, the compendium of the standard deductions and total itemized deductions (after limitation), equaled $15363 billion, an increase of 67 percent from Tax Year 2003 The number of replys claiming the standard deductions decreased 06 percent accounting for 637 percent of all answers filed and 36.7 percent of the total deductions amount. chiefly due to inflation indexing, the average standard deduction (comprised of the basic and additional standard deductions) increased 17 percent from $6579 for 2003 to $6690 for 2004 Itemized deductions were claimed onward 34.9 percent of all get backs filed for 2004 and showed 63.3 percent of the total deductions amount [1] The average total for itemized deductions (after limitation) was $21038 a 48-percent increase from the 2003 average of $20076 owing to the AGI limitation onward itemized deductions, 5.7 million higher-income taxpayers were unable to withdraw $34.9 billion in itemized deductions, an increase of 246 percent from 2003 The taxes paid deduction was the largest deduction, comprising 356 percent of total itemized deductions (before limitation). For 2004 it increased 165 percent to $3579 billion. This increase was partially owing to a change in law that allowed taxpayers to pitch upon whether to deduct State and local general sales taxes instead of State and local income taxes (see Changes in Law section for details). This allowed individuals in States without income taxes to withdraw sales taxes. An estimated 111 million taxpayers took advantage of this, deducting $173 billion. Thus, for 2004 more [i]or[/i] less 24.0 percent more taxpayers took a deduction for State and local taxes, and the total amount of this deduction increased 202 percent The interest paid deduction, accounting for 344 percent of the total (before limitation), increased 42 percent to $3459 billion. The charitable contributions deduction increased 118 percent to $1562 billion.