Unemployment is up. The stock market is down.
We know these things to be true, but the Statistics of Income Bulletin released today by the IRS — which compares 2009 individual income tax return data to 2008 — really drives home just how much Americans are struggling in the current economic climate. Some
high low-lights include:
- In 2009, 140.5 million tax returns were filed. While I have no empirical evidence to support this, based solely on the way the past month has felt, I”m fairly confident my firm prepares each and every last one of them.
- Taxable interest was down 24.8 percent from 2008, a reflection that savings have been accessed to pay for living expenses.
- As further support for this hypothesis, deductible penalties on the early withdrawal of savings increased by 302%!
- Ordinary dividends were down 25%
- Capital gains were down a remarkable 46%, while capital gain distributions decreased 89% from 2008 to 2009.
- Rental income decreased 33.2% as reliable tenants became hard to find, and lessors were forced to lower their rental rates.
- Taxable unemployment income increased 91.5%! Keep in mind, this is after accounting for the fact that in 2009, the first $2,400 of unemployment income was tax-free.
Not all components of income were down from 2008 to 2009, however, but that doesn’t mean there was any good news to share. In 2009, taxable pension and annuity income increased by 3.1%, as many American’s were forced to access their retirement funds to weather the storm.
Scary data, certainly. What will be most telling, of course, is how 2010 ends up comparing to 2009.