Unemployment Wages Taxable
November 10th, 2009
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Question: Is the TaxCut program right when it comes to the National average Wages, Interest, Dividends, Unemployment?
I was using TaxCut 2005 and the cost of living adjusted amounts for the most recently released stats (tax year 2003) below were presented to me:
National Average
Wages $67,182
Interest Income 1,465
Dividends 2,308
Taxable pensions and annuities 22,921
Unemployment compensation 4,981How is it there are that many people with that high of:
interest income
Dividends
and Unemployment comp?I hope there isn't someone out there with these exact amounts or there is something wrong here.
Does the taxable pensions and annuities line most likely just reflect retired people?
These figures scare me.
Answer: Those numbers do sound high. Is it possible that this is the average family income for a family that pays income taxes? I'm pretty sure it's not average income of everybody in the country, but since most very low-income people don't pay taxes,this could just be possible. For example, last year any individual making under $8200, and any married couple filing jointly making under $16,400, would not have paid income taxes, unless they were dependents of someone else, and many dependents would still not have paid tax. And for a large number of people, their social security income is not taxable. Take all of the people in those categories out of the calculation, and might be right.
Also, remember that "average" can mean numerical average (add up the numbers and divide by the number of entries, so the very rich skew the figure), median (the middle value if you line all the values up numerically - this is normally used for average wages or income), or mode (the most common, not likely what's being used here).
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New Year to bring higher unemployment tax rates
Florida's beleaguered Unemployment Compensation Trust Fund is now depleted and the state's 465,000 employers will be helping it recover when new tax rates take effect Friday.
IRS TAX TIPS: 2009 Unemployment Compensation (ASL, Captions & Audio)
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