Itemized Deductions

3463 Words Apr 29th, 2014 14 Pages
Itemized Tax Deductions for Individuals: Data Analysis
Sean Lowry Analyst in Public Finance February 12, 2014

Congressional Research Service 7-5700 www.crs.gov R43012

CRS Report for Congress
Prepared for Members and Committees of Congress

Itemized Tax Deductions for Individuals: Data Analysis

Summary
Reforming or limiting itemized tax deductions for individuals has gained the interest of policymakers as one way to increase federal tax revenue, increase the share of taxes paid by higher-income tax filers, simplify the tax code, or reduce incentives that might lead to inefficient economic behavior. However, limits on deductions could cause adverse economic effects or changes in the distributional burden of the federal income
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However, certain combinations of deduction limits may shift some tax filers to claim the standard deduction instead of itemizing. In this case, the revenue increase by limiting itemized deduction would be partially offset by more tax filers claiming the standard deduction.

Congressional Research Service

Itemized Tax Deductions for Individuals: Data Analysis

Contents
Introduction...................................................................................................................................... 1 An Overview of Itemized Tax Deductions ...................................................................................... 1 Analysis of Tax Data........................................................................................................................ 2 Who Claims Itemized Tax Deductions? .................................................................................... 2 Analysis of Selected Deductions ............................................................................................... 4 Which Itemized Deductions Contribute Most to Revenue Loss? .................................................... 7 Policy Implications .......................................................................................................................... 8

Figures
Figure 1. Shares of Tax Itemizers and Itemized Deductions Claimed, by Adjusted Gross Income (AGI),
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