Income Tax Statistics

Taxes are stressful for everyone. Taxpayers worry that they’ve paid too much by missing key deductions or they’ve paid too little and will face audits and penalties.

Income Tax Stats - Editor’s Choice for 2025

• More than half of Americans feel that they pay the right amount of taxes.
• Around 40% of US households don’t pay federal income taxes.
• Electronically filed tax returns have an error rate of only 1%.
• The top 1% of American taxpayers pay more income taxes than the bottom 90%.
• Tax evasion costs the United States $1 trillion per year.

The federal tax code is more than 10 million words long.

(Tax Foundation)

The tax code consists of two parts: the 2,412,000-word Internal Revenue Code and federal tax regulations that add 7,655,000 words. And that’s not counting the substantial body of tax-related law that goes hand-in-hand with the code.

44% of taxpayers say they worry about the complexity of the tax system.

(Pew Research Center)

Among Americans who earn more than $100,000, 55% say they find the tax system too complex. Concern drops to 33% among those who earn $30,000 or less.

72% of low-income Americans don’t know that they are entitled to free tax-filing services.

(United Way)

Most Americans are unaware of MyFreeTaxes.com, a United Way website that prepares and files taxes for anyone who earns less than $66,000. The site handles both state and federal taxes, no matter how complex, free of charge.

Surveys show that half of Americans earning $62,000 or less per year do their own taxes, and 29% pay someone else to do them, or use tax-filing software. Only 40% of respondents knew about the child tax credit, while fewer than six in 10 knew about the earned income tax credit.

Although respondents typically received smaller tax refunds than they were entitled to, half reported that they don’t find tax preparation stressful. Maybe ignorance really is bliss.

Electronically filed tax returns have an error rate of only 1%.

(The Motley Fool)

The data shows that most tax returns are filed electronically. On result is that returns have fewer errors. According to the IRS, the error rate for paper returns is 21%.

75% of American taxpayers expected a tax refund in 2024.

(Credit Karma)

27% of those expected their refunds to be larger than the year before.

58% of people believe the U.S. Government should completely change the tax system.

(Pew Research Center)

Members of both major parties seem to be in favor of a complete overhaul, except that Republicans want it more (66%) compared to Democrats (48%).

The top 1% of American taxpayers pay more income taxes than the bottom 90%.

(Bloomberg)

The rich pay most of the taxes. Overall, the top 1% of taxpayers contributed 42.3% of the government’s income tax haul.

American families earning less than $100,000 per year have seen their risk of a tax audit risk rise by 17% since 2010.

(Forbes)

In recent years, there’s been a greater number of tax audits for families that are not high earners. At the same time, Americans who earn more than $100,000 saw an 8% reduction in tax audits.

One explanation is that low earners are more likely to prepare their own returns and make innocent errors. Those who earn higher salaries are more likely to have their returns prepared by tax professionals who make fewer errors.

Higher earners are more likely to claim the self-employment tax credit.

(Small Business Trends)

The self-employed are subject to taxes that employees don’t pay, but they also enjoy numerous deductions. IRS figures are based on the number of people who take the self-employment tax deduction each year on their tax returns.

It is conceivable that some eligible people choose not to take the deduction and the actual number of self-employed taxpayers is even higher.

72% of tax returns that include income from sole proprietorships, S corporations, LLCs, and partnerships show business income of $100,000 or less.

(Tax Foundation)

Profits of “pass-through” businesses are added to the owner’s tax return as income for purposes of calculating taxes. These businesses contribute only about 14% of U.S. total business income.

In 2023, there were 161 million taxpayers in the United States.

(Tax Foundation)

This is a slight drop from 163 million individual tax returns filed in 2021.

40.1% of households in America don’t pay federal income taxes.

(Statista)

The same data showed that 47.1% households in the $40,000-50,000 income bracket paid no individual income taxes.

Tax evasion costs the United States around $1 trillion per year.

(U.S. Internal Revenue Service)

The IRS refers to the lost funds as a “tax gap” and tries to deal with it through enforcement activities. 

The IRS spends only 34 cents for every $100 of tax collected.

(U.S. Internal Revenue Service)

The IRS is extremely efficient at collecting tax revenues, according to the most recent data.

53% of Americans feel that they pay the right amount of taxes.

(Pew Research Center)

While more than half of taxpayers believe they are not getting ripped off by the government, 40% feel they’re paying too much. About 4% of taxpayers believe they’re  paying less than their fair share.

The US collected $306 billion in individual income taxes in 2024.

(FiscalData)

This was 49% of the total tax revenue, which amounted to $629 billion.

Total tax refunds in 2024 amounted to $245 billion.

(CNBC)

The number represents a 3.6% increase compared to the year before.