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SALT LAKE CITY — For many people, tax day can bring feelings of anxiety at having to pay the federal and state government even more in taxes than they already have paid throughout the year, even if they're part of the elite 1 percent.
Scores of Utah taxpayers made the annual pilgrimage to their local post office Tuesday to make sure their tax envelopes had the April 17 stamp on it. While the number of online filers grows every year, according to the Internal Revenue Service, those that end up owing still send in their checks through regular mail. And for recent Salt Lake City transplant Joel Gibbs, this year was particularly challenging.
"I had five different returns to do — federal, three states and a local," he said. Having moved twice in 2011 made for quite a complicated tax situation, he said.
"I lived in two places, worked in a third state and my old home had local taxes as well," Gibbs said. Unfortunately, the result was "a net loss" as he owed more than he was refunded.
That loss is a gain for the state and federal government, which use those dollars to fund services and pay debt.
Tax statistics
According to the Utah Tax Commission, in 2009, there were slightly more than 1 million full-time resident taxpayers in Utah with an average adjusted gross income of $49,861. Nationally, the Internal Revenue Service reported more than 140 million taxpayers with an average adjusted gross income of $54,459.
IRS data indicated that for 2009 — the top 1 percent of taxpayers earned an average income of $959,959. That segment of the population paid over $318 billion in taxes — an average of 24 percent. Anyone making more than $343,927 was considered in that elite group of America's highest wage earners.
Taxpayers reporting income of $112,124 or higher were in the top 10 percent of earners in the nation.
In contrast, the bottom half showing the least income — almost 69 million tax returns — paid $19.5 billion in taxes. Their average income was $15,294 and they paid an average of 1.85 percent of their income in taxes.
According to the data, half the country's taxpayers made less than $32,396 in ’09, comprising 98 percent of all taxes paid. In comparison, the top 25 percent — who reported incomes above $66,193 — accounted for 87 percent of all taxes paid in the country, with the top 5 percent earning above $154,643, paying nearly 59 percent of all income taxes.
Changes ahead
Those figures could change significantly next year as provisions of the so-called "Bush tax cuts" are set to expire at the end of 2012.
The Bush tax cuts refers to tax cuts passed during the presidency of George W. Bush in 2001 and 2003 and were set to expire at the end of 2010. Congress passed a two-year extension that was part of a larger tax and economic package signed by President Barack Obama.
Another important change set to expire is the 2 percent payroll tax cut, which lowered Social Security withholding from 6.2 percent to 4.2 percent. For someone earning $50,000 a year, the payroll tax cut meant taking home about $1,000 more a year.
"Most likely this will be slowly phased back in," said Matt Lund, senior economist for the Utah Tax Commission."
In addition, there will be a reduction in the amount some high-income taxpayers will be allowed to take on available itemized deductions. For small-business owners, there would be a major change in the amount they could deduct for some aging equipment.
But for the typical taxpayer, the changes could mean a little less in their wallets, if the provisions are allowed to expire at year's end.
For now, many tax day filers are more concerned about making sure they meet the annual deadline, even if it was on the last day.
"I figure if I have to pay the government money, I'm going to wait till the last minute," Riverton resident Loreen Olney said with a laugh as she walked into the downtown post office branch. "(But) if I get a refund, I get it out right away."
Contributing: John Daley
