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TATISTICS OF INCOME

Publications in Preparation

VjOrpOrftllOn income Tax Returns with accounting periods ended July 1960-June 1961, Pre- liminary

Income statement and balance sheet information, net income, income subject to tax, income tax lia- bility, distributions to stockholders. Classifications by size of total assets (selected items only) and by industrial group. Historical summary, IQSe-"^? through 1960-61. (Fall 1962)

Fiduciary, Gift, and Estate Tax Returns lUed during 1961

FIDUCIARY INCOME TAX RETURNS FOR 1960: Sources of income, deductions, exemptions, income tax, tax credits, and taxpayments. Classifications by bank and nonbank administered trusts, estates, size of total income and taxable income, tax status, typeof tax, and States. Historical data 1951-60. GIFT TAX RETURNS FOR 1960: Total gifts, exclusions, deductions, specific exemption,' and gift tax. Classifications by type of gift, size of taxable gift and total gift, tax status, recurrent donors, consent status, and States.

ESTATE TAX RETURNS: Gross estate, deductions, exemption, estate tax, tax credits, out-of-state real estate, stocks and bonds of unlisted out-of-state corporations, life insurance, and annuities. Classifications by type of property, tax status, size of gross estate and net estate before exemption, method of estate valuation, and States. Historical data 1951-61. (December 1962)

U. S. Business

Tax Returns with accounting periods ended July 1960-June 1961, Prelimi- nary

SOLE PROPRIETORSHIPS, PARTNERSHIPS, AND CORPORATIONS

Summary financial statistics from tax and information returns, covering approximately 11 million busi- nesses. Number of business organizations, receipts, depreciation, profits, and inventory. Classifica- tions by industry, size of business receipts, size of net profit, and size of total assets. (December 1962)

Individual income Tax Returns for 1961, Preliminary

Sources of income, adjusted gross income, total itemized deductions, exemptions, taxable income, income tax, tax credits, self-employment tax, tax withheld, and taxpayments, by size of income. Se- lected sources of income by States. (June 1963)

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Recent I>ublications

Corporation Income Tax Returns with accounting periods ended July 1959- June 1960 (334 pp., SI. 75) U. S. Business Tax Returns with accounting periods ended July 1959-June 1960, Sole Proprietorships,

Partnerships, and Corporations (182 pp., SI. 00) Individual Income Tax Returns lor 1959 (157 pp., $1.00)

Sales of Capital assets reported on Individual Income Tax Returns for 1959 (21 pp., 25(t) Fiduciary, Gift, and Estate Tax Returns filed during 1959 (116 pp., 70$) Farmers' Cooperative Income Tax Returns for 1953 (42 pp., 40((:)

Statistics of Income publications are for sale by the Superintendent of Documents, U. S. ijovernment Printing Office, Washington 25, D. C.

STATISTICS OF INCOME ... 1961

Individual

I INCOME TAX RETURNS

for 1961

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iioston Public Library Superintendent of Documents

FEB 14 1964

DEPOSITORY

U. S. TREASURY DEPARTMENT • INTERNAL REVENUE SERVICE

Statistics of Income

1961

Individual

INCOME TAX RETURNS

for 1961

Prepared under the direction of the Commissioner of Internal Revenue by the Statistics Division

U. S. TREASURY DEPARTMENT

Internal Revenue Service

Publication No. 79 (12-63)

INTERNAL REVENUE SERVICE

Mortimer M. Caplin, Commissioner

Bertrand M. Harding, Deputy Commissioner

William H. Smith, Assistant Commissioner (Planning and Research)

Statistics Division:

Ernest J. Engquist, Jr., Director

James M. Jarrett, Assistant Director

Thomas F. McHugh, Chief, Income, Finance, and Wealth Branch

Jack Blacksin, Statistician

UNITED STATES

government PRINTING OFFICE

WASHINGTON : 1963

For sale by the Sui)erintendent of Doeuineiits. I'.S. Government Printius Office, Washington, D.C., 2(M02 - Price ^l.2o

U. S. TREASURY DEPARTMENT

Commissione/i sj <JnhmaI /Revenue

WASHINGTON 25, D. C.

LETTER OF TRANSMITTAL

Treasury Department, Office of Commissioner of Internal Revenue,

Washington, D. C, November 21, 1963.

Hon. Douglas Dillon, Secretary of the Treasury.

Dear Mr. Secretary:

I am transmitting the Statistics of lncome-1961, Individual Income Tax Returns. This report was prepared in partial fulfillment of the requirements of section 6108 of the Internal Revenue Code of 1954, which provides that statistics be published annually with respect to the operation of the income tax laws. The statistics in this report relate to the more than 61 million individual income tax returns. Forms 1040 and 1040A, filed during calendar year 1962.

Data are shown for sources of income, excludable sick pay, total itemized deductions, exemptions, taxable income, income tax, self-employment tax, tax credits, taxpayments, and overpayments, all classified by size of adjusted gross income.

Other significant classifications include tax rates, marital status, patterns of income, types of exemptions, and States. Selected sources of income, taxable income, and income tax are presented for the 100 largest standard metropolitan statistical areas.

New statistics relating to gross rents and rent expense, interest income classified as to type of payer, and income and tax by tax rates are included in this report.

Commissioner of Internal Revenue.

CONTENTS

Page

Guide to basic and historical tables 2

Individual income tax returns for 1961 3

Number of returns, income, and taxes 3

Excludable sick pay ^

^ Dividends ^

Interest income ^

Pensions and annuities 5

Rents 7

Capital gains and losses 9

Sources not supported by Schedule B 9

Itemized nonbusiness deductions 9

Exemptions 11

Individual income tax base and tax by tax rates H

Marital status of taxpayer 11

Standard metropolitan statistical areas 11

Forms 1040A 13

Sources of data • • • 13

Description of the sample and limitations of the data 14

Explanation of classifications and terms 21

Basic tables, individual returns, 1961 31

Historical tables, individual returns, 1952-1961 1^5

Synopsi s of laws ■ •••• 186

1961 forms and instructions 190

Index •" 231

Individual

Income Tax

Returns

Guide to basic and historical tables . . .

BASIC TABLES

Table Page

No . No .

Cumulated income and tax 1 32

Sources of income and loss 2-4 34-38

Percent distribution of sources of income 5 53

Form 1040A returns 6 54

Itemized deduction returns 7 55

Size of total deductions 8 57

Patterns of income 9-11 58-66

Characteristics of returns with dividends 12 69

Types of income tax 13 74

Selected data by marital status and type of deduction 14 75

Exemptions 15 81

Capital gains and losses 16 85

State data 17-18 88-90

Standard metropolitan statistical area data 19-20 116-120

Income and tax data by tax rates 21-27 146-172

HISTORICAL TABLES

Characteristics of returns 28 176

Number of returns and adjusted gross income 29 177

Returns with income tax 30 178

Sources of income 31 180

Itemized deductions 32 180

Sources of income by income classes 33 181

State data 34 183

INDIVIDUAL INCOME TAX RETURNS FOR 1961

Income and tax statistics for 1961 presented in this report were derived from a sample of the nearly 61,500,000 individual income tax returns filed during 1962.

The comparability of income year 1961 and income year 1960 data was not significantly affected by amend- ments to the Internal Revenue Code of 1954 which were effective for years beginning after 1960.

NUMBER OF RETURNS, INCOME, AND TAXES

Chart 1 shows the 10-year trend of returns in three broad income size classes. Of the 61,500,000 returns for 1961, 34,707,000 (56.4 percent) showed income under $5,000, 20,784,000 (33.8 percent) showed income $5,000 under $10,000, and 6,009,000 (9.8 percent) showed income $10,000 or more.

Returns with income under $5,000 were 736,000 fewer than for 1960, continuing the downward trend evident for the past few years. Returns with income $5,000 under $10,000 increased by 518,000 over 1960, and returns with income $10,000 or more increased by 690,000.

Table A indicates the amount of change in the major sources of income, taxable income, and taxes for 1961. Net adjusted gross income increased to another all time high of $329,861,284,000, an amount which was $14,394,902,000 more than for 1960. Net gains from sales of capital assets, amounting to $7,620,794,000, showed the greatest percentage increase of any major source of income, 43.8 percent higher than for 1960. Interest received of $5,683,167,000 was 12.4 percent above the amount for 1960.

Table A. —NUMBER OF RETURNS, INCOME, AND TAXES: 1961 AND 1960

Chart 1. -NUMBER OF RETURNS BY SIZE OF ADJUSTED GROSS 1952-1961

NCOME

Millions 70

Retu:

Tna under J5

»10,

000

Returns $10. 000 or more

1952 1953 1954 1955 1956 1957 1958 1959 1960 1961

Item	1961	1960	Increase or decrease (-), 1961 over 1960
	(1)	(2)	(3)
	61,499,420 48,582,765 12,916,655	61,027,931 48,060,985 12,966,946	471,489
	521,780
	-50,291

	(Mitllon dollmra)
Adjusted gross income (less deficit) Sources of -income: Salaries and wages (net) Business and profession net profit and	329,861 266,902 22,630 9,890 8,949 7,621 5,683 2,759 1,114 746 629 505 2,434 181,780 42,225 840	315,466 257,918 21,072 9,530 3,966 5,300 5,057 2,728 962 655 635 584 2,060 171,628 39,464 834	14,395 8,984 1,558
	360
Partnership net profit and loss Net gain and loss from sales of capital	-17 2,321
	626
Rent net income and loss Pensions and annuities: Life expectancy method	31 152 91
Net income and loss from estates and	-6
Royalty net income and loss	-79 373
	10,152
Income tax after credits	2,761 6

NOTE: Details may not add because of rounding.

Taxable income of $181,779,732,000 was $10,151,961,- 000 higher than for 1960. There were 48,583,000 taxable returns with total tax liability of $42,225,498,000 for 1961, an increase of 522,000 returns and $2,761,342,000 liability over corresponding figures for 1960. Nontax- able returns numbered 12,917,000 for 1961, a decrease of 50,000 returns from 1960.

The self-employment tax on net earnings from self- employment increased to $840,149,000 for 1961, less than 1 percent above 1960. There was no change in the self-employment tax rate of 4-1/2 percent.

Chart i -COMPONENTS OF ADJUSTED GROSS INCOME, 1961 19.1%
X / Salaries y^^ \ income and y^ ,0 ,,5 from wages V ^^-'^ Other \ 80.9% ^V / Sources N	Business profit 6.9%
Dividends 3.0%
Partnership profit 2.7%
Sale of capital assets 2.3%
Interest 1.7%
Other Income 2.5%
ADJUSTED GROSS INCOME (net) $329. 861, 284. 000

INDIVIDUAL INCOME TAX RETURNS FOR 1961

Table B.— SOURCES OF INCOME AS A PERCENT OF ADJUSTED GROSS INCOME FOR

ALL RETURNS AND THREE ADJUSTED GROSS INCOME CLASSES

[Taxable and nontaxable returns]

	Percent of adjuffted gross Income
	All returns	Size of adjusted gross income
Sources	Under $5,000	$5,000 under $10,000	$10,000 or more
	(1)	(2)	(3)	(*)
Adjusted gross Income (less deficit)	100.0	100.0	100.0	100,0
	80.9 6.9 3.0 2.7 2.3 1.7 0.8 0.3 0.2 0.2 0.2 0.7	85.3 6.2 1.2 0.8 1.0 2.1 1.2 0.8 0.5 0.1 0.1 0.7	90.4 U.I. 0.9 1.2 0.6 1.0 0.4 0.2 0.1 0.1 0.1 0.5	63.8
Business and profession net profit and

Partnership net profit and loss Net gain and loss from sales of capital	6.4 5.8
	2.4

Pensions and annuities:
	0.1
Net income and loss from estates and	0.4
Royalty net income and loss	0.3 1.1

NOTE: Detail may not add to total because of rounding.

Chart 2 shows the proportion of adjusted gross income for 1961 attributable to each major source of income. In table B, each source of income is shown as a percent- age of adjusted gross income for all returns and for returns in three broad income classes.

Table C . —EXCLUDABLE SICK PAY BY ADJUSTED GROSS INCOME CLASSES

Adjusted gross Income classes

Grand total

Taxable retumB, total

$600 under $1.000

$1,000 under $1,500

$1,500 under $2,000

$2,000 under $2,500

$2,500 under $3,000

$3,000 under $3,500

$3,500 under $4,000

$4,000 under $4,500

$4,500 under $5,000

$5,000 under $6,000

$6,000 under $7,000

$7,000 under $8,000

$8,000 under $9,000

$9,000 under $10,000

$10,000 under $11,000

$11,000 under $12,000

$12,000 under $13,000

$13,000 under $14,000

$14,000 under $15,000

$15,000 under $20,000

$20,000 under $25,000

$25,000 under $50,000

$50,000 under $100,000

$100,000 under $150,000....

$150,000 under $200,000

$200,000 under $500,000

$500,000 under $1,000,000.. $1,000,000 or more

hton taxable returns, total,.., No adjusted gross income...

Under $600

$600 under $1,000

$1,000 under $1,500

$1,500 under $2,000

$2,000 under $2,500

$2,500 under $3,000

$3,000 under $3,500

$3,500 under $4,000

$4,000 under $4,500

$4,500 under $5,000

$5,000 or more

Returns under $5,000

Returns $5,000 under $10,000, RetumB $10,000 or more

Returns with excludable sick pay

Number of returns

(1)

1,637,073

1,552,636

3,768

9,606

14,163

21,763

34,689 53,627 71,683 80,461 100,496

209,770 201,034 171,458 142,514

117,753

88,234 63,498 44,209 29,342

19,415

39,565 13,665 16,667 4,035 723

208

246

2,965

10,798 6,828 5,774 7,990 8,^6

11,802 4,711 6,960 4,276 5,340 8,847

465,846 851,171 320,056

Salaries and

wages (net)

(Thaummtd

dotlmrt)

(2)

11,763,801

11,547,498

2,979 11,522 23,492

47,970

93,210 170,123 261,139 334,805 464,866

1,119,692 1,262,945

1,249,184 1,175,999 1,088,596

894,838 699,934 521,958 371,600 260,528

590,351 243,306 408,803 164,379 48,462

13,720

19,677

2,518

902

216,303

355

2,904 4,227 6,770 14,175 17,227

31,756 16,289 25,241 16,406 25,754 55,199

1,571,210 5,949,629 4,242,962

Excludable sick pay

dollmraj

(3)

755,604

651,699

1,402

3,921

9,224

10,684

17,621 26,327 36,462 34,m 44,343

88,946 79,851 59,653 55,537 46,789

33,789 24,640 17.342 11,977 8,064

18,670 8,133

10,038

3,299

454

189 194

103,905

6,409

17,695

10,436

5,934

8,611

13,555

12,420 4,772 6,482 3,068 5,796 8,727

279,273 339,297 137,034

EXCLUDABLE SICK PAY

Wage earners who received compensation for periods of absence from work because of sickness or injury were permitted to deduct an amount of sick pay from gross salaries and wages received. When covered by an employer provided wage continuation plan, the em- ployee was allowed a deduction, not to exceed $100 a week, for sick pay received in lieu of wages. Sick pay could be deducted only on Form 1040.

Table C shows that excludable sick pay was reported on 1,637,000 returns for 1961, about the same number as for 1960. The amount of excludable sick pay deducted for 1961 was $755,604,000, over 6 percent of the $12,519,405,000 gross salaries and wages from which it was deducted.

DIVIDENDS

Individuals reported total domestic and foreign divi- dends of $10,281,918,000 of which $9,889,743,000 was included in adjusted gross income. Dividend figures are understated because of two factors. (1) Salary and wage earners filing Form 1040 with not more than $200 of dividends and interest did not have to file a separate schedule and itemize the sources and amounts of divi- dends and interest. Any amounts of dividends (after exclusions) and interest on these returns were not identifiable as such, and are included in a new item tabulated for 1961, "sources not supported by Schedule B." Table 2 shows that this item amounted to $601,756,000. (2) Dividends in "other income" on Forms 1040A could not be identified.

Dividend exclusions from gross- income totaled $392,175,000 and the tax credit for dividends received amounted to $320,267,000.

Over 76 percent, $7,566,524,000, of the dividends in adjusted gross income were reported by individuals with income $10,000 or more.

Table D shows the frequency and amount of dividends in adjusted gross income, total dividends received, dividends eligible and not eligible for exclusion, divi- dend exclusions, dividends eligible for tax credit, and dividend tax credit, compiled from returns which had dividend receipts shown separately on Schedule B of Form 1040. Taxpayers who did not need to report their dividends separately on Schedule B were still allowed the dividend tax credit. Dividend tax credits amounting to $4,529,000 were shown on 95,000 Form 1040 returns of taxpayers who did not report their dividends separately.

INTEREST INCOME

Interest received totaling $5,683,167,000 was reported on 10,032,000 Form 1040 returns for 1961. This year, for the first time, interest received by individuals was classified according to the type of payer of that interest.

Table E shows the frequency and amount of interest received from six specific sources and one category of "Other payers." These types of payers of interest are described below.

Banks. --Over 29 percent, or $1,658,264,000, of the total interest received was from banks, which included

INDIVIDUAL INCOME TAX RETURNS FOR 1961

Table D.— FORM 1040 RETURNS WITH DIVIDENDS TAX	IN SCHEDULE B: DIVIDENDS ELIGIBLE CREDIT FOR DIVIDENDS RECEIVED, BY	AND INELIGIBLE FOR EXCLUSION, DIVIDENDS ELIGIBLE FOR ADJUSTED GROSS INCOME CLASSES	TAX CREDIT, AND
	Dividends (after excluyions)	Domestic and foreign dividends received	Dividend exclusions from gi-oss income	Dividends eligible for tax credit	Tax credit for dividends recei.ed'
	Total	Not eligible for exclusions	Eligible for exclusions
	Number of returns	Amount dotlmrwj	Number of returns	Amount rTTMWMnrf dolUr,}	Number of returns	Amount rTTwMMd dotlTM)	Number of returns	Amount	Number of returns	Amount dotUrt)	Number of returns	Amount fThoBCaiMJ dollmtm)	Number oi returns	Amount
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)	(14)
Grand total	5,037,615	9,889,743	6.370,720	10,281.918	650,179	229,700	6,223,781	10,052,218	6,201,629	392,175	4,801,382	9,660,043	3,638,559	320,267
Taxable returns, total	4,368,591	9,313,657	5,553,291	9,660,620	565,498	214,108	5,444,133'	9,446,512	5,430,091	346,963	4,180,284	9,099,549	3,555,973	318,549
	30,672 55,763 77,569 93,127 118,123 128,653 126,713 151,976 163,272 315,473 334,758 315,727 279,580 253,826 225,739 192,652 171,970 139,126 120,736 393,761 204,628 351,325 95,505 15,588 5,166 5,846 948 369 669,024	12,457 27,725 45,790 49,231 80,212 99,156 99,529 107,937 108,078 249,265 252,023 246,986 235,333 251,934 225,972 220,215 212,835 193,497 173,657 790,044 599,693 1,828,861 1,311,215 530,095 291,172 594,702 216,469 259, 574 576,086	34,712 64,498 89,150 109,922 145,173 155,143 165,473 191,058 206,541 417,025 452,098 438,760 379,543 342,061 311,938 264,331 228,584 180,176 152,281 476,826 234,492 385,897 99,281 15,908 5,206 5,890 953 371 817,429	14,027 30,626 49,970 54,445 87,475 107,213 108,195 117,600 119,240 271,793 277,696 272,358 258,378 273, 586 245,933 237,503 228,346 205,905 184,416 824,919 617,514 1,859,514 1,319,532 531,453 291,620 595,209 216,550 259,604 621,298	3,192 6,812 9,164 12,143 11,659 13,178 15,320 22,216 18,766 42,910 40,714 36,102 29,811 35,278 26,283 23,227 20,039 17,273 13,785 48,729 26,544 58,314 23,797 5,212 1,899 2,512 449 170 84,681	323 1,515 1,316 2,164 693 1,911 3,034 3,187 2,146 6,403 4,656 5,705 4,354 6,613 4,972 4,982 5,147 5,034 4,654 17,193 12,971 42,029 34,178 14,355 5,407 12,893 3,289 2,984 15,592	33,868 62,132 86,283 105,479 141,329 150,018 161,482 182,568 201,171 403,843 438, UO 428,978 375,329 335,727 306,746 260,394 225,460 177,969 150,448 472,851 233,132 383,720 98, 838 15,865 5,192 5,877 953 371 779,648	13,704 29,111 48,654 52,2a 86,782 105,302 105,161 114,413 117,094 265,390 273,040 266,653 254,024 266,973 240,961 232,521 223,199 200,871 179,762 807,726 604,543 1,817,485 1,285,354 517,098 286,213 582,316 a3.261 256,620 605,706	33,868 61,695 86,079 104,503 141,023 149,713 161,045 182,364 200,453 401,921 436,463 427,631 374, 892 334,672 306,067 259,581 225,054 177,630 150,177 472,105 232,997 383,180 98,731 15,861 5,189 5,873 953 371 771,538	1,570 2,901 4,180 5,214 7,263 8,057 8,666 9,663 11,162 22,528 25,673 25,372 23,045 21,652 19,961 17,288 15, 5U 12,408 10,759 34,875 17,821 30,653 8,317 1,358 448 507 81 30 45,212	29,828 52,757 74,061 86,464 112,560 121,912 120,604 139,439 153,763 294,011 314,363 297,872 269,547 241,492 215,259 184,372 165,750 134,343 116,800 384,444 201,333 346,769 94,760 15,492 5,145 5,827 948 369 6a, 098	12,134 26,210 44,474 47,067 79,519 97,245 96,495 104,750 105,932 242,862 247,367 241,281 230,979 245,321 221,000 215,233 207,688 188,463 169,003 772,851 586.722 1,786,832 1,277,037 515,740 285,765 581,809 a3,180 256,590 560,494	22,099 42,031 59,521 62,565 90,560 97,200 97,832 112,618 126,072 233,690 256,413 239,673 222,009 207,429 179,690 154,225 143,638 116,201 103,404 343,277 187,340 332,566 93,137 15.355 5,121 5,794 945 3o8 82,581	125
	504
	875


43 000 under t3 500	2,472
	2,732

	3 318

	8 212

	8 105

$10,000 unijer $11,000 $11,000 under $12,000 $12,000 under $13,000 $13,000 under $14,000 $14,000 under $15,000 $15,000 under $20,000 $20,000 under $25,000 $25,000 under $50,000 $50,000 under $100,000 $100,000 under $150,000 $150,000 under $200,000 $200,000 under $500,000 $500,000 under $1,000,000 $1 000 000 or more	7,831 7.800 7,434 6,857 6,113 28,243 21.437 65,236 47,390 18,668 10,199 19,719 6,735 8 162
Nontaxable returns, total	1,713
No adjusted gross income	33,144 53, 310 89,612 127,085 109,100 74,130 59,898 46,302 19,907 15,116 11,964 29,456	45,034 12,621 31,907 57,774 58,435 51,789 46,457 45,505 18,506 19,974 16,344 171,740	44,436 70,274 106,231 151,007 133, 590 89,874 72,194 54,383 25,846 19,528 15,198 34,868	47,428 15.945 37,102 65,437 65,630 57,026 50,808 49,065 20,219 21,214 17,323 174,101	5,964 6,758 8,336 15,651 12,324 11,611 5,736 5,988 ih 2,054 4,909	1,592 706 1,165 2,816 912 1,970 991 915 (^) 325 {') 3,733	41,186 65,687 102,051 142,483 128,105 84,617 69,926 52,228 25,127 18,888 14,994 34,356	45,836 15,239 35,937 62,6a 64,718 55,056 49,817 48,150 19,953 20,889 17,122 170,368	40,948 65,216 100,536 140,399 125,452 84,312 69,590 52,024 25,127 18,888 14,994 34,052	2,394 3,324 5,195 7,663 7,195 5,237 4,351 3,560 1,713 1,240 979 2,361	29,386 47,412 84,815 116,813 102,303 67, 592 56,317 43, 374 19, 320 14,271 11,324 28,171	43,442 11,915 30,742 54,958 57, 523 49, 819 45,466 44,590 18,240 19,649 16,143 168,007	15,806 15,363 14,100 12,066 4,239 5,706 4,402 5,019	-
4600 mider tl 000	(')

4l 500 under i2 000	211
$2 000 under $2 500	313
	306
43 000 under 43 500	315

4i 000 under 4^ 500

	185

Returns under $5,000 Returns $5,000 under $10,000... Returns $10,000 or more	1,585,436 1,522,540 1,929,639	1,034,461 1,288,758 7, 566, 524	1,944,231 2,057,794 2,368,695	1,135,988 1,408,937 7.736,993	192,222 188,855 269,102	28,148 29,288 172,264	1,869,622 2,009,856 2,344,303	1,107,840 1,379,649 7,564,729	1,858,229 2,003,144 2,340,256	101,527 120,179 170,469	1,484,315 1,439,252 1,877.315	1,006,313 1,259,470 7,394,260	768,060 1,163,721 1,686,778	17,669 40,699 261,399

See text for "Description of the Sample and Limitations of the Data" and "Explanation of Classifications and Terms."

^The estimates in these columns have been revised from those shown in table B of the Preliminary Report, Statistics of Income-1961, Individual Income Tax Returns.

^Estimate is not shown separately because of high sampling variability. However, the data are included in the appropriate totals.

national banks, State banks, savings banks, mutual savings banks, and trust companies.

Savings institutions. --Another 20 percent of interest received, $1,154,828,000, was from savings and loan associations, building and loan associations, cooperative banks, homestead associations, and credit unions.

Other financial institutions. --Three percent, or $172,755,000, of interest was from industrial loan companies, finance companies, bond and mortgage com- panies, and from security brokers and dealers.

Insurance companies. --About 1.7 percent, or $98,900,000 of interest was received from private insurance companies.

Nonfinancial business and individuals. --The largest portion of interest received, 31.2 percent ($1,774,409,- 000), was from corporate and non-corporate businesses not engaged in financial operations, and from individuals.

Federal Government. --Individuals reported$655,076,- 000, or 11.5 percent of the total, of interest from U. S. Government obligations such as Treasury bills, notes, certificates, bonds, postal savings accounts, and Federal tax refunds.

Other payers. --The remaining three percent of interest received, $168,935,000, was from sources not elsewhere classified or not specifically stated. This amount also included a small amount of income which was erroneously reported as interest.

PENSIONS AND ANNUITIES

Pension and annuity income amounting to $ 1 ,860, 193,000 was included in adjusted gross income for 1961. Pensions and annuities were reported under two methods on Form 1040: the general rule, referred to as the life expect- ancy method, and the 3-year method. An explanation of how taxpayers report income under these methods is explained on page 24.

Table F shows that there were 856,000 returns with $1,114,271,000 of pensions and annuities in adjusted gross income under the life expectancy method. Under this method, cost of $187,482,000 was excluded on 297,000 returns. Most of the individuals reporting income under the life expectancy method did not contri- bute to the cost of the pension or annuity, and thereby

INDIVIDUAL INCOME TAX RETURNS FOR 1961

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