TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, February 24, 2009

Income Tax Data by Zip Code

The Data Research Group has launched Income Tax List, which allows you to search IRS income and tax data by zip code.  The site also contains various lists, including:

The five richest zip codes with the highest average incomes:

  1. New York, NY 10153:  $6,937,350 (31 returns)
  2. New York, NY 10152:  $5,026,410 (29 returns)
  3. New York, NY 10274:  $4,706,260 (366 returns)
  4. New York, NY 10179:  $3,172,930 (27 returns)
  5. Miami Beach, FL 33109 $2,483,880  (259 returns)

(For what it's worth, Beverly Hill 90210 ranked 74th, with an average income of $499,050 with 10,497 returns.)

The five poorest zip codes with the lowest average incomes:

  1. New York, NY 10105:  -$182,290 (318 returns)
  2. Tennessee Colony, TX 75880:  $430 (21 returns)
  3. Gatesville, TX 76598:  $870 (23 returns)
  4. Allenton, MO 63001:  $1,250 (24 returns)
  5. Alden, IL 60001:  $1,450 (11 returns)

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Two quick notes:

1. There can't be a zip code with 30 returns, this must be incomplete data

2. What was the income for 10105 (-180,000) in a good Wall Street year?

Posted by: mike livingston | Feb 24, 2009 7:56:12 AM

Yeah... those "poor" saps reporting $182k of OI losses in midtown Manhattan, ha ha. Just goes to show how skewed the code currently is in favor of the wealthy and against the average "wage slaves."

Posted by: Wade | Feb 24, 2009 8:16:07 AM

Most of those Manhattan zips listed are for single office buildings or PO Boxes. I don't think it's residential in any way.

10153: GM Building
10152: Seagram Building
10274: Bowling Green PO Boxes
10179: ??
10105: Burlington Building

So probably financiers/companies that file their tax returns from their business address.

Posted by: gaucho | Feb 24, 2009 2:31:40 PM

this is incorrect data. the nation's poorest and wealthest zipcodes are both located on east 57th street?

Posted by: phil | Feb 24, 2009 2:33:17 PM

These figures are likely real, but skeweed by small samples. Manhattan has several buildings with their own postcode. If there are huge apartments in a tower, some of them owned by wealthy foreigners, it makes sense that only a few tax returns are filed with that residential address. The people who live in these buildings seem much better off than average Manhattan, which is waht you'd expect.

The huge average loss in 10105 is likely skewed by one huge loss return (e.g., one reported loss of $90M averages a loss of -$200,000 over 300 people who each make $100,000)

Posted by: peter bentley | Feb 24, 2009 2:49:11 PM

None of those NYC zip codes are regular zip codes. I'm pretty sure NYC zip codes that start with 101XX and 102XX tend to refer to a single large office building (usually in midtown), not a neighborhood. The building where I work, for example, is 10104, but is located in 10019. Here is a map of the regular Manhattan zip codes. You won't find any of the above zip codes on it.

Posted by: LinkMan | Feb 24, 2009 2:54:16 PM

Is this the median or the mean?

How could one NY zip code successfully claim such high losses when the others could not?

Posted by: bob | Feb 24, 2009 2:56:33 PM

The raw data for 10105 are clearly screwed up.

Posted by: bob | Feb 24, 2009 2:58:22 PM

I was curious, so I did a little creative searching. 10153 appears to be a single large building on Fifth Avenue. I suspect the returns are so low because it's an office building. Probably something similar is true for the other very low return zip codes, at least in Manhattan.

Posted by: Chris Hamilton | Feb 24, 2009 2:58:55 PM

On the low end, those results, at least in Texas, appear to be the result of prisons that take up the zip code.

Posted by: ILK | Feb 24, 2009 3:05:55 PM

The NYC zips are all people using PO Boxes or their offices as their address.

10274 is the Bowling Green [Postal] Station, so PO Boxes.
10105 is 1345 6th Avenue (Burlington House), an office building.
10153 is the GM Bldg, 767 5th Ave, an office building.
10152 is the Seagram Bldg, 375 Park Ave, an office building.
10179 is the (former) Bear Stearns Bldg, 383 Madison Avenue, an office building.

33109 is an actual residential place--Fisher Island. It was Forbes "most expensive zip" in 2008

75880 is a prison.
76598 is a prison.
63001 is the former town of Allenton, now part of Eureka. The zip is likely being phased out.
60001 is a rural township along the IL/WI border. Doesn't have it's own post office. Most probably list Harvard or Hebron (adjacent towns) addresses.

Posted by: CJ Lane | Feb 24, 2009 3:15:53 PM

re #1: Of course there can be ZIPs with few returns filing. And not because of low population density or extreme unemployment levels, but right in the heart of NYC.
How? Because USPS assigns unique zips to certain individual buildings.
(Google "buildings with assigned ZIP" to see)
I had assumed the practice was only for office buildings, but apparently not.

Posted by: james | Feb 24, 2009 3:38:28 PM

10153 is the ZIP code for the GM Building (767 Fifth Avenue in Manhattan) - a home to pricy law firms and investment houses. It is not a home for residents. Clearly, some people (or entities) are using it as their address for tax purposes. Same with the other NY ZIP codes in the top 5 (except 10274 - which is a PO Box only ZIP code for Bowling Green Station in Lower Manhattan). Nobody actually lives in any of these NY ZIP Codes.

Posted by: Bruckner Pacific | Feb 24, 2009 3:43:28 PM

Look at Connectict

where all the hedge funds are at. The richest easily have quater a million, and the effective tax rate is high, over 20%, Fair?

To answer Mike's question, I think people can effectively change their zip for filing purposes?

and that -180,000 might be loss carry over? Interesting NEW YORK?!

Posted by: John | Feb 24, 2009 3:50:36 PM

How can midtown Manhattan be among "the five poorest zip codes"? How can $182,290 be among the lowest average returns?

Posted by: Me | Feb 24, 2009 5:28:59 PM

Mike -

Every few blocks in NYC the zip code changes, so a zip code in NYC can indeed have that few returns when most of the surrounding properties are not residences and those who live there own very large apartments. Code 10152, for example, includes the Waldorf-Astoria and some of the fanciest shopping on 5th Ave.


Posted by: A.B. | Feb 24, 2009 5:30:59 PM

The data posted is also pretty mysterious. It says updated 2008, so sounds like this might be 2007 returns?

Posted by: Mike | Feb 24, 2009 5:40:38 PM

In their "about us" section, you can see where they get the data and how they process it.

ZIP Code Data show selected income and tax items classified by state, ZIP code, and size of adjusted gross income. The data are based on administrative records (individual income tax returns) from the Internal Revenue Service's Individual Master File (IMF) system, which includes a record for every Form 1040, 1040A, and 1040EZ filed with the IRS. The ZIP Code Data were developed by sorting the returns by the ZIP code provided on the return by the taxpayer. No attempt was made to correct the ZIP Codes provided by the taxpayers. In many cases, ZIP codes which are currently invalid were valid at some time in the past. Returns with foreign or APO or FPO addresses, or which did not contain a ZIP code were not included in these statistics. The state in which a return belonged was determined by the ZIP code.

Several steps were taken to avoid disclosure of information about individual taxpayers. ZIP codes from which fewer than 10 returns were filed were suppressed. The data for these ZIP Codes are not included in the state totals. Also, when an AGI class for a given ZIP code had a frequency of less than 10, it was combined with another AGI class within the same ZIP Code to create a total of 10 or greater. The order in which this was done was from highest AGI class to lowest AGI. The exception to this rule is when the lowest AGI class had less than 10, the lowest AGI class was combined with the next higher AGI class where the combination of the two classes was greater than or equal to 10.

An additional disclosure protection technique employed was the removal of any return that represented a specified percentage of the total of any particular cell. For example, if one return represented 75% of the value of a given cell, that return was suppressed from the tabulation. The actual threshold percentage used, however, cannot be released. The returns suppressed in this manner are not included in the state totals. We presented the data here as it is, without any filtration, modification, addition and deletion. If you have any concerns, please contact us. We reserve the right to update this privacy policy with or without notice.

Posted by: Peter | Feb 24, 2009 6:39:29 PM

So, my hometown is Gatesville, TX, and 76598 might be the zipcode for the local, quite large, prisons, but the zipcode for the town is 76528 and that, as you can search following the link above, has a much more even spread of incomes.

Posted by: Thomas | Feb 24, 2009 10:15:27 PM

The coincidence of the highest and lowest incomes being next to each other just proves that classes in the US do live side by side!

I wonder if there is a high concentration of Madoff clients in 10105?

Posted by: Brad | Feb 25, 2009 5:15:45 AM