Use with Survey Data - Example 7

Of course the SOI is not the only source of income data and taxcalc can calculate tax liabilities from any source, provided variables are named according SOI conventions. It isn't necessary to have all the variables - taxcalc will assume missing data items are zero and continue calculating. In this respect it duplicates the procedures of the IRS in checking actual tax returns.

This example uses the Survey of Consumer Finances from 2001.

libname scf "../../scf"; %include "../taxcalc.sas"; data; set scf.scf2000; flpdyr = 2001; mars = 1; if x8023>1 then mars = 2; e00200 = x4112; %INIT; %COMP; run; proc means n min max mean; weight x42001; run;

Note that the 2001 survey provides data for 2000, and that the SCF does include most of the variables needed for a fairly accurate tax calculation although we only use marital status and wages in this example. In the SCF x8023 specifies marital status, x4112 wages, and x42001 the record weight. With only 4 variables the result is of low accuracy, but it makes the example a small and clear. The more variables from the full list of variables actually used in the calculation the more accurate the final result will be. If you are using survey data you might want to assign values to many of these variables:

XOCAH: Number of children at home.
AGEP: 1 for primary taxpayer over 65, 0 otherwise
AGEs: 1 for secondary taxpayer over 65, 0 otherwise
E00200: wages for primary and secondary taxpayers together
E00300: Other income
E32880: wages for primary taxpayer only
E32890: wages for secondary taxpayer only
E00650: qualified dividends
E00300: interest, non-qualified dividends, schedule c,e and f, etc.
E01700: taxable pensions
E02400: gross social security income
E18500: Real Estate and other state and local taxes
E32800: child care expenses
E02300: unemployment insurance
N24: number of children under 17
E19300: mortgage interest and other itemized deductions that are not a preference for the AMT
E22250: net short term capital gains and losses
E23250: net long term capital gains and losses

among others. TAXCALC will assign zero to any variables you leave missing. The accuracy and suitability of the result for your purpose is something only you can determine.

Note that (for example) in the SOI database E00300 is only interest, but here we suggest lumping most other categories ofincome in that field, because they will all receive the same tax treatment.