How Many People Make a Million Dollars a Year?
Uncover the precise number of million-dollar earners in the US, along with key insights into their income and profiles.
Public interest often focuses on individuals and households at the top of the income scale. Many wonder about the number of people earning a million dollars or more annually. This article will clarify the prevalence of these high-income earners in the United States. It will examine the latest figures, how income is defined for statistics, and the general profiles of those who achieve this financial milestone.
The Current Landscape of High Incomes
The latest available data from the Internal Revenue Service (IRS) indicates that a specific number of individual tax returns reported an Adjusted Gross Income (AGI) of $1,000,000 or more. As of late May 2024 filing statistics for the 2022 tax year, approximately 285,126 individual tax returns fell into this category. This figure represents a small fraction, around 0.22 percent, of the total individual tax returns filed. When considering households, data from the U.S. Census Bureau, as reflected in a January 2022 survey, showed that less than 0.5 percent of households earned $1 million or more annually.
The income threshold to be considered among top earners can vary by location. While the nationwide income for the top 1% was around $787,712 as of June 2024, earning over $1 million annually was required to join the top 1% in certain states. Connecticut, Massachusetts, and California are examples where the income to reach the top 1% exceeded $1 million, with Connecticut having the highest threshold at approximately $1.2 million.
Understanding Income for Statistical Purposes
Understanding how “income” is defined and measured is important when discussing income statistics, particularly for tax purposes. Adjusted Gross Income (AGI) is a term frequently encountered in official statistics, especially from the IRS. AGI represents an individual’s total gross income from all sources minus specific deductions, often called “above-the-line” deductions. These deductions can include contributions to certain retirement accounts, student loan interest, and specific educator or business expenses.
Gross income, the starting point for AGI calculation, encompasses all earnings from any source before taxes or deductions. This broad definition includes wages, salaries, tips, interest, dividends, capital gains, rental income, and business profits. The distinction between gross income and AGI is significant because the IRS primarily uses AGI to determine tax liability and eligibility for various tax credits and benefits. Therefore, statistics based on AGI reflect a taxpayer’s income after certain allowable adjustments.
Characteristics of High-Income Earners
Individuals achieving a million-dollar annual income often share certain demographic and economic characteristics. Data suggests the average millionaire tends to be around 57 years old. Their income sources are often diverse, moving beyond traditional wages and salaries to include business profits and capital gains. For the highest earners, business income can even surpass wage income or returns from investments.
Certain industries and occupations are more commonly associated with generating these high income levels. Fields such as finance and investments, technology, manufacturing, healthcare, and fashion and retail frequently produce millionaires. Within these sectors, careers like engineering, accounting, law, and management are often cited among those held by high-income earners. From a geographic perspective, high-income individuals and households are often concentrated in specific urban and coastal areas across the United States. States like New York and California, along with certain counties in Florida and Washington, exhibit a higher concentration of extreme wealth.