Millennials filed one-third (50.5 million) of the tax returns in 2016, reports the Tax Foundation.
On those 50 million tax returns, millennials reported $1.75 trillion in total income. This makes up about 17 percent of all income reported in 2016, smaller than this age group’s share of tax returns filed (33 percent). This difference, one-third of returns reporting just 17 percent of total income, shows that millennials earn less than other taxpayers, on average.
This makes sense because younger individuals are still working on their education, building their careers, and gaining skills and experience. Income changes with age, generally arcing in an inverted U-like shape over the course of an individual’s life—a large portion of taxpayers who earn low incomes in a particular year will earn higher incomes when they are older.
Wages and salaries made up 93 percent of millennials’ total income, making it their largest source of income, at $1.63 trillion. The next largest income source for millennials in 2016 was business net income at $53.4 billion (13.7 percent of all business net income) followed by partnership and S corporation net income at $31.6 billion (4.2 percent of all partnership and S corporation net income).
When figuring their taxable income, most millennials, 44.3 million, took the standard deduction. Only 5.9 million returns used itemized deductions. Millennials utilize itemized deductions to a lesser extent than all other taxpayers; about 12 percent of millennials itemize compared to 40 percent of all other taxpayers.