Headlines about the top 1% rarely say which year, which measure or which group the number covers. This guide gives readers five questions to ask of any wealth figure, using current examples from the IRS-based Tax Foundation, the Federal Reserve, SmartAsset and Charles Schwab, and a New Orleans tax attorney’s view that income and wealth are not the same thing.
By Dr. Tamara Patzer
One headline puts the entry line for the wealthiest households at one number. Another puts it somewhere very different. Both can be accurate. They are usually answering different questions. New Orleans tax and estate attorney Todd M. Villarrubia opens his book, Entrepreneurial B.E.A.S.T. Mode™, with the observation that most people misjudge who the wealthiest Americans are. This guide gives readers five questions that explain why, and what to ask of any wealth figure they meet.
Which year does the number describe?
Wealth data trails the calendar. The Tax Foundation’s analysis, based on IRS data for tax year 2023, found that a filer needed about $676,000 of adjusted gross income to reach the top 1%1. A state estimate published for 2026 starts from IRS return data for 2022 and adjusts it forward using state personal income growth2. One number is a measured year, and the other is a projection.
A reader who sees two figures should first ask whether they describe the same period. Often they do not.
Is the number about income or about wealth?
This is the most important distinction, and the most often missed. Villarrubia draws the line this way: income is what flows in during a year, and net worth is the stock that has built up. Income is what arrives in a year. Net worth is what is left after subtracting debts from assets.
The same label, top 1%, can mean either1,4. The IRS-based threshold above measures income. In the Fed’s distributional accounts, the top 1% holds roughly $60.3 trillion of net worth as of the second quarter of 20264. A household can be in one group and not the other.
Who is being counted?
Filers, households or individuals. The state estimates apply to tax return filers, not to households or people2, so a couple filing jointly counts once. A household with two earners can look different from a person with one income.
Ask what the unit is. A figure for filers and a figure for households are not interchangeable, even when they carry the same label.
What is it compared against?
An average, a median or something else. In its release dated October 9, 2026, the Federal Reserve reported 2025 median family net worth of $215,900 and a mean of $1.24 million3. The gap between the two is a signal. A mean more than five times the median means a small number of large fortunes pull the average up3.
Charles Schwab’s 2025 Modern Wealth Survey adds a different kind of comparison5. Americans surveyed said it takes $2.3 million, on average, to be wealthy5. That is an opinion, not a measurement of anyone’s balance sheet, and it can be useful for what it shows about perception.
Who published it, and why?
Every number has a source, and the source has a method. The Tax Foundation works from IRS data. SmartAsset adjusts that kind of data forward. The Federal Reserve runs its own surveys and accounts. Schwab polls Americans. None of these is wrong. Each answers a different question, and a reader who does not know which will compare things that should not be compared.
The book that prompts this guide is no exception. Villarrubia’s opening chapter argues that the threshold for the top tier is lower than many believe. The sources above differ on the exact number, yet none of them puts the line anywhere near a billionaire’s income.
What does a worked example look like?
Take two figures a reader might meet in the same week. One says $676,000 reaches the top 1%1. Another says $987,325 does in California2. They look like a contradiction. They are not. The first is a national threshold for tax year 2023 from IRS data1. The second is a California estimate for 2026, built from 2022 IRS data and moved forward with state income growth2.
The gap comes from three sources at once: the place, the year and the method. A reader who spots that has learned more than either headline said. A reader who does not may conclude that one source is wrong, or that the line has jumped by $300,000 in three years.
Why do headlines skip these details?
Because they take space and weaken the hook. A short number travels farther than a number with a footnote. That is not a reason to distrust every figure. It is a reason to look one level down, to the source, before using a number to make a decision.
What do the numbers mean for an owner?
Most business owners do not read these headlines for curiosity. They read them to learn where they stand. The honest answer is that no single figure can tell them. Villarrubia puts the risk plainly: a high income and a high net worth, on their own, do not secure anyone’s future.
An owner whose wealth sits in one private company can look rich on a valuation, feel cash-poor in practice and cross the income line in a single year. Planning has to look at structure, liquidity and timing, not only at a rank.
What is a better way to read the next headline?
Ask three questions: who is being measured, in which year, and by what method? A headline about the richest households could refer to income, to wealth, to filers or to households, and each gives a different answer. Check the source named in the story, note its date and compare it with your own situation. Reading this way takes a minute and prevents most of the confusion that big numbers create.
Common questions
Which number is correct? All of them, for what they measure. The skill is in matching the number to the question.
Why do the state figures differ so much? Because incomes and living costs differ. The 2026 estimate runs from $445,892 in West Virginia to $1,147,898 in Connecticut2.
What is the quickest check? Find the source, then the year, then whether it measures income or net worth. Those three facts remove most of the confusion.
Should I act on a headline? No. Treat it as a prompt to check your own numbers with a licensed professional.
Sources
- Tax Foundation, Who Pays Federal Income Taxes? Tax Year 2023
- SmartAsset, Income Needed to Be in the Top 1% in Every State (2026)
- Federal Reserve Board, press release on the 2025 Survey of Consumer Finances
- Federal Reserve Distributional Financial Accounts, Net Worth Held by the Top 1% (FRED)
- Charles Schwab, 2025 Modern Wealth Survey (Business Wire)
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™. Wealth Planning Law Group, 101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124. Phone: 504-982-8207; email: todd@lawealthplan.com; website: https://lawealthplan.com/?utm_source=newsanchored&utm_medium=world-reporter&utm_campaign=top-1pct
Attorney advertising. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
