5 Interesting Facts About Tax Day
It’s only a few days before we start the second quarter of the year – which means we are starting the month of April. April is an important month concerning your taxes because that’s where the deadline to file your income tax return and pay the estimated tax owed lies. The deadline day is called Tax Day. The Tax Day is an ugly reminder for many of you who have missed the deadline before and got penalized by the IRS. It suddenly brings back all those bad memories – the pain you endured when you missed some paperwork that resulted in your filing late. However, I aim to remove some of the stigmas around Tax Day by writing about some interesting facts about this day. These facts will be fun and give you more knowledge about it and some bit of history about our taxes.
What are the interesting facts about Tax Day?
- Tax Day wasn’t always on April 15
When you hear about the tax deadline, you always think of April 15. But this was not always the case. When the Sixteenth Amendment to the United States Constitution was ratified in 1913, it gave the United States Congress the legal authority to tax all incomes. The filing deadline for individuals was set on March 1 in the same year. This was the first year that Federal Income tax was filed under the current rules, albeit with some later changes/additions to the tax code due to various reasons. But the foundation was laid back in 1913.
The March 1 deadline did not last long. It was changed to March 15, 1918. But the Tax Day was finally changed to the current April 15 in 1955. Therefore, this remains the last day to file income tax returns for individuals and pay estimated taxes. But if this day falls on a weekend or a public holiday, it is moved to the next available day that’s not a weekend or a holiday. The Tax Day can also be moved if it falls within a natural disaster or pandemic, such as what happened in 2020 and 2021 due to COVID-19. In such cases, it is not just moved to the next available date, but to a later day, for example, May 17 in 2021 and July 15 in 2020.
- The tax rate was flat at one point
Well, this was years before the ratification of the Sixteenth Amendment to the United States Constitution. The Revenue Act of 1861 first introduced income tax to the United States at a flat 3% rate on income above $800. Back then, $800 was an enormous amount. Income tax collected here was used to fund the Civil War. Nevertheless, income tax was ruled out eleven years later before bouncing back and ruled unconstitutional again in 1894. Income tax only made a permanent return in 1913.
- Snitches get paid
Yes, the IRS rewards whistleblowers who report tax evasion. If your employee successfully reports you for tax evasion, they get between 15% to 30% of the ‘spoils’ collected from the reported case. Be careful whom you let into your inner circle! The IRS has a whole whistleblower office that only waits to receive calls from concerned taxpayers about other taxpayers’ tax evasion. Whistleblowers do not only report their bosses for tax evasion, but they could even report a neighbor or friend.
- Tax Day is not a holiday; it’s not celebrated but feared by many
Albert Einstein was reported to have said these words: “The hardest thing to understand in the world is the income tax.” True. Many people struggle to understand income tax, which is why millions hire someone like me, a tax pro, to help them prepare and submit their federal returns. Tax Day is, therefore, not celebrated in any form. People dread the day because it is a pain for many taxpayers, especially those who delay preparing their tax returns and try to gather everything on the final day and submit it to the IRS. It usually does not work even if you are submitting electronically.
- Tax Day isn’t the same for all States
That’s right; some States observe holidays that are not necessarily Federal Holidays. As already mentioned, if Tax Day falls on such a holiday, it is pushed to the next available weekday that is not a holiday. Therefore, even though this year’s nationwide Tax Day is April 18, 2022, taxpayers who reside in Maine and Massachusetts have their own Tax Day on April 19, 2022. This is due to the Patriot’s Day holiday.
Conclusion
Tax Day or the deadline to file federal tax returns has some exciting facts attached to it. The notable one is how taxes evolved back in history into what they are today. It is reported that in 1913, when it all started and never stopped, the federal tax code was only 400 pages long. But by 2010, it was 70,000 pages long. Massive! These many pages in the tax code are why many people would never understand taxes. Imagine if it boggled Einstein back then when it still was a few pages compared to today; how about now with these tens of thousands of pages? This means you must hire a tax professional who knows this tax code to help you prepare your taxes and save money using some advantages outlined in the tax code. If you require such a tax professional, contact my team today and book a quick tax chat with me.
Frequently asked questions
- What are tax facts?
Tax facts are essential information about what happens during a tax season. These facts could be about how the IRS beefs up its surveillance software or who pays more tax than others. An example of a tax fact is that federal returns are due around April 15 each year. Knowing some tax facts helps you plan your taxes effectively and save money on taxes.
- What are taxes used for?
All the money collected from taxes is used to fund government programs. For example, when taxes were first introduced, the government needed more money to support the civil war. Government programs are not limited to war alone. But social welfare and building public infrastructure are included, among many.
- What is a Tax Day?
A Tax Day is the final day individuals can file their federal tax returns. Tax Day is April 18 in 2022.
- Can I do taxes on Tax Day?
Yes, you can file your federal tax return on Tax Day, but you cannot do so after midnight on the same day – you would be late. If submitting your return by mail, it must be stamped and deposited by midnight on Tax Day. You can request an extension to file (by submitting Form 4868 and paying estimated taxes) if you think you cannot submit your return by Tax Day.
- What happens if I don’t file taxes?
If you don’t file taxes, the IRS may use information returns received from your employer, your bank, insurance, merchants, etc., to estimate taxes you owe. Therefore, you may receive a tax bill even if you do not file. If this happens, then you will also owe late-filing penalties and interest. But if you owe no taxes and don’t file, you may not be liable to pay any taxes.
