Tax Day and tidbits to lighten the load
By Dian Vujovich
No matter how you slice it, Tax Day comes with pluses and minuses. The biggest plus is living in a great nation run by a representative government. The minus—but more a reality than a minus– is that it takes money to run this country.
That need for money can seem like a thorn in one’s side be they an individual or a corporation. Oh I’ve forgotten, corporations are individuals so perhaps I should have written ‘be they an individual or an individual’s corporation.” Whatever. Taxes are necessary to some degree or another, like them or not.
How much we pay thanks to our goofy loop-holed tax code is a subject for another day. So on this April 15 lets look at a few tax tidbits listed in no particular order:
• Prior to 1913, people didn’t owe income taxes. When Congress passed the income tax law in 1913, they adopted a 1 percent tax on net personal income of more than $3,000 with a surtax of 6 percent on incomes of more than $500,000. They also created the first Form 1040, according to IRS.gov.
Also that year, the 1 percent tax levied on net corporate incomes of more than $5,000 put in place in 1909 was repealed.
•Total income tax revenues have been soaring in leaps and bounds over the past 100 years. Those income tax revenues include dollars collected from federal, state and local governments. For example, in 2013, over $2,077.78 billion was collected; in 1993, total revenues amounted to $776.9 billion; in 1983, $395 billion; in 1963, $73.9 billion; and in 1913, less than half a billion dollars, $0.04 billion, according to Turbotax.intuit.com.
•Originally Tax Day was March 15.
• Our tax code states that Tax Day cannot fall on a Saturday, Sunday, a holiday or April 16 because that is Emancipation Day, a legal holiday in Washington D.C.
Getting the Money
•An estimated one-third of all individual tax returns are filed during the first two weeks of April and up through Tax Day.
• Since the 1950s, most people have overpaid their taxes. Consequently, there is an 85 percent chance that an individual will either owe nothing in taxes in a given year or get money back.
•Eight out of ten tax returns filed in 2013 received a refund.
• This year, refunds for those who have already filed have averaged $2,979. That’s $56 more than last year, according to an IRS spokesperson.
•About 91 percent of those who have already filed their taxes this year have done so electronically.
• A survey conduced in February by John Hancock showed of the 1,049 affluent investors queried, 29 percent expected to owe taxes and 62 percent expected to receive a refund.
Twenty-five percent of those expecting refunds plan on paying down debt with the money, 17 percent plan on spending it on things like a vacation or luxury items, and 2 percent say they will direct it into a retirement account.
In the corporate world
•Thanks to inversions, (companies moving their headquarters out of the U.S.), a record 54 companies in the S&P 500 are at least partially exempt from the corporate income tax thereby eroding the tax base/
•That figure is more than twice what it was four years ago.
•In 2016, Tax Day will be Monday, April 18.
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