Is this the most dreaded day of the year? Many US residents mark April 15th as D-Day - the day to file their income tax returns to the Internal Revenue Service (IRS).
History of Tax Day
Income tax was first introduced in the United States in 1861, while Abraham Lincoln was President. The rate was 3% and levied on incomes above $800 per year . The resulting revenue was used to help fund the American Civil War. In 1872 the income tax was seen as unconstitutional and the law was repealed. It was hard to take back a tax once it was in place so the idea of a tax on personal income, at a rate of 2%, was reintroduced in the Revenue Act of 1894 even though the legal status of this kind of tax was still unclear.
In 1913, the "Sixteenth Amendment" to the Constitution was ratified which allows Congress to levy an income tax without apportioning it among the states or basing it on the US Census. The amendment was adopted on February 3, 1913.
The details of the income tax system have changed greatly since 1913. The top rates of tax have varied enormously and were particularly high during the First and Second World Wars and the Great Depression. Individuals and families with very low levels of income do not have to pay income tax and may even receive subsidies.
In 1913 Tax Day, or the filing deadline, was March 1. However, it was moved to March 15 in 1918 and April 15 in 1955, where it has remained. If April 15 falls on a Saturday, Sunday or a civil holiday, such as Patriot's Day, the deadline is extended to the next working day. An extension due to a holiday may only affect certain states. In 2007, the residents of some states were granted an extension due to the disruption to public life in many areas caused by a huge Nor'easter. In 2007, the observance of Emancipation Day in Washington DC extended the 2006 income tax filing deadline from April 16 to April 17, for the entire nation.
What do people do?
The majority of residents in the US file tax returns to the IRS of all income that they received in the previous fiscal year. Some groups, particularly veterans, pensioners and some low-income families, do not have to file a tax return unless they wish to qualify for certain types of income subsidy. Others may wait until the last moment to file their return and pay any money they owe. As with everything, some people find filing a tax return to be complicated, while others feel they should not have to pay income tax at all. Income tax returns may be filed on paper or electronically. Today, people are encouraged to file a return via the Internet since it is felt to be more efficient and reduces the risk of mistakes being made or documents being lost in the post.
The Day Itself
Tax Day is not a federal public holiday in the United States. Schools, post offices, stores and other businesses and organizations are open as usual. Public transportation runs on its usual schedule and no extra congestion is expected on highways, however, most post offices are open late to accommodate taxpayers who wait til the last minute to mail their returns.
So, whether you file on time, wait til the last minute or file an extension - there's no escaping it, taxes are one of the 2 things that are guaranteed in life.
The income tax has made more liars out of the American people than golf has. Even when you make a tax form out on the level, you don't know when it's through if you are a crook or a martyr. ~Will Rogers