A reader asked why April 15 was chosen as tax day. Originally, back in 1913, the deadline was March 1. That's because Congress passed the 16th Amendment, which created the income tax on February 3, 1913. Congress gave everyone a year plus six weeks as the first deadline. The Revenue Act of 1918 moved the date forward to March 15. In 1955 some tax-code revisions pushed the date a month further, to April 15.
Why? The IRS said it "spread out the peak workload." It could also be because, as the middle class grew, the IRS had to issue more refunds. Pushing back the deadline allowed the Federal government to hold onto your money just a wee bit longer. (Source: Jessica Sung, "Why Is April 15 Tax Day?" Fortune Magazine, April 15, 2002)
How It Affects You
Roughly half (48 million) of all 2013 tax filers didn't wait for the deadline. They filed early, and have received their refunds already. On average, they received more than $3,000, higher than the $2,800 average received last year.
Early filers are also more likely to file electronically (98% vs 80%) and use popular tax preparation software (45% vs 33%). They can even find discounts on tax prep software at sites such as AnyCodes.com.
Tax Freedom Day is April 18 this year. It is the first day in each year that Americans are not working just to pay taxes. It was five days later than last year. That's because Americans are paying more taxes thanks to an improving economy. Stronger growth generates higher incomes, and therefore higher income tax receipts.
Tax Related Articles
- Where Do Your Tax Dollars Go?
- What Is the Fair Tax Plan?
- Do Tax Cuts Lead to Budget Deficits?
- What Is Supply-Side Economics?
Photo Credit: Getty Images