Now that the filing of 2021 tax returns is over (unless an October 15 extension is requested), it can be fun to take a look at some of the odd, informative and, perhaps, helpful comments about taxes going forward.
- Tax Day: It wasn’t always April 15. In 1913, March 1 was the big day; in 1918, the day moved was to March 15; and in 1954 the current date was established.
- Few Owed Taxes At First: Before World War II, few individuals owed income taxes. According to the Tax Foundation, only 1.1% of working people filed returns, and approximately 17% of those filers didn’t have to pay.
- Withholding Tax: During World War II, the feds needed a steady flow of cash to fund the war. To do this, Congress passed the Current Tax Payment Act of 1943 that required companies to withhold income taxes from employees’ paychecks.
- The “Average” Tax Refund: Good news and bad news. For tax year 2021 taxpayers will on average receive $3536 back. The bad news is that it’s just an average.
- Tax Freedom Day: Hurray! This is the first day each year that Americans begin to work for themselves and not various governmental agencies. Every dollar earned before this day funds federal, state and local government services. After that day – which this year was April 16 – you’re golden.
- Who Didn’t Pay: The Tax Policy Center estimates that 57% of American households paid no federal income taxes. That said, since most workers pay payroll taxes, Americans who paid neither payroll nor federal incomes taxes was only 19% in 2021.
- Taxpayers Get Tax-Free Earnings: In tax year 2021, single filers didn’t have to pay federal tax on the first $12,550 they earned. For married tax filers – you guessed it – doubled.
- What If You Win The Lottery: Congrats! No matter where you live, Uncle Sam withholds a 24% piece of the winnings. As far as the states are concerned, some collect an income tax, others do not. It all depends on where you live.
- Taxpayers Who Fool Themselves: Some people make it a point to not pay their taxes. When the IRS politely inquires as to why this is, some argue that the 16th Amendment was not properly ratified; others argue that filing a tax return violates their 5th Amendment rights. Not to worry, the IRS says it will “help” those taxpayers who are misled to believe such myths.
- Crime And Taxes: IRS publication 17 wants taxpayers to include on their returns “income from illegal activities, such as dealing illegal drugs.” But it gets even better. The feds go on to say, “if you steal property, you must report its fair market value,” but only if you don’t “return it to its rightful owner in the same year.” Go figure.
Charles Schulz, the late “Peanuts” cartoonist, once had Snoopy write, “Dear IRA, I am writing to cancel my subscription. Please remove my name from your mailing list.”