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Taxes

Taxes‏

Greetings,

Today is April 15th.

Yeah I hate to say it but April 15
is Tax Day for most Americans.

But you know what, I'll bet 99% of them don't
know when it started, and why.

Well let me tell you something about...

The Creation of Tax Day

Soon after the passing of the 16th Amendment,
Congress named March 1, 1914 as the first Tax Day.
(People should have known that something bad was
about to happen when Congress did this, but alas
they did not.)

So why March 1st? 

Well here's what they said. It fell roughly one 
year after the 16th Amendment was enacted. 

Then Bureau of Internal Revenue created a Form and 
they called it Form 1040 so you could file and pay 
personal income tax, which was 1 percent for income 
under $3,000 ($4,000 for married joint filers) and 
up to 6 percent for the wealthiest Americans.

And if you're like most Americans, you would now say,
"I wish I was still only paying 6 percent of my income."

And you'd be exactly right.

Then someone (most likely another smart Congressman)
had the great idea to change it.

Tax Day was moved to March 15 in 1918 and then
again to April 15 in 1955. 

The official reason for the pushback was to spread 
the workload of IRS employees, but some economists 
speculate that a later filing date means the government 
can wait even longer to pay refunds.

Who knows? 

I do know this though.

The longer the IRS can hold onto the money it
withholds via payroll taxes, the more interest it
earns.

But even the April 15 due date can shift a little.

In 2005, the District of Columbia enacted
Emancipation Day on April 16 to commemorate the
day Lincoln signed an 1862 law freeing the first
slaves in Washington, D.C. 

When April 16 falls on a Saturday, the holiday is 
officially celebrated on Friday, and when it falls 
on Sunday, it's celebrated on Monday. 

Here's what they tell you.
The IRS can't force people to file taxes on a holiday 
(even a local one) or the weekend. 

That's why Tax Day became Monday, April 18 in 2011, 
because Friday the 15th was technically Emancipation Day. 

In 2012, April 15 is a Sunday and Emancipation Day falls 
on a Monday, so Tax Day was on Tuesday, April 17 -- for
everyone.

There's a small caveat, however: If you submit IRS
Form 4868 on or before April 15, you get an
automatic six-month filing extension.

But if you do this, don't forget. 

Filing an extension doesn't mean you don't have to pay 
any taxes you owe by April 15th. 

According to the IRS, you need to [estimate] what you owe 
(this year's W-2 forms and last year's return should give 
you an idea) and pay that amount on April 15th. 

If you pay too much, the IRS will refund you the difference 
when you file. If you pay too little, you can make up the
difference when you file. 

Remember: If you don't pay anything, the IRS will charge interest 
(plus a late payment penalty) on what you owe starting on
April 16th.

Here's my point.

If you struggle or you hate to pay taxes, plan for this
event throughout the year. 

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