Image: 1040 form from wikimedia.org
Americans have been paying taxes since the 16th Amendment to the Constitution gave Congress the legal right to tax individuals’ incomes in 1913. When Americans or US residents start a new job, they fill out a W-4 form that dictates how much will be withheld from each paycheck for taxes. Marital status, number of dependents and income level contributes to the amount withheld.
At the beginning of every year, typically by the end of January, taxpayers receive a W-2 form that summarizes all they paid in taxes the previous year. That form is used to complete the filing form (i.e. 1040, 1040EZ) reconciling how much was paid versus how much should have been paid. If a taxpayer paid more than expected based on the factors above, they are entitled to a refund. If they paid too little, they owe the government the balance.
April 15th has been the official deadline for filing both federal and state taxes since 1955. Often post offices will stay open until midnight to get the returns stamped and off to the government.
Two cool things about tax day:
- Seven states have no state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income. Residents of these states do pay federal taxes, but not state.
- To “show appreciation for how hard Americans work for their money,” Dunkin’ Donuts is offering customers a free donut with the purchase of a cup of hot coffee on April 15, 2008.
