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Q&A: How tax day came to be

How tax day was chosen

Why was April 15 chosen as tax day?

In 1913, when the 16th Amendment to the Constitution was ratified, authorizing a tax on incomes, Congress chose March 1 as the filing deadline. That was changed in 1918 to March 15 and again in 1955 to April 15. It's different only if April 15 falls on a Saturday, Sunday or holiday.

Why that date? Fortune magazine reported that an IRS spokesman said the move was made to "spread out the peak workload."

But, Fortune wrote, there's also this: As the income tax applied to more people, the government had to issue more refunds. "Pushing the deadline back gives the government more time to hold on to the money," Ed McCaffery, a University of Southern California law professor and tax guru, told the magazine.

Individual income taxes' share

How much of total government revenue is provided by individual income taxes?

Historically, the percentage of the total U.S. government revenues taken in as individual income tax has ranged from 39.5 percent to 49.9 percent. For 2007, for instance, the percentage was 45, with total tax revenues at $2.57 trillion and amount received from individual income taxes at $1.2 trillion.

Social Security not always taxed

Have Social Security benefits always been subject to federal taxes?

When Social Security began in 1935, benefits were not taxed. Congress first passed a law in 1983 allowing Social Security benefits to be taxed and President Reagan signed it.

Whether you pay a tax on the benefits depends on your income from other sources, including wages, interest, other pension benefits and withdrawals from 401(k) and IRA accounts.

A single person claiming less than $25,000 and married taxpayers claiming less than $32,000 in income from other sources are not subject to the personal federal income tax on their Social Security benefits. Taxpayers with incomes above those thresholds will find that the personal income tax applies to some percentage of their benefits.

The original amount of benefits subject to federal income tax was 50 percent. Congress in 1993 raised the amount subject to tax to 85 percent. President Bill Clinton signed that into law.

The Social Security Administration says about one-third of people who get Social Security have to pay income taxes on their benefits.

Dow Jones average milestones

When did the Dow break 10,000? 11,000? 12,000? 13,000? 14,000? What's the highest it has ever been?

The Dow Jones Industrial Average closed above 10,000 on March 29, 1999; 11,000 on May 3, 1999; 12,000 on Oct. 19, 2006; 13,000 on April 25, 2007; and 14,000 on July 19, 2007.

The highest close was Oct. 9, 2007, at 14,164.53.

Q&A: How tax day came to be 04/12/10 [Last modified: Monday, April 12, 2010 12:58pm]
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