Posted on | January 28, 2010 | Comments Off on When Is The Best Time To Go For A Tax Return Filing?
When Is The Best Time To Go For A Tax Return Filing?
Millions of US citizens get ready either for paying taxes or for collecting tax refund from the government by 15th of April each year; when exactly did this day become a great day for the taxpayers and when are the people expected to file their income tax returns? Let us see the history of the date “15 April” as the date for income taxes and why it got chosen.
In the early 1860s, under the reign of President Abraham Lincoln, the Americans were known to pay the first income tax to the government. There was a huge loss to the country’s economy due to the Civil War, and the government decided to create an internal revenue-generating system and a law was enforced to make the citizens pay a federal income tax. The present-day income tax got started this way. On the basis of progressive or graduated taxation principles and of cutting a share of income at source, the income tax procedure was formulated. The commissioner had the highest authority of assessing, levying, and collecting federal income taxes. He also had the authority of enforcing tax laws through prosecution or by capturing income and property.
Initially, 15 April was not the deadline for filing the income tax. First March was the date initially set for this purpose. In 1918, the then Congress reset the date to 15th of March. Afterwards in the “1954 amendments”, the date was finally fixed at 15th of April, and is going on like that till today. The question is why this particular date? Many scholars argue that with this date, IRS gets more time for handling the workload and it can work conveniently for offering any tax refund. For over fifty years now, 15 April has been the official date for this purpose. Historically speaking, this is not a very long time period, and to a higher possibility could again be changed.
Being a taxpayer yourself, you are supposed to file a return or a time extension (Form 4868) on or before 15th of April. Legal or other corporate entities are supposed to file their tax returns or federal income tax return on or before 15 March, or they also can take a time extension. During this extended period of time, you will have to pay the government some extra taxes due. Therefore, if you are not ready with your business or personal financial information by the government-specified date, you are supposed to pay some extra tax in form of a penalty.
After World War II, the whole tax responsibility was equally shared by both the individual and corporate taxpayers. However nowadays, the responsibility has been shifted more toward individuals compared to business entities. In and around the year 1867, people started becoming more concerned about their special interests, they started raising their voice and getting heard, and finally in 1872, the government had to abolish the income tax law; and during the period from 1872 to 1913, almost all the government revenue was generated through the sale of tobacco, wine, liquor, and beer. In 1894, for a brief period of time, the income tax came back into force again, but soon afterwards in 1895, the US Supreme Court declared it unconstitutional with regard to it being not apportioned properly among all the states conforming to their Constitution.
Around 1918 in America, eventual taxation laws were defined. Until then, the government generated a major part of tax revenues from selling alcoholic beverages and through imports and exports. After the Constitutional amendment in 1919 when alcohol selling and manufacturing were made illegal, it became imperative to look for an alternative revenue-earner. Federal income tax was proposed as the solution, and since then it is operational till today. During the period from 1920 to 1933, when no alcoholic beverages were allowed to be sold in the country, the individual taxpayer had to take on a heavy burden to support the government revenue, and the burden naturally got heavier with time. Some people were in the business of illegal liquor making, and they had to pay tax too on the liquor so produced; these bootleggers were often imprisoned for tax evasion but and not for bootlegging. In case you wanted to prosecute somebody, taxes would invariably come into focus.
With the passing of the “Revenue Act of 1942”, a new era began in the American history known as the New Deal period. Since then there have been a continuous growth in the government power, control, and expenditures; and today, the US government has become a multi-billion dollar giant supported by the individual American taxpayers. Every year, it consumes 10 percent of the income that we earn, and it tends to eat up even more money once the Social Security Administration comes into play. There is nothing that we can anticipate as a sign of relief.
At present, IRS is taking all the responsibilities of tax regulations in the country, and this office has got 4 major segments, namely, the Small Business & Self-Employed, the Investment & Wage, the Large & Mid-size Business, and the Government Entities & Tax Exempt. Certain specific responsibilities are imposed upon each of these divisions.
The ways of collecting and calculating taxes are always in the focus and there is continuous effort of how to modify them for the better. National sales tax and the flat tax are the most common forms of taxes. It all depends upon the Congress to take the step up and make a change; otherwise taxes will continue to remain a cumbersome affair for everybody.