Facts About Tax Day

WHY IS TAX DAY ON APRIL 15TH AND WHERE DOES THE TAX MONEY GO?

All over the country, Americans have been gathering receipts and organizing tax documents, preparing to file their taxes before this year’s deadline, which falls on Tuesday, April 15th. But did you ever wonder how that date was selected and where all of the tax revenue goes?

In 1913, Congress passed the 16th Amendment to the Constitution which gave it the authority to collect income tax. The original tax deadline was March 1st because Congress wanted to give citizens a year plus 6 weeks from the February 3rd ratification date to pay their taxes. Then the Revenue Act of 1918 pushed the deadline to March 15th. In 1955, revisions in the tax code moved the tax date ahead one month to where it stands today, on April 15th. And if that date actually falls on a Saturday, Sunday or civil holiday, then the deadline is extended until the next available working day. (Source: Jessica Sung, “Why Is April 15 Tax Day?” Fortune Magazine, 4/15/2002.)

How much will the U.S. government collect in 2014?

The U.S. government plans on collecting $3.034 trillion dollars in fiscal year 2014 based on a combination of income tax (46%), Social Security, Medicare and payroll taxes (34%), Corporate taxes (11%) and the remaining 9% in excise taxes and tariffs.

How much will the U.S. government spend in 2014?

Our government is planning on spending $3.778 trillion dollars in fiscal year 2014. Over 60% of that ($2.3 trillion) will go towards Mandatory spending such as Social Security, Medicare, military retirement programs and debt interest. The rest of the spending is Discretionary and will be negotiated between the President and Congress. Discretionary items include the cost of running the Federal government and military spending. (Source: US Economy, About.com based on the Office of Management & Budget FY 2014.)