Tax day is finally here!
To celebrate getting your tax return finished, test out your knowledge of tax history with our trivia quiz. Also read about some helpful hints that can make paying your bills less stressful.
We also have some suggestions for how small businesses can help one another stay afloat until the entire economy returns to normal. Finally, read about some tips from the Federal Trade Commission on keeping your kids safe online.
Please call if you would like to discuss how this information could impact your situation. If you know someone who could benefit from this newsletter, feel free to send it to them.
In this issue:
- Tax History Trivia!
- The Art of Bill Paying
- Helping Your Fellow Business Owner
- How to Protect Your Kids Online
Tax History Trivia!
With the IRS moving Tax Day back for all U.S. filers for the second time in as many years, it is time once again for a fun diversion by looking back at tax history! Test your tax knowledge using these questions to stump your friends and family.
Q In 1861, President Abraham Lincoln enacted a flat tax on wages above $800 to help pay for the Civil War. What was the tax rate?
A a. 3%. Even though Lincoln enacted this 3% tax, the Federal government didn’t have an effective way to collect the tax at the time. The result? The tax fell far short of its projected revenue goals. Thankfully, the government now makes tax law changes with plenty of time to implement the change…oh, maybe not so much has changed after all!
Q In what year did taxes start being withheld from paychecks?
A c. 1943. In a need to drum up some cash for a war, the government started requiring taxes to be withheld directly from paychecks rather than waiting for quarterly or annual payments.
Q The estate tax, which may apply to your assets after you pass away, was originally enacted in 1797 to fund which branch of the U.S. Military?
- Air Force
A b. Navy. It was repealed in 1802, but later returned to help fund the Civil War.
Q In 1921, which state was the first to enact a sales tax?
- West Virginia
A d. West Virginia. As of today, all but 5 states (Alaska, Delaware, Montana, New Hampshire and Oregon) have a sales tax. And it is as complicated as the imagination of the respective state legislatures.
Q The United States has a progressive income tax system, with your first dollar of earnings being tax-free and your last dollar earned being taxed as high as 37%. What was the highest tax rate when this progressive income tax system was first introduced in 1913?
A b. 7%. Hard to believe the federal government didn’t seem to need more taxes than this. The top tax rate did jump, however, to 77% five years later during World War I. The top individual income tax rate for 2021 is 37%.
Q Tax Day this year is May 17, pushed back one month from the traditional April 15 deadline. But the deadline wasn’t always April 15. Tax Day moved to April 15 in 1954. What day were taxes due prior to 1954?
- March 15
- February 15
- April 1
- May 15
A a. March 15. The deadline was moved from March 15 to April 15 in 1954 to give taxpayers more time to deal with the additional complexities being built into the tax law.
Q How many pages of instructions were needed for the first Form 1040 in 1913?
A d. 1. Speaking of added complexity, the basic Form 1040 instructions for the 2020 tax year has 111 pages.