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A Brief History of Tax Day

This year the IRS filing deadline does not fall on its normal gloomy day

April 15 is a day that will live in infamy. In 1865, it was the day that Abraham Lincoln died, after being shot in the head by John Wilkes Booth in Ford’s Theater the night before, less than a week after Robert E. Lee surrendered to Ulysses S. Grant at Appomattox Court House. And it was in the early morning hours of April 15, 1912 that the Titanic sunk two and a half hours after striking an iceberg, killing 1,517 and separating Jack and Rose only a few hours after they had discovered their one true love.

In America, April 15 has the further distinction of being Tax Day (at least most years). Why is this exactly? Is it because the government wanted to make sure the federal tax due date fell on an appropriately somber day? Or was it just an arbitrary decision made by a government that consistently fails to apply reasoning or foresight to its actions?

The latter, unfortunately. This is America, after all. When income tax was first introduced to America – aside from a brief cameo during the Civil War, which interestingly appears several times in our tale – the 16th Amendment adopted in 1913 designated March 1 as the day that income taxes would be due. Then when Congress passed the Revenue Act of 1918, it pushed the date back two weeks to March 15. The date changed again in 1955 when Congress made revisions to the tax code and decided to make the deadline a whole month later on April 15.

Why, you may ask. Well the government has been coy about supplying a concrete answer but the IRS has stated that it wanted to spread out tax season to make it easier to process the ever increasing number of returns flowing into the agency. It has also been suggested that the government pushed the date back so that it could hold on to refund money longer. Continue reading “A Brief History of Tax Day”

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IRS Form 4868 – How to File a Tax Extension

To get an IRS extension, file Form 4868 before Tuesday, April 17

We’re down to the last week of the tax season, and if you’re not scrambling to finish your return, you’re probably wondering, “How do I get a tax extension?”

The answer is IRS Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return]. File it by April 17 and you can get an extra six months to do your return.

You can file Form 4868 electronically. There’s no need to go through the hassle of printing it out and mailing it in to the IRS.

Plus, you can take comfort knowing that you will receive an electronic acknowledgement as soon as you e-file the form. You won’t have to deal with the stress of waiting to find out whether your request for an extension was accepted – and then scramble to get your return done if it wasn’t.

When you e-file your extension, or your actual return for that matter, be sure to have a copy of your 2010 tax return on hand. You’ll need some information, specifically your 2010 AGI, in order to verify your identity. Continue reading “IRS Form 4868 – How to File a Tax Extension”

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1099 Tax Form – What Is It?

If you received a 1099 tax form, save it. You’ll need it when filing your taxes.

If you received a 1099 form in the mail, you may not be sure what it is or what to do with it. Whatever you do, don’t throw it out. You’ll need the information listed on the 1099 when filing your taxes during tax season.

1099 forms are used to report income not included on a W-2 [Wage and Tax Statement], in other words income that is not included in wages, salaries, and tips.

The 1099 is most commonly used to pay independent contractors, such as freelancers and consultants, who are not official employees of a company.

If you received a 1099, you’ll need to report the earnings listed as self-employment income on a business tax return. RapidTax is here to help.

Variations of the 1099 Form

There are 24 different variations of the 1099 form, covering far more than just nonemployee compensation. Different 1099 forms report different types of income from interest and dividends to real estate sale proceeds and debt cancellation. Some of the most common 1099s include the following;

  • 1099-B [Proceeds from Broker and Barter Exchange Transactions] records all stock transactions and helps you report capital gains to the IRS when you file your return. Use your 1099-Bs to fill out Form 8949 [Sales and Other Dispensations of Capital Assets] as well as Schedule D [Capital Gains and Losses]. Continue reading “1099 Tax Form – What Is It?”