Tax day is upon us
Tax Day 2020 has arrived, and you’ll have to be sending in those returns with payments or seeking an extension at the end of the day on Wednesday.
It’s later than normal this year, with the traditional filing date of April 15 being moved to Wednesday as a result of concerns brought on by the coronavirus. You are required to either file your return or ask for an extension by Wednesday’s deadline or face a penalty. According to The Associated Press, the IRS expects individuals to file about 150 million returns, and about 139 million have been filed.
While no one likes to have to pay taxes, there is at least the knowledge that we’ve already passed Tax Freedom Day.
Tax Freedom Day is calculated by the Tax Foundation, a nonpartisan think tank based in Washington that was founded in 1937. It researches and informs citizens and government about tax policies. It is the date upon which all of the nation’s taxes would be paid for the full year (if all the wages earned were going solely into taxes first.) The calculation is made by dividing all the local, state and federal taxes by the nation’s income.
While information for 2020 was not available, it’s likely the dates did not vary much from 2019. For Ohio residents, that day fell on April 14. The day came a little bit earlier in West Virginia — April 10 — and a little bit later in Pennsylvania — April 16.
According to the Tax Foundation, Tax Freedom Day for the nation in 2019 came 105 days into the year, on April 16, 2019. If federal borrowing is included, the day would have fallen on May 8.
Looking back at the past several years, Tax Freedom Day fell on April 19 in 2018 and on April 23 in 2017 and on April 24 in 2016 and 2015.
In higher-income, higher-taxed states, wage-earners work for the government longer. Tax Freedom Day in 2019 came in Connecticut on April 25, in New Jersey on April 30 and in New York and Washington, D.C., on May 3. Meanwhile, the lowest average tax burden falls to Alaska, which set its wage-earners free on March 25.
Taxes as a take balanced against income were at their longest period in 2000, when Tax Freedom Day occurred May 1.
But in 1900, more than a decade before the federal government established an income tax, Tax Freedom Day occurred Jan. 22.
It is projected that in 2019 Americans paid $3.4 trillion in federal taxes and $1.8 trillion in state and local taxes, for a total bill of more than $5.2 trillion, or 29 percent of the nation’s income.
It’s all something to ponder as you make those final plans to file your return on Wednesday. And if it makes you sleep any easier, know that if you were able to pay every single one of your taxes for 2020 in one lump sum and you live in our Tri-State Area, you would have been working for yourselves for the past three months.