Who doesn’t love tax season? All those wonderful tax codes…millions of tantalizing words detailing obscure taxation rules…keeping up with the nearly 5,000 changes that have occurred over the last decade plus…doesn’t it all sound so amazing?
Maybe we are a little different here at the offices of Abigail Y. Murray, CPA, LLC, but it’s only because we are absolutely motivated to helping our clients limit their tax liability and enhance their refund. While we may be passionate about accounting and taxes, we’re not anything like these crazy tax facts:
- The US internal revenue code is 2.41 million words alone! That’s not including 7.66 million words of tax regulation. Shakespeare’s works don’t even reach a million words all together. Sorry Bill.
- There’s no place like Texas. Cowboy boots are exempt from sales tax. Yeehaw!
- If someone reports their company for tax evasion, they can receive 30% of the amount collected. Um…but you didn’t you hear that from us.
- Don’t you miss the good ol’ days, like 1913 when the federal tax code was only 400 pages long? Now it’s over 70,000.
- Remember Albert Einstein? The guy who figured out General Relativity? He once said: “The hardest thing in the world to understand is the Income Tax.” Well, in his defense, he didn’t have the help of Abigail Y. Murray CPA.
- The instructions to complete the basic 1040, is over 105 pages. Maybe that’s why the majority of Americans think the federal tax code is too convoluted.
- Speaking of forms and instructions, you can download close to 2,000 tax-related forms and files from the IRS website. Hope your printer has enough ink.
- The first income tax law was imposed in 1861 to help pay for the Civil War. The current income tax system was placed into law in 1913, before the start of World War I.
- Sorry to say, but in 2009, Bank of America had an income of $4.4 billion. They didn’t pay a single penny in income tax.
- The average American spends 13 hours getting their tax return ready. In 2011, the National Taxpayers Union stated that U.S. taxpayers spent more 6.1 billion hours complying with federal tax regulations (and that number has gone up since then)—because why not.
- Warren Buffett has revealed that his adjusted gross income in 2015 was $11,563,931 and his federal income tax for the year was $1,845,557. That’s a tax rate of 16%. He’s commented several times on how his tax rate is lower than his secretary’s, which depending on how much she earns, is highly plausible.
- The United States taxes citizens on what they earn in foreign countries, even if they aren’t planning on coming back—and we’re the only country in the world to do it.
- American’s spend over $27.7 billion doing their taxes.
- Foreign countries have created tax havens for US corporations. The city of Zug, Switzerland has a population of 26,000 people, but is the headquarters for over 30,000 companies.
- There has been no known civilization that has not taxed its populace.
- In 1987, about 7 million children vanished. That was the year that the IRS started requiring taxpayers to list the Social Security Numbers of their children on tax forms. We wonder where all those children disappeared to.
- Tax evasion cost the federal government $458 billion a year between 2008 and 2010. Unfortunately, only $52 billion is expected to be recovered each year. Still, 81.7% of taxes owed make it to the IRS.
- More than 16 million individuals and businesses owed the IRS $373 billion in unpaid federal taxes in 2011.
And one more for the road…
- The Savers Tax Credit is an exceptional tax credit designed to help lower-income families contribute to retirement plans. If you qualify, this credit will allow you to write off money you put into your retirement plan—from a 401K to a traditional or Roth IRA.
The adjusted gross income (AGI) limits for this credit are:
- Single: $30,750 in 2016 and $31,000 in 2017
- Head of household: $46,125 in 2016 and $46,500 in 2017
- Married and filing jointly: $61,500 in 2016 and $62,000 in 2017
Your credit will be 10%, 20%, or 50% of your contribution, depending on your AGI.
Want to learn more interesting tax facts and tips for optimizing tax deductions? Contact Abigail Y. Murray CPA today!