Tax season is a scary time! The stress of owing the government, coupled with complex filing procedures is enough to overwhelm any taxpayer. It’s even worse when you’re financially strapped and have a family. With money being a top marriage stressor, it’s not uncommon to fight with your partner during tax season.
When is Tax Day?
Quick answer: April 15.
In America, Tax Day refers to the date when individual taxes are expected by the federal government. Modern income taxes have a rich history. Although the Revenue Act of 1861 briefly introduced the federal income tax to finance the Civil War, this law was repealed shortly after and declared unconstitutional.
Another attempt at taxation was the Wilson-Gorman Tariff Act of 1894 on earnings above $4,000. The Supreme Court later pronounced this law unconstitutional since it violated the rule of apportioning direct taxes among states. However, in 1913, the Sixteenth Amendment allowed Congress to collect taxes without apportionment.
You might also ask, when is Tax Day? Initially, Congress set the tax deadline to March 1 after the Sixteenth Amendment took effect in 1913. But by 1918, the filing deadline was March 15 before moving to April 15 thirty-seven years later in 1955. Ever since, Tax Day falls on April 15, unless it’s a holiday or weekend. For example, this year’s Tax Day was April 18 because Washington D.C. was marking Emancipation Day.
What You Need to Know About Tax Day
In addition to knowing when federal taxes are due, here are other filing procedures to understand.
1. Gathering Important Documents
Whether you do it yourself or get a professional, you need the right paperwork to submit returns. For instance, you should provide personal information such as your date of birth, address, social security number, bank account, and routing number if you intend to receive refunds through direct deposit.
If you’re a parent or caregiver, your dependents’ information is also necessary during taxation. You can also get copies of the previous year’s returns to have an idea of the required documents. Don’t forget W-2 and 1099 forms that prove your income. Additionally, prepare information about your deductions, tax credits, and even losses.
2. Filing for Extensions
If you’re running out of time to file returns, you can apply for an extension by submitting Form 4868. This way, you stretch your filing deadline by six months. Remember, extensions only give you more time to file taxes, not more time to pay.
Moreover, the extension request shouldn’t come after your return’s regular due date. An extension may protect you from a 5% late filing fee each month, but it won’t erase the monthly 0.5% late charge.
3. Reporting Cryptocurrencies
The IRS treats cryptocurrencies as property, hence taxing them like other assets such as gold and stocks. Although buying and holding virtual currencies isn’t taxable, the government requires you to report other crypto transactions.
That includes selling crypto for some dollars, exchanging one coin for another, or using cryptocurrency to buy products and services. Furthermore, the IRS treats cryptocurrency as taxable income if you receive it as payment.
4. Tax Refund
According to a past survey, a section of Americans delayed filing taxes because of the stress of not getting a refund. Even so, the Internal Revenue Service (IRS) issues refunds when you overpay your taxes. Ordinarily, the IRS processes refunds within 21 calendar days.
However, it might take longer if you applied for the Additional Child Tax Credit (ACTC) or Earned Income Tax Credit (EITC). The speed of your refund also depends on the channel you use to receive it. Direct deposits are faster than mailed checks.
Avoid the Last-Minute Rush
Tax Day is less stressful when you prepare. Instead of postponing your tax obligations, you can break them down into manageable tasks until everything is done. You could also ease your workload by using a tax professional or software.
Like what you see? Get more content sent directly to your inbox! Sign up for the Money Vehicle Movement Newsletter!
And check out our white paper: “Strategies for Increasing Financial Literacy Rates Among High School and College Students”
More from Money Vehicle:
One response to “When is Tax Day, and What Do I Need to Do?”
[…] Tax filing can be hectic. If you make a mistake, you can miss out on money-saving opportunities and even get into trouble with the government. Although you can submit returns by yourself, there are several free and paid programs to ease your burden. All you have to do is gather the necessary documents and start filing. […]