5 Facts About Taxes That Are Good to Know

5 Facts About Taxes That Are Good to Know

In the United States, approximately 36.8% of adults get their taxes filed professionally, while the other 43% file taxes themselves. 

However, many people don’t know the truth about taxes. There are many unknown facts that Americans fail to research. 

Knowing some important facts can help you file your taxes easier each year and help you better understand the process. 

Continue reading for facts about taxes that could be useful to you in the future. 

1. Civil War Orignination

Many people do not know where the tax structure originated. One of the most fun facts about taxes is that Abraham Lincoln was the first to require an income tax. He implemented an income tax from the Northern States in 1861. 

This income tax helped fund the Civil War efforts. Abe Lincoln charged 3% for those earning more than $800 per year. However, collecting these funds was difficult, and his policy was very flawed.   

2. Tax Code

It’s no secret that filing taxes can be complicated and time-consuming. In fact, many people hire professionals to save time and avoid the process altogether. 

The main reason taxes are so difficult is that the tax code is over 74,000 pages. These pages contain detailed procedures and rules that each American must follow. Reading the entire tax code would take hundreds of hours, which is why so many prefer to hire tax professionals like Liberty Tax. You can file your taxes online or in-person through Liberty Tax, making it an excellent option for people in various situations. 

3. Changes

Another reason taxes are challenging to file is that the regulations seem to change yearly. The government edits the code after every tax season to make the system more efficient. They also do this for any tax laws changed due to the presidency or voting. 

The tax code has changed over 4,500 times since 2001. These changes can benefit or hurt taxpayers’, meaning a change is not always considered bad. Changes can be monitored with professional tax services

4. Loss of Money

In the United States, many taxpayers do not owe taxes. However, that does not mean they can’t get a tax refund at the end of each year. These people sometimes lose thousands of dollars due to not filing their taxes. 

There are multiple tax credits that these Americans qualify for. The IRS can even owe you money from previous years. However, you’ll likely lose out on it without filing taxes. 

5. Audits 

Audits from the IRS are something many Americans fear each year. Any tax errors could result in an audit, meaning you’ll need to provide proof of your earnings and deductions. Most audits are done by mail, while a small percentage are done in person. 

However, most Americans don’t need to fear an audit. Less than 1% of taxpayers are audited each year. Usually, the IRS audits those that are high earners or report no income. 

Useful Facts About Taxes

These facts about taxes should help further inform you about how they originated and where your money goes each year. 

Don’t forget to read more of our articles if you’re interested in learning additional tax trivia!