Monday, January 28, 2013

Interesting historical tax timeline

Electronic filing of tax returns has been around since 1986.  If you like history, here are a few highlights of our tax timeline.

1862 – 1st income tax signed into law by President Lincoln to help pay for Civil War expenses.
1868-1913 – 90% of all tax revenue came from taxes on liquor, beer, wine and tobacco.
1894 – The Wilson Tariff Act revived the Income Tax and the Bureau of Internal Revenue was formed.
1909 – Congress levied a 1% tax on corporate incomes greater than $5,000.
1913 – The first Form 1040 was introduced.
1918 – During WWI, the Revenue Act of 1918 imposed a progressive income-tax rate structure of up to 77% to help finance the war effort.
1929 – The income tax rate dropped sharply in post-war years, down to 24% in 1929. 
1932 – During the Great Depression, income tax rates reached 94% on all income over $200,000 in 1945.
1935 – President Franklin D. Roosevelt signed the Social Security Act into law.  This law provided retirement benefits to the primary worker. 
1942 – The Revenue Act of 1942, hailed by President Roosevelt as “the greatest tax bill in American history,” was passed by Congress.  It increased taxes and the number of Americans subject to the income tax.  It also created deductions for medical and investment expenses.
1944 – Congress passed the Individual Income Tax Act, which created standard deductions on Form 1040.
1939-1945 – During WWII, Congress introduced payroll withholding and quarterly tax payments.
1954 – The filing deadline for individual tax returns changed from March 15 to April 15.
1961 – The Computer Age began at the IRS with the dedication of the National Computer Center at Martinsburg, West Virginia.
1965 – The IRS instituted its first toll-free telephone site.
1974 – Congress passed the Employee Retirement and Income Security Act, which gave regulatory responsibilities for employee benefit plans to the IRS.
1986 – Limited electronic filing began. President Reagan signed the Tax Reform Act, the most significant piece of tax legislation in 30 years.  The Act codified the federal tax laws for the third time since the Revenue Act of 1918.
1992 – Taxpayers who owed money were allowed to file their returns electronically.
2003 – Electronic filing reached a high of 52.9 million tax returns, more than 40% of all individual returns.

Source:  IRS website

Rhonda Machalk, CPA

Tuesday, January 22, 2013

Georgia Goal: How student scholarship organizations can change the way you pay taxes

In the face of overcrowding and severe budget concerns, Georgia had to find a way to reduce the number of students in its public schools. In order to do this, the Georgia Goal Scholarship Program was instituted.  The state has set aside $51 million annually in state tax credits to allow taxpayers to redirect a portion of their own state taxes to support scholarships at private schools of their choosing through the use of qualified education expense credits.  Any Georgia taxpayer, C-corporation, or trust can participate and contribute their tax dollars and receive a 100% state tax credit up to $2,500 for a married couple filing jointly, or up to 75% of the C-corporation or trust's tax liability, to fund scholarships at the school of their choosing.  Once the cap is reached each year, no further contributions will be accepted.  If you have a school you wish to support and would like to redirect your state tax dollars, you can visit the link here to learn more.  Contact your school administrator to find out if they are involved.

Steven Voynich, CPA

Wednesday, January 16, 2013

80th anniversary fun facts (1962)

In the year, 1962 (thirty years after our founding)...

  1. The following people are born – Jim Carrey, Demi Moore, Roger Clemens
  2. Cuban Missile Crisis is averted
  3. John Glenn is 1st American to orbit the Earth – 3 times in 5 hours, 17,000 mph (wow!)
  4. K-Mart and Wal-Mart open their first stores
  5. First “pop-top” is test-marketed
  6. Marilyn Monroe is found dead of suicide
  7. 4 Brits record music for the first time, under the name “The Beatles”
  8. Johnny Carson hosts the “Tonight Show” for the first time
  9. Wilt Chamberlain scores 100 points in a basketball game
  10. Richard Nixon loses the California governor’s race, proclaiming “You won’t have me to kick around anymore, because, gentleman, this is my last press conference”
  11. The average cost of a new car is $2,924, a house is $12,550, annual income is $5,556
  12. Hit songs are “Big Girls Don’t Cry” (4 Seasons) and “Good Luck Charm” (Elvis Presley)
  13. Academy Award winner is “Lawrence of Arabia”

Meanwhile, back in Columbus… Otis LeMay and Sam Wellborn continue their separate accounting practices, with recent new partners Ross Robinson and Keith Grimes, respectively.

More to come – hope you enjoy!!

Jay Pease, Audit Partner (and Firm Historian)