The History of Income Tax by toriola1

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Virtually every taxpayer faces, at one time or another, a tax bill he cannot pay. The bill may come in response to a return you've filed, after an audit, or out of the blue years after the tax year in question. Click here to know more

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The History of Income Tax By Richard Chapo

They say death and taxes are the only two certain things in life. Alas, this wasn’t always the case. Well, at least for the income tax. The History of Income Taxes Our great nation came into existence in fits and starts. Following the revolt against the British, a federal government was elected and the fun began. This “fun” inevitably led to the situation where not everyone could agree on what the United States should stand for, much less what laws should be enacted. As a result, there was no federal income tax for nearly 100 years. Ah, the good ole days! If there was no income tax during this period, you are probably wondering how the government functioned. It did so by collecting use and sales taxes. Taxes were charged on liquor, tobacco and imports to mention just a few. Many people in our modern society would like to return to just such a system. Contrary to popular notions, the first income tax was not put into law in the early 1900’s. In fact, the first President to institute an income tax was Abraham Lincoln. In 1861, President Lincoln and Congress passed an income tax law to assist with funding the Civil War with the south. When the war came to an end, the tax was phased out. Imagine a tax being phased out now? That should bring a tear of laughter to your eye. The income tax as we know it was first instituted in 1913. Congress passed a law establishing a graduated tax rate of one to seven percent on all income taxes. I can say honestly and truthfully that I would kill to pay one percent in taxes these days. Heck, I am willing to take on the burden of paying seven percent! In establishing the income tax system, the Constitution was amended to add a 16th Amendment. This Amendment gave the federal government the right to collect taxes. The politicians primarily responsible for this were President Roosevelt and President Taft. I mention two Presidents because the bitter debate over the subject took some time to work out. If you’re looking to blame a particular political party, Presidents Roosevelt and Taft were both
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Republicans. Of course, the Democrats haven’t exactly made much of an effort to repeal the tax, so both parties deserve a whack upside the head in my opinion. Nonetheless, this is how we came to be burdened by the income tax in the United States. Richard A. Chapo is with BusinessTaxRecovery.com - obtaining tax refund recovery for overpaid small business taxes. Visit BusinessTaxRecovery.com to read more business tax articles or our new tax credits page.

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5 Reverse Tax Planning Tips By Tom Wheelwright

What is Reverse Tax Planning? Normally this focuses on reducing taxable income and taxes. Reverse tax planning does the opposite and may actually increase taxes. Why is this a good thing? If someone is usually in a high tax bracket and experiences an off year in which taxable income is low, then it means there is opportunity to use lower tax brackets. Reverse tax planning focuses on using the lower tax brackets so they don't go to waste! I have heard from many of you looking for more reverse tax planning tips, because you will have lower taxable income. So, here they are! - 5 Reverse Tax Planning Tips #1 - Consider Your Tax Elections. Usually the goal in tax planning is to take advantage of all tax elections that give you more deductions sooner. With reverse tax planning, you may want to pass on some of these elections. For example, Section 179 can provide a huge tax write-off. In a year with low taxable income, a huge write-off provides less in tax savings than if the deduction is taken when taxable income and marginal tax rates are high. #2 - Move Deductions to Next Year. Before you write that next check that is a tax write-off, ask yourself if that expense can be deferred to next year without any consequences? If it can, then hold off on writing that check until the next year. This works if you are a cash basis taxpayer. If you are an accrual basis taxpayer, as some businesses are, then hold off on incurring expenses until next year. #3 - Move Income to This Year. Call those customers who owe you money! If you are a cash basis taxpayer, collecting accounts receivable before the end of the year can be an effective way to increase your taxable income. If you are an accrual basis taxpayer, then you need to close some sales before the end of the year to increase your income. If this income goes into next year, it could mean your lower tax brackets this year go unused and the income ends up in a higher tax bracket next year. #4 - Take Advantage of Income Limitations. Many taxpayers lose tax benefits because many tax benefits phase out when income reaches a certain amount. So in a year when your income is lower than usual, you may be able to take advantage of some of these tax benefits. These tax benefits include education credits, tuition deductions, rental real estate losses, medical expenses, miscellaneous itemized deductions, and many, many more. This may be the year to make sure you qualify for these tax benefits! #5 - Plan Your Taxes for Next Year. The end of the year is a great time to start planning your tax strategy for next year. This is especially true with reverse tax planning since income and deductions are being moved in and out of the next year.

Tom Wheelwright is not only the founder and CEO of Provision, but he is the creative force behind Provision Wealth Strategists. In addition to his management responsibilities, Tom likes to coach clients

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on wealth, business, and tax strategies. Along with his frequent seminars on these strategies, Tom is an adjunct professor in the Masters of Tax program at Arizona State University. For more information, visit http://www.provisionwealth.com

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Related eBooks: 5 Reverse Tax Planning Tips The History of Income Tax in the United States of America Accounting for dividend tax credit and income tax on dividends Tax Elimination, Wealth Strategies and Your Children Is Your Child Required to File a Tax Return? Get more Free PDF eBooks at FreePDFeBooks.com Related Products: 101 tips to stay fit and live longer. Your Own Bible Research Library CB AdWords Script Disaster Preparedness and Crime Protection Manual The Public Domain Reports

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