2018 Fun Tax Facts Infographic
2:47 AMPosted by: John S Kiernan
No one likes Tax Day, except for accountants and Uncle Sam. In fact, disdain for filling out forms and forking over funds to the government drives many of us to contemplate some pretty kooky alternatives. For example, nearly one in four Americans would get an “IRS” tattoo in return for a tax-free future, while 11% would name their first-born child “Taxes.”
It’s no wonder, either. We’ve spent billions of hours preparing trillions of dollars in payments since tax season began Jan. 29 . We’re grappling with a tax code that’s longer than all of the Harry Potter and Game of Thrones books combined. We’re scrambling to take full advantage of President Trump’s tax reforms. And to top it all off, Tax Day is a moving target. It’s April 17 this year because April 15 falls on a Sunday, and IRS offices are closed the following Monday for Emancipation Day in Washington, DC.
Fortunately, things tend to seem less scary the more you know about them. And while we experience Tax Day firsthand each year, there’s still plenty for most taxpayers to learn. So WalletHub explored this infamous date from top to bottom in search of the most interesting, revealing Tax Day fun facts. You can check out what we found in the infographic below, followed by a Q&A with a panel of tax experts. And if you’ve yet to file, make sure to check out WalletHub’s last-minute tax tips.
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Taxes, and our obligations with respect to them, are almost like living, breathing entities. The dynamics are in constant flux, which means we can never stop learning about the process. With that in mind, we posed the following questions to a panel of tax experts in search of a greater understanding of how to successfully navigate this treacherous time of year. You can check out their bios and responses below.
- How is tax day 2018 different from past years?
- Will the extended deadline – April 17 – help reduce the number of people who file late?
- Has the amount of time and money spent preparing tax returns changed in recent years? What are some tips for reducing both?
- What impact will Trump administration’s tax reform have on economic growth?
Dr. Xiaoli Yuan Professor of Accounting in the Department of Business & Economics at Elizabeth City State University
Joseph Krupka Associate Professor of Accounting in the College of Business Administration at Savannah State University
Xin Geng Assistant Professor of Accounting in the Campbell School of Business at Berry College
Carol Hughes Lecturer in Accounting at the University of North Carolina Asheville
How is tax day 2018 different from years past?
The tax cut of 2018 affects tax planning.
Will the extended deadline -- April 17 -- help reduce the number of people who file late?
No difference. An automatic extension of six months is available each year.
Has the amount of time and money spent on preparing tax returns changed in recent years? What are some tips for reducing time and money spent?
Yes. There is more time and money spent on itemized deductions.
What impact will Trump administration’s tax reform have on economic growth?
It affects 2018 tax planning through the year. Particularly for business entities.
Joseph Krupka Associate Professor of Accounting in the College of Business Administration at Savannah State University
How is tax day 2018 different from years past?
Many questions and planning needs with the new tax laws.
Will the extended deadline -- April 17 -- help reduce the number of people who file late?
Not a big issue, seems like every two-three years, it is a day or two after the 15th.
Has the amount of time and money spent on preparing tax returns changed in recent years? What are some tips for reducing time and money spent?
Costs continue to rise in my practice as to the computer tax package costs and research costs. Hard to cut time and do a quality tax return. Clients being organized is the best time-reducing area I see.
What impact will Trump administration’s tax reform have on economic growth?
So early to tell, some pockets of the U.S. will benefit. Low-income will be helped, but not as much for the middle-income, and definitely hurt the upper-income clients I have.
Xin Geng Assistant Professor of Accounting in the Campbell School of Business at Berry College
How is tax day 2018 different from years past?
Usually, the tax return due day is April 15 each year. However, since April 15 is a Sunday and April 16 is the Emancipation Day, the tax return for 2017 is due April 17 this year. My personal income sources are not very complex, so I did not notice a significant difference between what I did for my tax return this year and what I did in the past.
Will the extended deadline -- April 17 -- help reduce the number of people who file late?
Personally, I think the extended deadline has limited help in terms of reducing the number of people who file late. Here are two reasons. First, many taxpayers don't start worrying about their tax returns until the deadline gets really close. An extended deadline just gives those taxpayers a few more relaxing days. Moreover, taxpayers with potential balance due will wait until the last minute anyway. An extended deadline will just let them hold their money for a few more days and cause a late receipt of tax revenues for the federal government. Second, the reason why the deadline is extended to April 17 is because of the holidays on the 15th and 16th. People usually do not work during holidays, so I don't think the extended deadline really helps a lot.
Has the amount of time and money spent on preparing tax returns changed in recent years? What are some tips for reducing time and money spent?
The tax codes got more and more complex in the past few years, so the time and money spent should increase. However, those tax return preparation websites/software do help reduce compliance costs. Since my incomes are not very structurally complicated, I use HRBlock to prepare my tax return. It is pretty easy to navigate and the cost is reasonable (if you don't have fancy incomes). Based on my personal experiences, I have three tips for reducing time and money spent. First, always retain your old tax returns and related documents. Many times, you need to refer back to your old returns and documents in order to finalize your new tax return.
Second, if you use the same tax return preparation website/software that was used last year to prepare your new tax return, it can automatically import numbers and information from the old return to the new return when necessary. So, sticking with the same website/software can save you a lot of time. Third, some credit card companies offer tax return preparation website/software discounts to their members. Don't forget to take advantage of those exclusive discount opportunities. If you don't have any tax knowledge, maybe going to see a professional tax accountant is the most cost/time-efficient solution.
What impact will Trump administration’s tax reform have on economic growth?
There are two different opinions on this tax reform. One is that low individual and corporate tax rates will increase the net income of corporations and individuals, which in turn increase their spending. A higher spending will create new jobs and boost the economy eventually. The other one is that since the federal government is seeking to spend more and more money, lower tax revenues will increase federal deficit and then borrowings. Huge debts may be detrimental to a country's financial health. Although there is not sufficient empirical evidence available to prove the effect of this tax reform on the economic growth, I believe lower tax rates will increase spending and enhance economic growth. My personal net income has gone up a little bit since February, and I am thus willing to spend more. However, the federal government deficit needs to be closely monitored in the meantime since historically a large amount of debts could have negative impacts on the economy.
Disclaimer : Professor Geng’s opinions are his own and do not represent those of Berry College and the Campbell School of Business. Carol Hughes Lecturer in Accounting at the University of North Carolina Asheville
How is tax day 2018 different from years past?
This year, taxpayers have a lot more questions about the new Tax Cuts and Jobs Act. They want to know how it will affect them personally. One aspect they need to consider is the amount of withholdings on their W-4. The IRS has stated that some taxpayers who itemize deductions or have multiple jobs will run the risk of being under-withheld.
Will the extended deadline -- April 17 -- help reduce the number of people who file late?
Probably not. Usually, taxpayers who need a deadline extension have more complex returns or are waiting for additional information from pass-through entities in order to file, so two more days will not significantly alter their situation. For those who have procrastinated until the last minute, they may continue to procrastinate and miss the deadline, even if it is extended. Many people also have the misconception that if they owe taxes, they can postpone payment by filing an extension. This is not true and can result in failure to file and/or failure to pay penalties, so it is important to get the return and payment in on a timely basis.
Has the amount of time and money spent on preparing tax returns changed in recent years? What are some tips for reducing time and money spent?
For taxpayers who are comfortable with technology and have few complicating factors, the cost to file has dropped significantly due to the availability and ease of tax preparation software. For those having returns professionally prepared, the cost has risen and will likely continue to grow. This increase has been primarily due to the complexity of the tax code, and the need for specialized expertise. More professional time is also devoted to tax and financial planning and advising clients than in the past.
One of the most important tips for reducing time and money spent on taxes is to organize records, and double check that you have all your documents before seeing your preparer. There is still a myriad of deductions and credits available even under the new law, so make sure the preparer is aware of any circumstances that may have changed for you in the last year, or are likely to change this year.
What impact will Trump administration’s tax reform have on economic growth?
It remains to be seen. Some aspects, such as tax cuts will give taxpayers additional income to spend or save, but others, such as the ballooning deficit and inflation are a cause for concern. Tax reform will spur short-term growth, but long-run growth may not be sustainable.
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