Why Is April 17 the Tax Deadline?

Thank President Lincoln

Tax Deadline
••• J. D. Montgomery holds a sign on the street outside of the James C. Corman Federal Building encouraging motorist to express their anger at the Internal Revenue Service (IRS) on their final day to file 2005 income taxes on April 17, 2006 in Van Nuys, California. Photo by David McNew/Getty Images

Tax day falls on April 17, 2018. That's the deadline for filing taxes on income earned in 2017. The typical tax day is April 15 unless that day falls on a weekend or holiday. In 2018, it falls on a Sunday. On Monday, the District of Columbia celebrates Emancipation Day. On that day in 1862, President Lincoln freed the slaves in the nation's capital. Although a local holiday,

Emancipation Day affects taxes the same way federal holidays do.

Those two events push the tax deadline out to the following Tuesday, April 17. Taxpayers get two extra days to file their returns.

For those who file an extension, tax day is October 15, 2018. They must file the extension by April 17. Tax day is also the deadline for 2017 contributions to an individual retirement account.

Tax day for those who live outside the United States is June 15, 2018. The Internal Revenue Service grants them an automatic extension.

The Internal Revenue Service will start processing returns on January 22, 2018. Workers who have large witholdings on their W-2 often want to file early. They want to receive their refund as soon as possible. On average, it takes 21 days for the IRS to process the refund.

In 2017, Tax Freedom Day was April 17. Every dollar earned until that day goes to pay off that year's taxes. On average, families paid 33 percent of their total income in state, local and federal taxes.

 

History

The first tax deadline was March 1, 1913. Congress passed the 16th Amendment creating the income tax on February 3, 1913. It taxed income above $4,000. Industrialists opposed it.

Prior to that, the federal government used regressive taxes. It derived its revenue from tariffs on imports and exports.

That hurt the middle class the most. They spend more of their income on these day-to-day necessities. It also taxed cigarettes and alcohol heavily. In fact, it received 90 percent of its revenue from those two taxes alone. 

Congress created a progressive income tax because it wanted to tax everyone more fairly. It had tried a national income tax in 1894. But it was unconstitutional because all federal taxes were based on state population at that time. The only solution was to amend the Constitution, and the 16th Amendment did just that. Congress gave everyone a year plus six weeks as the first deadline. Only 358,000 Americans filed returns, which was fewer than 0.4 percent of the population.

To try and get more people to file, the Revenue Act of 1918 moved the deadline to March 15. It also imposed a 77 percent tax on the highest income. Congress needed to raise money for the U.S. involvement in World War I. It also sought to replace tariffs. World War I disrupted trade, significantly lowering the government's revenue from tariffs. The income tax was so successful that the Internal Revenue Service couldn't keep up. It hadn't finished auditing returns by the time taxes were due in 1919.

 

The Depression lowered incomes so significantly that people stopped paying taxes. Congress raised rates and cut exemptions to fund World War II. It became a patriotic duty to pay taxes. Irving Berlin wrote songs and the IRS made posters reminding people to pay. The Treasury Department began withholding tax payments from workers' paychecks. The W-2 was born. 

In 1954, President Eisenhower asked Congress to reform the tax code. Congress added deductions and credits, making it more complicated. It also pushed the tax deadline back to April 15. Why? The IRS said it would "spread out the peak workload." It could also be because, as the middle class grew, the IRS had to issue more refunds. Pushing back the deadline let the federal government hold onto tax money just a bit longer. 

Emancipation Day also affected the tax deadlines in 2017, 2016, 2012 and 2011.

It was extended to April 18 in 2017, April 17 in 2016 and 2012 and to April 18 in 2011. 

Future Tax Days

In 2019, the tax deadline will revert to April 15. It's a Monday, and Emancipation Day doesn't fall until Tuesday, April 16.

In 2020, the deadline will be Wednesday April 15. Emancipation Day is the following day. 

Tax Day will be Thursday, April 15. Emancipation Day falls on a Friday.