married couples and up to
$250,000 for single taxpayers. There is also a $600,000 estate tax exemption
and family farms and small businesses can qualify for exemption of $1.3
million. It was also at this time that the annual gift tax was corrected for
inflation.
We have come a long way from
200 years ago. From 1791 to 1802, the United States government was supported
by internal taxes on distilled spirits, carriages, refined sugar, tobacco
and snuff, property sold at auction, corporate bonds, and slaves. Now, the
government gets their review from more modern items in addition to the items
from 100-200 years ago. This includes more modern items such as commerce
transacted over the internet and plastic surgery tax.
It all started in 1791. It
started before
that really. Way before that in some form or other. It is just that things
become formal at one point. In 1862, in order to support the Civil War
effort, Congress formally enacted the nation's first income tax law and it
was a forerunner of our modern income tax.
The nation's first sales taxes were on gold,
silverware, jewelry and watches due to the high cost of the War of 1812.
This war resulted in struggles.
Individuals did not only have to worry about certain war uncertainties, but
by this time they also had to worry about complying with the government and
pay tax. During the Civil War, a person earning from $600 to $10,000 per
year paid tax at the rate of 3%.
Then In 1868, Congress focused
its taxation efforts on tobacco and distilled spirits and eliminated the
income tax in 1872.
The government has recently
become concerned with public health and has passed certain taxes on tobacco
products to discourage their consumption.
Many things have transpired
over the years in regards to taxes. For example, in 1895, the U.S. Supreme
Court decided that the income tax was unconstitutional because it was not
apportioned among the states in conformity with the Constitution.
More recently in 2004, the U.S.
was forced to eliminate a corporate tax provision that had been ruled
illegal by the World Trade Organization.
Two tax bills signed in 2005 and 2006 extended
through 2010 the favorable rates on capital gains and dividends
that had been enacted in 2003, raised the exemption levels for
the Alternative Minimum Tax, and enacted new tax incentives
designed to persuade individuals to save more for retirement.
You must use Form 1040A or Form 1040 if you
received interest as a nominee. You must also use Form 1040A or Form 1040 if
you received a 2014 Form 1099-INT of U.S. savings bond interest that
includes amounts you reported before 2014. If you owned or had authority
over one or more foreign financial accounts with a combined value over
$10,000 at any time during 2014, then you must use either Form 1040A or Form
1040 to report it.
Practically anything that you receive in exchange
for services is taxable income. You don't need to
