Federal+Income+Taxes

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Federal Income Tax

**__Definition:__** A tax levied on personal income or the income of businesses.

__**History:**__ Individual income taxes account for four out of every five federal revenue dollars. In 1913, the 16th Amendment made the federal income taxes a permanent fixture in the United States. It made them able to tax individuals and corporations. The first year that the bill went into effect was 1920, and the government made 5.4 billion dollars in revenue. In 1981, Congress put into act the larges tax cut in history, cutting approximately 750 billion dollars in six years.


 * __ Development: __** Every year, individuals or families must file their forms (usually 1040's) to show all their expenses and revenues for that year. Based on that form, taxes are taken out of their paycheck. In 1913, March 1st was the final filing deadline for U.S. citizens, but in 1945 they pushed the date back to April 15th, which is our current deadline. Just yesterday they moved the filing day back three days until April 18th, to give taxpayers an extension.

**__General Amount:__** Depends on the amount of income someone is making, if they are married/unmarried, the head of the household, and their type of income. There is a base tax added to each income bracket, when it exceeds a certain income- you get taxed. There are exceptions to people who have certain disabilities, if this the case, they would not have to pay.

**__What the $ goes to:__** The majority of the money goes to three main items- defense spending, Social Security, and health care. The chart below gives a percentage of some of the items the money goes to:

This chart shows what our federal income tax money is used for in the government yearly

__**Resources:**__ http://www.consumerismcommentary.com/federal-income-tax-brackets-and-marginal-rates/ http://www.warresisters.org/pages/piechart.htm http://www.loc.gov/rr/business/hottopic/irs_history.html http://www.unmarried.org/federal-income-taxes.html __**Group Members:**__ Luke, Steph, Emily, and Matt F.
 * http://www.msnbc.msn.com/id/18098378/ns/business-answer_desk/**