They say that there are two certainties in life: death and taxes, and it’s true that giving the IRS their fair share is inevitable.
In fact, according to Forbes, it’s estimated that the average person pays $355,366 (adjusted for inflation) in taxes over the course of their life. And if you make $100k per year, that goes up to $1,440,013!
Considering that we pay SO much in taxes every year – whether through sales tax, income tax, state taxes, federal taxes, and more, it’s amazing how little the average person understands about our tax obligation as citizens and residents of the United States.
So, I wanted to share with you today these 10 eye-opening facts about just how big, complex, and all-encompassing our tax system is!
1. Did you know that our Federal Tax Code is an astounding 3.8 million words long? To put it in context, that’s three million words longer than the Bible!
2. To read all 74,000 pages of the tax code, it would take the fastest speed reader in the world an estimated 1,200 hours!
3. But that wasn’t always the case, as back in 1913, the U.S. tax code filled up only 400 pages.
4. Not only are the tax codes expanding and getting more complex, but they’re also changing frequently. In fact, in the last twenty years, there have been about 4,500 revisions to the IRS tax codes.
5. Are you big on Bitcoin or other cryptocurrencies? The IRS sure isn’t! In fact, they don’t even recognize crypto currency as actual currency but treat it as property, and tax it about the same as they would a stock holding – even when it’s used to purchase something!
6. Each year, an estimated 100 million individuals file income tax returns, representing about 90 percent of the total U.S. population.
7. If you live in Florida then you’re fully aware that you don’t have to pay state income taxes, just federal. But there are six other states that also have no state income tax: Alaska, Nevada, South Dakota, Texas, Washington, and Wyoming.
8. But the IRS has a long reach if you’re a U.S. citizen. In fact, you’re required to file returns and pay taxes even if you live in another country.
9. It pays BIG to be a whistleblower! Under U.S. tax laws, an individual who turns their company or employer in for tax evasion is entitled to receive 30 percent of any sum the IRS ends up collecting!
10. Of course, we’re all required to file thorough tax returns and accurately disclose all income and deductions. However, a few bad apples fail to do that in an attempt to evade their tax obligations.
None of that is breaking news, but what’s shocking is that even IRS employees have been routinely found guilty of tax evasion! A 2015 report found that about 1,600 IRS workers “willfully evaded taxes over the course of 10 years,” and most of them weren’t even fired!
If you’d like to schedule a tax consultation and get some help, click here.