By Doug Smith
The U.S. Federal Income Tax Code requires American
and citizens to pay a percentage of their income (earnings) to
the government. This income tax provides for the operation of
the government. The current Tax Code is found in Title 26 of
the U.S. Code of Federal Regulations (CFR), as amended.
A Clause For Alarm
The Taxing and Spending Clause of the U.S. Constitution is
found in Article I, Section 3, Clause 1. This article gave
Congress the power to impose taxes, duties, imposts, and
excises. However, Section 9 required that these taxes be
uniform throughout the country.
A Very Taxing War
In 1861 the American government imposed a personal income tax
to help pay for the Civil War. However, a federal income tax
was not feasible at that time due to difficulties in
classifying property and in the way that wages were paid.
Congress Created A Loophole
The Sixteenth Amendment to the Constitution was ratified by
States in 1913. This Amendment increased the power of Congress
to levy taxes. In summary, the Amendment gave Congress the
power to levy federal income taxes that were not uniform
all states. Furthermore, this income tax could be imposed
regardless of any census or population data.
The Modern Federal Income Tax
The U.S. Tax Code has been amended (modified) many times since
it was first approved. The tax laws and rules have grown
increasingly complex to address increasingly complex financial
and legal situations. The result is a tangle of legalese that
requires teams of trained professional accountants, computers,
or both, to understand.
Understanding The Federal Income Tax Return
Generally, American citizens have income tax deducted from
paycheck by their employers. The employers group the taxes
their company and send them to the government. Corporations
income taxes in a similar manner.
The U.S. Internal Revenue Service (IRS) requires each citizen
or corporation to make an accounting of their tax situation
once per year (usually by April 15). This accounting takes the
form of filing a tax return.
The broad purpose of the tax return is to determine whether or
not the individual or corporation has paid enough income tax
throughout the year. If exactly enough income tax was paid,
is well. If the tax return indicates that taxes were
additional tax must be paid to make up the shortfall. Finally,
if too much income tax was paid, the person or company
a refund of the overpayment, or a return of the taxes
Why A Large Tax Refund Is Bad
Many people are delighted to receive an income tax refund.
they have failed to consider is that the refund is their money
from the start. The Government has had interest-free use of it
during the past year.
Those who consistently receive large tax refunds should
decrease the amount of taxes withheld by their employers. This
action decreases or eliminates an annual tax refund, but it
puts more money in the person's pocket each month!
For More Information
The website below provides free information about income tax
preparation tips, tax assistance articles, and related
About The Author: Doug Smith provides free tax return tips and
other income tax preparation assistance at
incometax.careerdictionary.com Visit today - it's never
too late to find another deduction! © 2006 by Doug Smith.
Reprint article freely if no content is changed, copyright and
author's notices remain attached, and links remain clickable.