History of the Tax Return

Taxes are on the minds of many Americans this week as we finish the last minute details to get those returns in the mail on time. Taxes are a part of life that rolls around every year just like many other dates on our calendar but it hasn’t always been that way in the United States. 1913 was the start of the first tax return.

At this time the average annual salary was around $15,000. Before that, the beginning of the IRS came from President Abraham Lincoln and Congress who created the office of the Commissioner of the IRS to create income to support the Civil War. Throughout the years there have been more than a few changes made to tax rates and forms as well as several tax reform acts that have been passed. Income tax rates have changed 34 times in 97 years.

As of last year, 2012, the average annual income had grown to $50,502. There were 147,891,000 total income tax returns processed in 2012 with 110,471,000 total refunds averaging $2,803. Check out more fun facts below from this infographic from Liberty Tax Service on the history of the tax return.

• In 1862 President Lincoln and congress created the office of the Commissioner of the IRS
• 1864 marked the first rate increase
• 1913 was the start of the tax return
• 1915 — Form 1040A was created
• Multiple states adopted income taxes as of 1920
• Revenue Act of 1941 increases estate tax to 77%
• Tax Reform Act of 1969 nearly eliminates taxes for the impoverished
• 1981 — the first computerized tax software was invented by John Hewitt and Dan Hewitt
• 1982 — Form 1040EZ was created
• President Bush signs the Economic Growth and Tax Reconciliation Act