Happy 100th Birthday, Income Tax!

Income Tax Happy BirthdayOn Sunday, the Sixteenth Amendment, the one that laid the groundwork for a permanent federal income tax, celebrated its 100th birthday. Needless to say, not everybody was lining up to celebrate. In Forbes, wealth manager David Marotta used the anniversary as an opportunity to exhort readers to "Let the Income Tax Die at 100." Meanwhile, over at The Global Dispatch, Robert Harriman paired anti-tax quotes from a trio of Founding Fathers with a pro-tax quote from Karl Marx.

Even the biggest fans of the income tax system are generally quick to admit that they don't really like paying taxes, and some of its most furious foes have gone so far as to claim that the Sixteenth Amendment was never actually ratified. But whether you think federal income taxes are an unconstitutional power grab or, as Ray Raphael argued in Article 3, a natural progression from the property-based tax system that existed almost since the country's founding, one thing is certain: If it weren't for the federal tax system, America would never have been able to reach its current position in the world.

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The interstate highway system that was key to America's postwar dominance? Fully 90 percent of it was funded by federal income taxes. The space exploration program that put the American flag on the moon? That money came from income taxes, too. The same goes for the standing army, the EPA, the Food and Drug Administration, and hundreds of other programs, large and small, that help keep Americans healthy, educated, and protected. And, as we've seen recently, reduced tax revenue makes it much harder to keep those programs operating.

As for all those entitlement programs that have gotten so much criticism in recent years, they're paid for through taxes as well. And, lest we wonder how Medicare and unemployment, WIC and student loan programs help keep America strong and safe, it's worth remembering that a healthy, well-educated work force is the key to keeping -- and, hopefully, strengthening -- America's place in the world.

So, while Feb. 3 may not quite rank with July 4 among our favorite days to celebrate, it's worth remembering that it's a key part of how we rose to become the most powerful nation in the world. So, without a hint of irony, here it is: Happy Income Tax Day!

And here (courtesy of our friends at Americans for Tax Reform) are a few fun facts about income taxes:

  • Top tax bracket in 1913: 7%
  • Top 1913 tax bracket threshold, in today's dollars: $11.6 million
  • Top 2013 tax bracket threshold: $450,000
  • Total number of 1040s filed in 1913: 358,000
  • Total number of 1040s filed today: 140 million
  • Total pages in the 1913 tax code: 400
  • Total pages today: 73,954

Tax Tips for Real Estate Agents and Brokers

Most real estate agents and brokers receive income in the form of commissions from sales transactions. You're generally not considered an employee under federal tax guidelines, but rather a self-employed sole proprietor, even if you're an agent or broker working for a real estate brokerage firm. This self-employed status allows you to deduct many of the expenses you incur in your real estate sales or property management activities. Careful record keeping and knowing your eligible write-offs are key to getting all of the tax deductions you're entitled to.

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What is the Educator Expense Tax Deduction?

The Educator Expense Tax Deduction allows teachers and certain academic administrators to deduct a portion of the costs of technology, supplies, and certain training. Here’s what teachers need to know about taking the Educator Expense Deduction on their tax returns.

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Self-Employed Less Than a Year? How to Do Your Taxes

Have you been self-employed less than a year? If you’re just starting out, it’s possible you worked at a job earlier in the tax year before making the switch to self-employment, or you’re working multiple jobs. In this case, you may have more than once source of income you’ll need to report on your income tax return.

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Taxes for Grads: Do Scholarships Count as Taxable Income?

Heading off to college to broaden your horizons is exciting, but funding your education via scholarships? That's even better. Scholarships often provide a path to education that might not be feasible otherwise, which is why the Internal Revenue Service (IRS) can be generous in minimizing students' tax obligations. But sometimes scholarship money does count as income, and it’s better to find out now if your scholarship adds to your tax liability than to have a surprise later. Here’s how to decode your scholarship taxation.

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Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.

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