Tax season in the U.S. is undoubtedly one of the most stressful times of year for taxpayers—especially business owners. There’s always so much to do, a million things to get ready, and even with the help of a professional tax preparer, it can be overwhelming. But the tax preparation industry isn’t completely boring. In fact, some people might even say that it borders on being interesting.
Don’t believe me?
Keep reading as I go over some of the most fascinating facts about taxes and the United States tax preparation industry.
…And while you’re here, don’t forget to register for my FREE + EXCLUSIVE online training, ‘Teach Me The Tax Game’ to learn how to increase your income with a new career in the tax preparation industry, and make $100K in just 90 days!
1: Taxes Trace Back To Ancient Egypt (3000 to 2800 BCE)
It’s true; historians have been able to trace documented records of taxes dated all the way back to ancient Egypt, around 2800 to 3000 BCE!
According to experts, every two years the pharaoh would host an event known as the Following of Horus, where he would go door-to-door to collect taxes as both head of state and the living embodiment of the god of Horus.
In fact, taxation is even mentioned in the Bible in Genesis 47:13-25 when Joseph tells the people of Egypt to give one-fifth of their harvested crops to Pharaoh.
2: The First Imposed U.S. Taxes Lead To A Whiskey Rebellion
If you’re a fan of the Broadway musical Hamilton, an emotional depiction of the remarkable life story of Founding Father, Alexander Hamilton, then you probably recall the verse, “Imagine what gon’ happen when you try to tax our whiskey!”
Cue the Whiskey Rebellion of 1794, an uprising that transpired as a reaction to the taxes Hamilton imposed on the beloved American-made spirit.
As is the case with most rebellions, people weren’t happy. This was doubly true for small-batch producers of whiskey, who, because of the implemented tax structure, were required to pay nine cents per gallon versus six cents for every gallon that larger distilleries were ordered to pay.
Tensions quickly escalated, and tax officers were attacked, tarred, and feathered for simply trying to uphold the law and do their job. Some even died in the name of taxation. Thankfully, the Whiskey Rebellion ended swiftly, and the tax remained law for another eight years in 1802 when it was nullified by President Thomas Jefferson.
3: The Federal Income Tax Was Started by President Lincoln
With the signage of the Revenue Act in 1861, President Abraham Lincoln imposed the first-ever federal income tax. In an effort to raise money for the Civil War, President Lincoln, and Congress imposed a humble 3% tax on individual yearly income greater than $800—equal to about $23,000 a year today.
The tax ultimately failed because it didn’t outline any way to enforce taxation rules. So, of course, the first version of the Revenue Act was quickly repealed and replaced with a new one that would last nearly 10 years before it was also replaced.
Fast forward a few years and finally, in 1913 with the creation of the 16th Amendment, the U.S. established the federal income tax system that we know and use today.
4: Tax Day Was Originally on March 1st
When the federal income tax was established, lawmakers initially decided on March 1st, not April 15th, as the official deadline for completion.
Naturally, there was never a real reason for choosing that day, but we assume it was to give taxpayers a little more time to organize their paperwork and double-check numbers after the end of the year.
By 1919, Congress decided to add a couple of weeks to the deadline, extending it to March 15th. Nearly 40 years later in 1955, lawmakers finally acknowledged that the tax filing process was getting more and more difficult with every passing year.
In order to integrate all the changes and give citizens ample time to file, the official deadline was again moved back, this time by a month, making Tax Day April 15th.
5: Americans Spend a Lot Of Time Doing Their Taxes
The average American spends 13 hours a year on tax planning, bookkeeping, submitting forms, and record-keeping activities. That amounts to about 6.5 million hours! And if you break down the numbers even more, you’ll also see that the amount of hours changes depending on which kind of taxes you’re trying to file.
For example, business-owning taxpayers spend approximately 20 hours working on tax-related endeavors, with an average of 10 hours spent on just record-keeping alone.
6: Taxpayers In The U.S. Get An Average Of $3,000 Back Every Year
The next fun fact about the tax preparation industry? The average refund amount comes to about $3,000 each year. Of course, this number changes a bit with the ebbs and flows of the economy, the IRS’s withholding tables, and variations in taxpayer earnings.
It’s worth noting that a significant tax refund isn’t automatically a good goal to have either—it essentially means that you gave the federal government an interest-free loan the year that you’re filing for.
7: The Majority of Americans e-File Their Taxes
Did you know that 92% of returns filed in 2023 were electronically sent? I’m guessing you were one of them. With the advances in technology and sustainability, it makes total sense. It’s also significantly easier to file tax returns using an online platform.
8: There are Nearly 300,000 Workers in the Tax Preparation Industry
According to current data, there are 296,703 people working in the tax preparation industry in 2023. That’s a lot—and with the job stability and income it offers, it’s no mystery as to why.
Not convinced? Read this article next: Seven Reasons To Consider A Career In Tax Preparation.
Build and Grow Your Own Tax Preparation Business
There isn’t much about the tax preparation industry that I don’t know. With over a decade of experience, I’ve got a lot to teach.
So, if you’ve been thinking about a career change and you have what it takes to become a tax professional, let’s connect. I’ve helped thousands of entrepreneurs start successful businesses and I can help you too.
Contact my team today to get started on the rest of your life!
…And don’t forget! Register for my FREE online training, ‘Teach Me The Tax Game’, and learn everything you need to build a successful career in the tax industry!