Tax Freedom Day is Almost Here
April 19 is the Day We Finally
Start Working for Ourselves!
Jackie Himes, CPA, Tax Manager
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Focused on You. Dedicated to Your Success.
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April 16, 2018
Tax Freedom Day® is the day when the nation, as a whole, has earned enough money to pay its total tax bill for the year. The
Tax Foundation
takes all federal, state, and local taxes, as well as payroll, sales and excise, corporate and property taxes, and divides them by the nation’s income to determine when Tax Freedom Day is each year. The official Tax Freedom Day doesn't include government spending, only government revenue.
This year, the national Tax Freedom Day falls on April 19, 109 days into the year. That's three days earlier than last year thanks to the Tax Cuts and Jobs Act (TCJA). Even so, if the budget deficit is factored into the equation, which represents future taxes owed (expected to hit $806 billion in 2018), Tax Freedom Day would be May 6, just one day earlier than in 2017.
Americans will pay $3.39 trillion in federal taxes and $1.80 trillion in state and local taxes in 2018, for a total tax bill of $5.19 trillion, or 30% of national income. U.S. citizens will spend more money on taxes this year than on food, clothing, and housing combined.
According to
The Balance
, Americans work the month of January to pay off federal income taxes, February for state income taxes, Social Security, Medicare, and other payroll taxes, March for property taxes, as well as state and local sales and excise taxes, and part of April to pay corporate income taxes (through higher prices), motor vehicle license taxes, severance and estate taxes.
Tax Freedom Day may come sooner or later depending on where you live. For example, Tax Freedom Day fell on April 12 for residents of Delaware, April 19 for Pennsylvanians, May 3 for New Jerseyans, and May 14 for New Yorkers.
The latest Tax Freedom Day was May 1, 2000. Americans paid 33% of their total income in taxes that year. A century earlier, in 1900, Americans paid only 5.9% of their income in taxes and Tax Freedom Day fell on January 22.
Your personal Tax Freedom Day may be different depending on your situation. You can use this
calculator
to determine your personal Tax Freedom Day.
It is expected that Tax Freedom Day will be even earlier in 2019 due to TCJA.
Feel free to call any member of our team at 610-828-1900 with questions. You can also contact either Jackie Himes, CPA, tax manager, at
[email protected]
or myself at
[email protected]
. We are always happy to help.
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Martin C. McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company, PC
Disclaimer
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This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
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