New Course! Learn to correct depreciation errors using Form 3115
Happy Extension Season! April 15th, A Ridiculous, Arbitrary, Outdated Extension Deadline

The History of April 15th

The April 15th deadline (for non-extension filers) has been in place for over sixty years. It is an arbitrary date invented by Congress in 1955, when it was changed from March 15th (the original date was March 1st).   

In 1955, the entire tax return, Form 1040 (click to see the return), including itemized deductions and available credits, was a whopping four pages long!  Now, add two more pages if you own a business or four if you own a farm (including self-employment tax).

That’s it – that’s the whole 1955 1040 Tax Library. A total of four forms and schedules:

  1. Form 1040
  2. Schedule C (self-employed)
  3. Schedule F (farmers)
  4. Schedule SE (Social Security)

In 1955, Form 1040 Instructions totaled 16 pages.   Today - with the same April 15th deadline - filers and preparers must understand over 110 pages of instructions to properly prepare their annual tax return.  And that does not include the separate instructions for any attached forms!

So, How Did April 15th Become April 15th?

In 1913, states ratified the 16th Amendment (the irony surrounding its passage is quite interesting), establishing the income tax.  This approval occurred surprisingly fast and hung on some familiar rhetoric – the income tax would only apply to the rich, who would “finally pay their fair share” back to society.   Initially, only married couples earning over $4,000 per year and single individuals earning over $3,000 were required to file and pay income tax. 

In the early 1900s, such an income placed filers among society’s elite.   For example, a highly paid union worker in 1923 (ten years of inflation and wage gains after enactment) earned about $50 per week, or $2,600 per year.   Additionally, because two-earner households were rare in the early 1900s only 1% of Americans filed a tax return in the early decades of Form 1040’s existence.

The original tax filing due date was March 1st, but it quickly became March 15th. The reasoning for a March deadline was twofold.  First, it provided the filers ample time to collect their materials and complete the simple form.  Second, and most interestingly, Congress wanted the returns (and money) before the rich fled to their summer homes or left the country for spring and summer vacations.

The Jump to 1955 & April 15th

A FOUR-PAGE 1040 WAS TOO DANG COMPLICATED.

Now, let’s fast-forward to 1955 when the due date changed to April 15th. Because of World War I, the Great Depression, and World War II, the size of the government ballooned into a miniature horror of today's.  Spending soared, and debt became a threat to solvency.  Someone needed to pay for it. Who would it be?  If you guess the middle class, congratulations!

By 1955, actual (inflation-adjusted) incomes had increased substantially along with the standard of living. As income increased, the threshold for filing Form 1040 decreased. The percentage of households required to file returns has remained close to its current level.  [Additionally, I have not researched this, but I believe it is a safe assumption that, due to social welfare payments administered through today’s 1040, a higher percentage of Americans paid income tax in 1955 than today.]

By 1955, Form 1040 had also become a much-simplified version of today’s tax return. It was only four pages but included sections for types of income, itemized deductions, and personal exemptions. It referenced tables used to calculate tax. Only two credits appeared: One for dividends and another for retirement income. Completing Form 1040 now required math skills and interpreting cross-eyed instructions, making it complex enough to hire professional assistance.

This is when Congress moved the Form 1040 nonextended due date from March to April 15th. Why did they publicly claim the additional month was necessary? FORM 1040 HAD BECOME TOO DANG COMPLICATED

A secondary reason (which may be the primary reason, not concern for voting taxpayers) for changing the due date is that the IRS was overwhelmed by the growing number of filed returns.  Employees needed additional processing time, and the law Congress to pay interest on many late-paid refunds.

If Congress cared enough about tax filers in 1955 to change the filing deadline, why has it remained unchanged for over 60 years?   Form 1040 is exponentially more complex and time-consuming today than in 1955, and most modern filers receive the necessary information to prepare it just a few weeks before the due date.   Why haven't they - at a minimum - helped to dispel extension myths and promote its role in reducing fraud, errors, and the need for amending returns?

These are legitimate questions.  Until they are answered, all we can do is educate filers about the need to change April 15th to a later date and share the importance of filing extensions.

Conclusion - Change the Date!

In 1955, Form 1040’s due date was changed from March 15th to April 15th because of the burden complexity placed on filers and IRS employees. Let’s put this burden into perspective. In 1939, the entire US tax code was 504 pages long.  By 1955, it had grown to roughly 14,000 pages.  Form 1040, including all schedules, was four pages long, plus an additional form for business owners and farmers. By 2014 (nearly a decade ago), the US tax Code had grown by over 500% since 1955 to over 70,000 pages!   According to the Tax Foundation, the code now contains over 1 million words.  For perspective, the King James Bible contains 788,280 words, Tolstoy's War and Peace has 560,000 words, and the ENTIRE Harry Potter Series has just over a million.

If you're a visual learner, the following graph (also borrowed from the tax Foundation)  may help illustrate the growing burden Congress has placed on taxpayers and the tax-pro community.  Note - The graph itself is over a decade old! 

Common sense, fairness, and effective tax administration all point to one conclusion: The April 15th deadline no longer makes sense and needs to change. I’ll let Congress haggle about the exact date, but June 15th has a nice ring. Until then, I hope my efforts have helped readers understand that filing an extension is the easiest way to cope with this antiquated and arbitrary date. They are nothing to fear and offer a bounty of benefits with minimal downside.

All courses and articles are for informational purposes only and do not constitute tax advice. Taxes are complicated - do not act on course information without consulting a professional. Always refer to treasury regulation before making any tax decision. Read the full disclaimer.

Customers Say…