04/13/2021

Are You Free of Your Tax Bill for the Year?

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Tax return form with pen and calculator

This year, the IRS has extended the individual tax deadline to May 17th, but in a typical year, Tax Day would be Thursday, April 15th. On that date, the nation will still be working to pay this year’s taxes.

Every year the Tax Foundation calculates Tax Freedom Day®, which determines the day the country has earned enough money collectively to pay its total tax bill. The calculation considers all federal, state, and local taxes and divides them by the nation’s income. For 2021, Tax Freedom Day falls on April 17th. So, the average taxpayer will spend 106 days working to pay their taxes.

Of course, every taxpayer is different. Your individual freedom day can be calculated for this year once you’ve finished your tax forms. Find your adjusted gross income on your 2020 tax form. Total up your federal, state and local tax obligations. Then divide your taxes by your adjusted gross income; multiply that percentage by 365 which will give you the number of days you must work to pay your taxes. Count the number of days on the calendar and the next day is your personal tax freedom day.

The Tax Foundation is a nonpartisan educational organization founded in 1937 to educate taxpayers about sound tax policy and the size of the tax burden borne by Americans at all levels of government. For more information, visit www.taxfoundation.org.

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