© John A. Tyler
In 1913, after a constitutional amendment, an income tax was assessed against US citizens. It was not the first income tax; during the Civil War there had been an income tax of 3% on individuals having more than $600 and 5% for those with an income over $10,000. In 1895 the Supreme Court declared the tax unconstitutional which is why a consitutional amendment was required to reinstitute this method of taxation.

The income tax of 1913 consisted of 7 tax brackets, running from 1% to 7%. If you had a taxable income of $500,000 or more you had reached the top tax rate. Using the purchasing power of 2012 dollars, you would reach the top tax rate with a taxable income of $11,300,000.

Instructions for the 1913 Form 1040 show a filing deadline of March 1 following the end of the taxable year. Tax extensions of 30 days could be granted by the IRS; failure to file on time, including extensions, could result in a fine running from $20 to $1,000. if you translated these amounts to current dollars, they range from $450 to $22,500.

Section 9 of the 1913 instructions reads, “This return properly filled out must be made under oath or affirmation,” that is, notarized. It appears that either the taxpayer or a preparer could sign the return; the signatures of both did not seem to be required.

Although Federal Income Tax Withholding was included in the 1913 tax act, it was halted in 1917 and not restored until 1943 in a law called “The Current Tax Payment Act”.

In 2012, the number of tax rates are 6, beginning at 10% and going to 35% The highest rate of 35% applies to a Married Filing Joint taxpayer or Single with more than $388,350 of income.