Why Do Americans Pay Taxes on April 15?

The Federal government needs money (revenue) to pay for everything on its budget. Today, the government spends the vast majority of tax dollars (about 84 percent) on six major budget items:

The other 16 percent is split among other investments in education, scientific research, roads and bridges, the environment and international aid [source: Center on Budget and Policy Priorities].

Before 1913, the government generated revenue chiefly through excise taxes (taxes on the sale of particular goods like alcohol and tobacco) and tariffs on imports. But that still left the government in debt, especially in times of war. Many politicians saw a permanent income tax as the solution. Adding to the momentum for the income tax was increasing income inequality between a few super-wealthy industrialists and the common worker [source: Tax History Museum]. Congress passed a bill in 1894 establishing an income tax of 2 percent on income above $4,000, but the law was struck down by the Supreme Court as unconstitutional. It took the 16th Amendment to overcome the Court's opposition.

Soon after the passing of the 16th Amendment, Congress named March 1, 1914, as the first Tax Day. Why March 1? It fell roughly one year after the 16th Amendment was enacted [source: Sung]. The Bureau of Internal Revenue created Form 1040 to file and pay personal income tax, which was 1 percent for income under $3,000 ($4,000 for married joint filers) and up to 6 percent for the wealthiest Americans [source: Tax History Museum].

Tax Day was moved to March 15 in 1918 and then again to April 15 in 1955. The official reason for the pushback was to spread the workload of IRS employees, but some economists speculate that a later filing date means the government can wait even longer to pay refunds [source: Sung]. The longer the IRS can hold onto the money it withholds via payroll taxes, the more interest it earns.

But even the April 15 due date can shift a little. In 2005, the District of Columbia enacted Emancipation Day on April 16 to commemorate the day Lincoln signed an 1862 law freeing the first slaves in Washington, D.C. When April 16 falls on a Saturday, the holiday is officially celebrated on Friday, and when it falls on Sunday, it's celebrated on Monday. The IRS can't force people to file taxes on a holiday (even a local one) or the weekend. That's why Tax Day was on Tuesday, April 18 in 2023: Sunday the 16th was technically Emancipation Day but it was celebrated on Monday the 17th.

There was a small caveat, however: If you submitted IRS Form 4868 on or before April 15, you got an automatic six-month filing extension. But that didn't mean you didn't have to pay any taxes you owe by April 15. According to the IRS, you needed to estimate what you owed and pay that amount on April 15. If you paid too much, the IRS refunded you the difference when you filed. If you paid too little, you could make up the difference when you file. But if you didn't pay anything, the IRS charged interest (plus a late payment penalty) on what you owed, starting on April 16 [source: IRS].