Tax Freedom Day for the country was on April 18, 2013. This is the day when, on average, taxpayers have paid all of their taxes for the year and now begin to keep what they earn. Tax Freedom Day in 2013 was 5 days later than last year. This is partially due to the American Taxpayer Relief Act passed in late December 2012.
Tax Freedom Day
The Tax Foundation calculates Tax Freedom Day. The State of Mississippi is the winner here. They get to celebrate Tax Freedom Day on March 29th. According to the Tax Foundation, “Americans will spend more in taxes in 2013 than they will spend on food, clothing and housing combined.” Think about that for a minute. Tax Freedom Day does not include the current federal deficit. If this was included Tax Freedom Day would be extended to May 9th. This would add another 21 days.
Here is a breakdown of the type of taxes and number of days:
* Federal Income Tax 32 Days
* Federal Social Security Tax 24 Days
* Property Tax 12 Days
* Sales / Excise Tax 12 Days
* State Insurance Tax 3 Days
* Miscellaneous Tax 5 Days
To put this in perspective, Tax Freedom Day in 1900 was January 22nd. In 2000 it was May 1st.
Connecticut Taxpayers
For Connecticut taxpayers Tax Freedom Day is May 13th. This is extended from May 5th in 2012. Connecticut comes in first, or last…depending on how you look at it. Connecticut comes in first with the highest tax obligation of all of the states. Therefore we get to celebrate this day last. Said differently, Connecticut taxpayers will have to work 133 days to pay their taxes. Compare this with the national average of 108 days or with the lowest, Mississippi mentioned above at only 88 days.
Where Do We Go From Here?
Enjoy Tax Freedom Day. You deserve it. More importantly Connecticut taxpayers need to be vigilant here. This is NOT the contest you want to “win.” Meet with your CPA to discuss your tax planning. Here are Fifty Shades of Tax Deductions. Pick out the ones that would be appropriate for you.
Happy Tax Freedom Tax Connecticut Taxpayers!
Anyone want to go to Happy Hour?
Photo From Creative Commons
Tom Scanlon has over thirty years experience in public accounting with an extensive background in the areas of financial, tax, and estate planning. He prides himself on providing in-depth and customized solutions to privately held businesses and their owners. He is a Certified Public Accountant and Certified Financial Planner®. Tom is a frequent speaker for area organizations and has recently been quoted on CNBC, Fox 61 News and AARP's blog. Tom also has been a guest columnist for numerous publications including The Wall Street Journal, Barron's, Money Magazine, The Hartford Courant, The Hartford Business Journal, and The New Haven Register. He is a member of the American Institute of Certified Public Accountants, the Connecticut Society of Certified Public Accountants, and the Financial Planning Association. Active in the community, Tom supports a variety of not-for-profit organizations.
