Berkson Asset Management’s Blog

 1913 IRS 1040 Form

Here is the original IRS 1040 income tax form from 1913.  The form is 4 pages long including one page of instructions. In contrast, the current 1040 instructions alone run 175 pages. Passed by Congress on July 2, 1909, and ratified February 3, 1913, the 16th amendment established Congress’s right to impose a Federal income tax. However, in 1913, due to generous exemptions and deductions, less than 1% of the population paid income taxes at the rate of only 1% of net income.

Individual income tax rates started at 1% in 1913, and the maximum marginal income tax rate was only 6% on incomes above $500,000 ($11 million in today’s dollars). The personal exemption was $3,000 for individuals ($66,000 in today’s dollars) and $4,000 for married couples ($87,500 in today’s dollars), meaning that very few Americans had to pay federal income tax since the average income in 1913 was only about $750.

In his 2015 State of the Union address President Obama introduced several tax increases as well as some tax cuts. Below is a short summary of President Obama’s tax proposal and why most politicos believe it will be met with disapproval in Washington.

Read more

How much retirement income is enough and how much do you need to save for retirement?   These two short videos discuss hypothetical situations along with research on the subject to help you arrive at answers that best fit your situation.

Read more