Income Tax Forms: 1913 vs. 2018


Every year, each individual must fill out the infamous 1040 form, and possibly a host of additional forms relating to investment income, itemized deductions, partnership returns, retirement benefits, etc. As a result, accounting practices experience their "high season" during prime tax filing months. Meanwhile, everyone else's stress levels also spike.

It was not always that way though. When the 16th Amendment was ratified, and the income tax first levied in 1913, the 1040 form was merely four pages; quite simple enough for a person to do on his or her own.

Here's a picture of the first page of that form:

Now compare that with the first page of the 1040 form for 2018:

Economics professor Mark Perry tells it this way.

“In the beginning” when the US federal income tax was first introduced in 1913, it used to be a lot, lot simpler and a lot easier to file taxes; so easy in fact that it was basically like filling out your federal tax return on a postcard.

For example, page 1 of the original IRS 1040 income tax form from 1913 appears above. There were only four pages in the original 1040 form, including two pages of worksheets, the actual one-page 1040 form above, and only one page of instructions, view all four pages here. In contrast, just the current 1040 instructions for 2017, without any forms or schedules, runs 107 pages (forms and schedules are available separately here and here).

The tax rates were also much lower at the start. In 1913, the lowest rate was just 1 percent, and the highest marginal rate was 7 percent on incomes above $500,000 (about $12.7 million today). The personal exemption was $3,000 for individuals ($76,000 today), and $4,000 for married couples ($102,000 today). Most people did not pay any income tax, though, because the average annual income was about $750.

Consider the rates and brackets for tax year 2017 (via the Tax Foundation):

How things have changed over the course of a century!