For better or worse, taxes are something working Americans just can't avoid. But how much do you really know about taxes? Here's a list of facts that might enlighten you.
1. The tax code is over 74,000 pages long
There's a reason so many people pay professionals to prepare their taxes. The actual tax code itself is so long that it would take even a super-fast reader more than 1,200 hours to get through it all. But it wasn't always so detailed. Back in 1913, the tax code was a mere 400 pages long.
2. Since 2001, there have been more than 4,500 changes to the tax code
A big reason why the tax code is so extensive is that its rules are constantly being updated. Case in point: Over the past 15 years, there have been more than 4,500 adjustments made. Some of these changes, however, work out in taxpayers' favor, such as when new credits are introduced.
3. Taxpayers lose out on millions by not filing returns
Many workers who don't owe taxes neglect to file returns, not realizing that there are a number of tax credits that offer refunds. The Earned Income Tax Credit, for example, offers up to a $6,318 refund for folks who don't owe taxes, yet an estimated 20% of eligible filers fail to take advantage of it. What many people also don't realize is that you have up to three years past the filing deadline to claim a refund from an unfiled tax return, so if you think the IRS owes you money from a previous tax year, it pays to act. In April 2016, taxpayers officially gave up $950 million in refunds from the 2012 tax year. And that's a lot of cash to forego.
4. Americans must work 114 days into the year to afford their tax bills
And that's kind of a depressing statistic. It also means that workers may be overlooking a number of key deductions that could lower their collective tax burden.
5. An estimated 44% of Americans pay no federal income tax
And it's not because so many people cheat on their taxes. Rather, the IRS offers a number of tax breaks to lower earners, and as a result, many are able to wipe out their tax liabilities completely.
6. More than one-fifth of paper tax returns contain errors
The IRS reports that while the error rate for electronically filed returns is less than 1%, paper filers are 21 times more likely to make a mistake. Errors can cause tax returns to get audited or rejected, so you're better off filing electronically and lowering your risk. If you earn less than $64,000 a year, you can file your return electronically for free.
7. Less than 1% of tax returns get audited
Though many taxpayers live in fear of an audit, the vast majority of returns are never questioned. Of those that are audited, about 75% are done via mail, which means most people never face the dreaded in-person IRS inspections you see depicted on TV. Though high earners are more likely to get audited than middle-income tax filers, those who report no income also have an increased risk.
8. A good 17% of workers violate the tax code when filing their returns
Given how complex (and, ahem, lengthy) the tax code is, it's not surprising to learn that close to one-fifth of taxpayers fail to comply with the rules. That said, the majority of these so-called violations are treated by the IRS as honest mistakes. Of those who don't manage to follow the rules, a mere 0.0022% are actually convicted of tax crimes.
9. Only 30% of households itemize deductions
Deductions are designed to help workers lower their taxable income, and some of them can be quite lucrative. For example, you can write off your mortgage interest in its entirety provided your loan doesn't exceed $500,000 if you're a single tax filer, or $1 million if you're a couple filing jointly. You can also take deductions for property taxes, charitable contributions, and medical expenses that exceed 10% of your adjusted gross income. Despite these allowances, many taxpayers come out ahead by taking the standard deduction, which is far less complicated and time-consuming to calculate.
10. IRS employees also break the law
When we think about tax evasion, we tend to picture rich celebrities hiding loads of income. But back in 2015, a report found that close to 1,600 IRS workers willfully evaded taxes over the course of 10 years, most of whom were not actually fired. And while it's a small percentage of the agency's employees -- roughly 160 workers per year out of 85,000 -- it hardly works wonders for the IRS's image.
There's a lot to learn about taxes, so if you're curious to know more, check out this list of some of the weirdest state tax laws on the books. You'll have a laugh and further your tax education in the process.
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