No one likes paying taxes, but the good news this year is that Americans will spend one less day working to pay their taxes than they did in 2015 when Tax Freedom Day arrives.
Tax Freedom Day 2016 is April 24 — one day earlier than it was in 2015. The day is when the nation as a whole has earned enough to pay the federal, state and local tax bill for the year, according to a report by the Tax Foundation.
After April 24, any money you earn is yours to keep. It took the average person until April 24 — or 114 days into the year — to earn enough money to pay their taxes, with taxpayers in some states having an earlier payoff date and others with later dates into May.
Tax Freedom Day varies by state
Connecticut will be the last state to reach Tax Freedom Day, on May 21. Not far behind are New Jersey on May 12 and New York on May 11.
Americans will pay $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of almost $5 trillion, or 31 percent of the nation’s income.
If federal borrowing is included, which represents future taxes owed, Tax Freedom Day would be 16 days later on May 10.
The day is one day earlier this year mainly because of the Protecting American from Tax Hikes Act of 2015, which made several business and individual tax cuts permanent.
Here’s a scary fact: Collectively, Americans will spend more on taxes in 2016 than they will on food, clothing and housing combined.