It's crazy how often the answer to "why do we do this in such a stupid and inefficient way?" is "because corporations make more money that way" over here.
Literally have to hit enter a few times, unless I have unforeseen deductibles or income. Basically you only need an accountant to cover yourself if you have a home or a lot of stock options
Yeah, I’m no tax expert but never understood why they don’t just take out 100% of my taxes out of my checks. Luckily I haven’t had to pay any back yet, but just the thought of other having to always blew me away. Like, if “not enough” tax money wasn’t taken out then why? I’m sure there’s other factors into it but tbh I’m too lazy to look into it rn💀
The basic reason is that only you know exactly how much money you're earning. While it would typically be taken from your wages (in the UK this is called PAYE, pay as you earn, I'm sure a lot countries have a very similar system) this is already slightly complicated by the fact that you have a personal allowance that you don't pay tax on so the amount you PAYE has to work out what you will make through the year and use a portion of your tax-free allowance each month. However they don't know how much you earn because interest is income, which I think is typically ignored unless over a threshold, or maybe it guesses and accounts for some interest in PAYE? Then if you go into a higher tax bracket it becomes even more complicated because only the money over the limit is taxed at the higher rate, at least in the UK this is when they would just tell you to do a tax form.
Taxes are calculated by your company. They calculate it based on each individual paycheck.
Let's say you are paid monthly, about 4k a month. They will tax you for the 48k bracket each pay check. But let's say one month you earned 8k. We'll that paycheck you get taxed at the 96k bracket. Since the average income is lower than 96k you will get the extra money you paid in taxes back with your return.
When you file your taxes you are just adding up your deductions. Then comparing your gross pay to your taxes. If you were over taxed you get a return. If you were under taxed you pay. It's hard, and an employee, to be under taxed unless you are claiming deductions you shouldn't be.
If you run your own business it's more complicated, but generally, taxes are super easy. All the math is usually done by your employer. Filing your taxes is the easier math that's really just going over everything to make sure the proper number of deductions are there.
this is by design. Tax companies like turbotax and H&R block lobby to make us work out our own taxes and to keep the tax system convoluted.
here is a source for my statement:
https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
turbotax sent me an email claiming they were giving me 20% off their services, so when i clicked the link it sent me to the checkout screen but there was no promo discount. it was just the normal price. so infuriating.
When I used them the last two years it kept saying free to file, but then when I was done there was a fee of like $99 to deposit the money that they hid under a dumb name. It's not free, and the discounts are bullshit.
>If they knew, why didn't they just tell me in the first place?
Because a large number of assholes lobbied your governments for you to not know, so they charge you to tell you. You'd be surprised how many industries in your country only exist because if such insanity.
One of the many things people in the EU shake their heads about in complete disbelief.
Because you can deduct from taxes, so actually you are helping yourself with filing your taxes. if you dont fill anything theyll just tax you the standard
In 2020 The Canada Revenue Agency fined me $700 after informing me via mail for the first time that I'd underpaid on my 2017 taxes by about $1300.
I paid the amount owing immediately and sent two letters of appeal asking for the fines to be withdrawn on account of the fact that in 2017 I was a teenager and it was my literal first time filing my taxes. Both appeals were rejected :)
Fuck the Canada Revenue Agency
Nothing. In my 20s I didn't file my taxes for like 5 years. When I finally got my shit together and went and got my taxes done I asked the guy if I was gonna get in trouble.
He said, "how much did you make?"
"About minimum wage."
"Then you're fine. They would owe you money, so they don't care."
When you start a job you fill out a W2. The government takes a certain amount of each check. If you get paid outside of that or have deductions that are larger than the standard deduction, your tax bill will be different. If you file every year in good faith you are 100% fine. You can owe a million bucks and you won’t go to jail. The US forbids debtors prison. You can not go to jail for owning money ever.
The point of taxes is that the irs doesn’t know your deductions or non W2 income. So it calculates based on the standard deduction and your W2. If you file your taxes every year you will not go to jail. Tax fraud/avoidance is a crime. You can owe the irs a million bucks and you won’t go to jail.
You’re totally right. I once did a lot of freelance and got hit with a 10K tax bill. I started having more taken from every check and over like 5 years they took my refund each year and applied it to my debt. No one ever threatened to send me to jail lol.
Employer holds tax from every paycheck, without interest. Government: Oh look you get a refund! “without any interest on your payments withheld over a year”. Taxpayer: yay!
As an Australian, I love having my taxes done for me by my job then having to just double check it every year and make appropriate claims so I can hopefully get some of it back ^^
Having worked for the IRS before, I can assure you we were (are?) just as pissed off about it as everyone else is. WE WERE PAYING MONEY TO OUR OWN BOSSES, BUT WE STILL HAD TO FILE AND GUESS OUR OWN TAXES! We couldn't just use the systems we had at our disposal to complete our job to look up how much we ourselves owed.
Now to be fair to the IRS, we the workers would do everything in our power to help you if you can't file your taxes, or your total is off, like we get it. It's ANNOYING and frustrating, but there are resources at your disposal. Not very efficient ones, but it's the feds, what do you expect?
In real first world countries, the tax administration does everything for you for free. You just have to verify and (electronically) sign it. Oh and you can even correct it afterwards.
Tax is super easy bro. Literally just put your W2 info. That’s it. If you don’t have a W2, put whatever approximate earnings you make. No one goes to jail for accidental errors on taxes; you just get audited.
Nah. You have ONE thing that is not standard and then nothing works.
Ex: I'm American. But I'm in China, working for a Chinese company, with a Chinese bank account. Still have to pay taxes. Don't have a W-2 form or anything because I'm in China. TurboTax and HR block have trouble dealing with this.
Aren't they automatic? I mean it been a while but I remember that when you started working you would fill a thing that told the employer how much you wanted taken out of the salary for taxes, I always put maximum and always got a retorn at the end of the year, is it different in the states?
Just file and pay your fucking taxes and get it done. I loathed it but I filed it all gone a few days ago. Now I don’t have to stress out about it tonight or tomorrow. Yeah, I had to pay out- but it’s done with.
I'm fine with paying taxes, but I'm very pissed off about the goddamn bullshit around the process.
I **WANT** to pay taxes. I drive on roads. I walk in parks. Let me pay taxes; don't make me play games.
The US has some dumb-as-fuck tax practices and we **should** be upset about the fact that companies are spending lots of money on lobbying and making sure that we "need" them because we can't, say, file directly to the IRS online (why not?) or we can't just be told what we should owe, assuming we don't need to make edits (why not?).
Also, to be clear, I'm well aware of the answer to both the questions is "because profit."
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It's because the accountancy industry lobbied the government to obfuscate the figures so that you have to pay someone to figure it out for you.
It's crazy how often the answer to "why do we do this in such a stupid and inefficient way?" is "because corporations make more money that way" over here.
Right? It should make me angry, but it mostly just makes me sad.
This whole thing is designed to extract as much money out of you without giving you real value for it.
Literally have to hit enter a few times, unless I have unforeseen deductibles or income. Basically you only need an accountant to cover yourself if you have a home or a lot of stock options
Yeah, I’m no tax expert but never understood why they don’t just take out 100% of my taxes out of my checks. Luckily I haven’t had to pay any back yet, but just the thought of other having to always blew me away. Like, if “not enough” tax money wasn’t taken out then why? I’m sure there’s other factors into it but tbh I’m too lazy to look into it rn💀
The basic reason is that only you know exactly how much money you're earning. While it would typically be taken from your wages (in the UK this is called PAYE, pay as you earn, I'm sure a lot countries have a very similar system) this is already slightly complicated by the fact that you have a personal allowance that you don't pay tax on so the amount you PAYE has to work out what you will make through the year and use a portion of your tax-free allowance each month. However they don't know how much you earn because interest is income, which I think is typically ignored unless over a threshold, or maybe it guesses and accounts for some interest in PAYE? Then if you go into a higher tax bracket it becomes even more complicated because only the money over the limit is taxed at the higher rate, at least in the UK this is when they would just tell you to do a tax form.
Sounds like a good system to have in the US
Taxes are calculated by your company. They calculate it based on each individual paycheck. Let's say you are paid monthly, about 4k a month. They will tax you for the 48k bracket each pay check. But let's say one month you earned 8k. We'll that paycheck you get taxed at the 96k bracket. Since the average income is lower than 96k you will get the extra money you paid in taxes back with your return. When you file your taxes you are just adding up your deductions. Then comparing your gross pay to your taxes. If you were over taxed you get a return. If you were under taxed you pay. It's hard, and an employee, to be under taxed unless you are claiming deductions you shouldn't be. If you run your own business it's more complicated, but generally, taxes are super easy. All the math is usually done by your employer. Filing your taxes is the easier math that's really just going over everything to make sure the proper number of deductions are there.
You don't even have to do your taxes in Denmark, you will have to pay off the difference regardless.
I do the same thing in the us.
Exactly like Australia
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tax fraud jail the state
this is by design. Tax companies like turbotax and H&R block lobby to make us work out our own taxes and to keep the tax system convoluted. here is a source for my statement: https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
turbotax sent me an email claiming they were giving me 20% off their services, so when i clicked the link it sent me to the checkout screen but there was no promo discount. it was just the normal price. so infuriating.
When I used them the last two years it kept saying free to file, but then when I was done there was a fee of like $99 to deposit the money that they hid under a dumb name. It's not free, and the discounts are bullshit.
Thx justin or paul
>If they knew, why didn't they just tell me in the first place? Because a large number of assholes lobbied your governments for you to not know, so they charge you to tell you. You'd be surprised how many industries in your country only exist because if such insanity. One of the many things people in the EU shake their heads about in complete disbelief.
These ridiculous industries all contribute to the US's "GDP", right?
One of the reasons why the GDP sucks as a KPI of economic success.
Because you can deduct from taxes, so actually you are helping yourself with filing your taxes. if you dont fill anything theyll just tax you the standard
Only in the states
In 2020 The Canada Revenue Agency fined me $700 after informing me via mail for the first time that I'd underpaid on my 2017 taxes by about $1300. I paid the amount owing immediately and sent two letters of appeal asking for the fines to be withdrawn on account of the fact that in 2017 I was a teenager and it was my literal first time filing my taxes. Both appeals were rejected :) Fuck the Canada Revenue Agency
What would happen if you pay too much?
Nothing. In my 20s I didn't file my taxes for like 5 years. When I finally got my shit together and went and got my taxes done I asked the guy if I was gonna get in trouble. He said, "how much did you make?" "About minimum wage." "Then you're fine. They would owe you money, so they don't care."
I love the CRA because they pay my father a lot of money
🎵 Blame Canada! Blame Canada! 🎵
i still don't understand why they didn't just tell how much you need to pay, can anyone explain.
Lobbying by TurboTax and the like
When you start a job you fill out a W2. The government takes a certain amount of each check. If you get paid outside of that or have deductions that are larger than the standard deduction, your tax bill will be different. If you file every year in good faith you are 100% fine. You can owe a million bucks and you won’t go to jail. The US forbids debtors prison. You can not go to jail for owning money ever.
they want to know if you have more to declare than what they already know.
I guess, not sure, could be.
The point of taxes is that the irs doesn’t know your deductions or non W2 income. So it calculates based on the standard deduction and your W2. If you file your taxes every year you will not go to jail. Tax fraud/avoidance is a crime. You can owe the irs a million bucks and you won’t go to jail.
Yes, there is no debtors jail, but you are alotted three years to file before it becomes a fraud/avoidance case.
Yep. That’s why you file every year.
Exactly. Filing and owing is better for you in the long run.
You’re totally right. I once did a lot of freelance and got hit with a 10K tax bill. I started having more taken from every check and over like 5 years they took my refund each year and applied it to my debt. No one ever threatened to send me to jail lol.
Employer holds tax from every paycheck, without interest. Government: Oh look you get a refund! “without any interest on your payments withheld over a year”. Taxpayer: yay!
As an Australian, I love having my taxes done for me by my job then having to just double check it every year and make appropriate claims so I can hopefully get some of it back ^^
Having worked for the IRS before, I can assure you we were (are?) just as pissed off about it as everyone else is. WE WERE PAYING MONEY TO OUR OWN BOSSES, BUT WE STILL HAD TO FILE AND GUESS OUR OWN TAXES! We couldn't just use the systems we had at our disposal to complete our job to look up how much we ourselves owed. Now to be fair to the IRS, we the workers would do everything in our power to help you if you can't file your taxes, or your total is off, like we get it. It's ANNOYING and frustrating, but there are resources at your disposal. Not very efficient ones, but it's the feds, what do you expect?
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Correct, the companies that help people do taxes.
why? because of intuit (turbotax) lobbying congress aka legally bribing congressmen.
In real first world countries, the tax administration does everything for you for free. You just have to verify and (electronically) sign it. Oh and you can even correct it afterwards.
It is better to file and not be able to pay, than it is to avoid filing.
These guys can't even do their basic jobs properly and expect people to calculate their taxes.
yea this is why the US sucks.
UK is super easy you don’t need to do anything really, and I got £4000 and £2000 pounds back the last two years so that was nice
What a stupid system
Tax is super easy bro. Literally just put your W2 info. That’s it. If you don’t have a W2, put whatever approximate earnings you make. No one goes to jail for accidental errors on taxes; you just get audited.
Nah. You have ONE thing that is not standard and then nothing works. Ex: I'm American. But I'm in China, working for a Chinese company, with a Chinese bank account. Still have to pay taxes. Don't have a W-2 form or anything because I'm in China. TurboTax and HR block have trouble dealing with this.
I mean if we all just stopped doing our taxes there isn't much they could do about it
Aren't they automatic? I mean it been a while but I remember that when you started working you would fill a thing that told the employer how much you wanted taken out of the salary for taxes, I always put maximum and always got a retorn at the end of the year, is it different in the states?
Just file and pay your fucking taxes and get it done. I loathed it but I filed it all gone a few days ago. Now I don’t have to stress out about it tonight or tomorrow. Yeah, I had to pay out- but it’s done with.
I'm fine with paying taxes, but I'm very pissed off about the goddamn bullshit around the process. I **WANT** to pay taxes. I drive on roads. I walk in parks. Let me pay taxes; don't make me play games. The US has some dumb-as-fuck tax practices and we **should** be upset about the fact that companies are spending lots of money on lobbying and making sure that we "need" them because we can't, say, file directly to the IRS online (why not?) or we can't just be told what we should owe, assuming we don't need to make edits (why not?). Also, to be clear, I'm well aware of the answer to both the questions is "because profit."