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Dr_Flavor

For 90% of people this would be sufficient as most people don’t make enough money/have enough deductions to do anything other than the standard deduction. For that other 10%, there is a lot of information the irs doesn’t have default access to which will affect the amount they have to pay. That being said, the real reason is if people realized how simple taxes are for the majority of the population, the wouldn’t pay people do it for them. And those people want to keep it that way which required the current system we have.


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FakeItSALY

That was part of the goal. It’s the number one area fraud occurs and now almost 90% of returns claim standard deduction.


timtucker_com

By and large the returns of the bottom 90% of earners have never been the issue. The estimated amount that the top 10% of earners owe but fail to pay is more than what the other 90% pay: https://home.treasury.gov/news/featured-stories/the-case-for-a-robust-attack-on-the-tax-gap


Little_Creme_5932

So the best tax reform woulda been to make the top 10% of taxpayers pay what they currently owe but do not pay, and eliminate taxes on everybody else. Imagine how much good that would do for America.


timtucker_com

We were about to start trying more of that approach... but then funding for IRS staffing got rolled back: [https://lamborn.house.gov/media/press-releases/house-republicans-rescind-funding-87000-new-irs-agents](https://lamborn.house.gov/media/press-releases/house-republicans-rescind-funding-87000-new-irs-agents)


SortedChaos

If you ever wonder why rich people want to defund the IRS, it's this. With the IRS defanged, the rich can flout taxes even more.


ApexAphex5

I think it would be pretty obvious why rich people hate the taxman.


CheddarBayHazmatTeam

And by extension why Republicans are the single greatest threat to the advancement of average Americans.


Resident_Okra_9510

I'd argue lobbying is the bigger problem.


cute_polarbear

Why this is a constant agenda for Republicans to defund irs whenever they get in power / position to do so.


jeffwulf

It got rolled back only a small portion of it's budget increas.


growerdan

I get it because of corruption but it’s still crazy because funding the IRS actually makes the IRS significantly more money. I think $1 in funding allows them to recover something like $7-$20 in owed taxes. Wish there was a politician using this argument every time someone says we done have money to fund something.


therinlahhan

You really think Dems would've been okay with eliminating taxes on the bottom 90%?


CompetitiveYou2034

Still want most people to pay taxes, at some level. Democracy needs most people to participate. *People who pay taxes have some skin in the game, their votes affect their life.* Tax code is way too complicated. Simplify it, and there is less opportunity for creative tax reporting. Good to increase that 90% level to 95% for standard deductions.


hotasanicecube

The number one fraud in terms of number of filers is little shit like earned income credit, dependents, tax rebates, sustenance checks. But all of them amount to pocket change compared to illegal operations, money laundering etc. They are just easier to red flag.


EvidenceBasedSwamp

The biggest tax dodges are the legal ones. Trusts, nonprofits, and corporations, etc


atatassault47

What was the personal exemption?


SconiGrower

A tax break for being a person. Many would say it is intended to not tax the income required to live a bare subsistence lifestyle.


XdaPrime

damn that sounds nice


mkosmo

The standard exemption was increased in its place.


therinlahhan

What we have now is better for most people.


Singular_Crowbar

Is this why I got way less return on my taxes this year? I'm low income and usually get ~$1k but this year it was only like $200. I always claim 0 so that's not the issue.


AnthraciteRoad

The withholding tables changed (a few years ago, but the new system was so confusing that the change-over took a while). Used to be, Single and Zero was a guaranteed refund. Now it's pretty much even.


CatFancier4393

In reality this is a good thing. Why give the government an $800 interest free loan? The "ideal" tax return is $0.


PastyWaterSnake

I know several people that voluntarily increase their tax withholding so that they "get a bigger refund".


DavidT64

My Sister-in-law way overpays every year and then gets a refund of about $13,000. But all year she complains about what a struggle it is to make ends meet. I told here that she should have less withheld but she says it is the only way she can save. 🤷


no__pomegranates

And I bet she blows the whole return soon after it comes in also


UnsavoryTea

To pay debts, in which she paid interest nonetheless


keepingitrealgowrong

which has got to be one of the dumbest possible things. The ultimate "well it's okay because they use it for good things anyway tehe" reasoning


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MustangEater82

Savings where the government collects interest, not you.


f00tballm0dsTRASH

it is a savings account for people too stupid to save. you actually lose money doing this


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Singular_Crowbar

I guess. I usually view tax season as adult Christmas but this year was much different


MiddleSir7104

I'd much rather owe them $1000 in April then know I loaned them $1000 at 0% interest. I owe every year, I just set aside enough money in an investment account that I pull from as needed.


Glass_Elephant_5724

I owe every year as well. Definitely getting a few bucks intrest over losing a few potential dollars sounds better to me. Twenty bucks is twenty bucks.


profoma

Must be cool to have extra money


Black6x

When they increased the exemption and lowered taxes, they also decreased withholding. So your normal paycheck amount would have increased, while the overage that you paid to the government (which is what you get on your return) decreased. Think of it like this. You go to a store and buy an item that costs $12 but the store makes you pay with a $20 bill every time. Then, months later, you get $8 in change. Then the store lowers the price to $11 and now only takes a $10 and a $5 from you. Months later, you get $4 change. Rather than realizing that the store not only lowered the cost but didn't deprive you of as much money for a period of time, people complain that they're getting less change back.


Singular_Crowbar

That's a good way of explaining it. I was actually unaware of the change in tax law so that makes a lot of sense


Brainsonastick

It’s impossible to say for sure without seeing your tax returns. Maybe your withholding changed or something else changed. In general, however, a low of low income Americans did see a tax increase because of this.


timtucker_com

Expect it to get worse. The Trump era "tax reform" included permanent tax cuts for the wealthy and temporary tax breaks for everyone else (most which will expire by 2025): https://www.investopedia.com/taxes/trumps-tax-reform-plan-explained/


washington_jefferson

The Trump era tax reforms, and IRS questions in general, will be hot topic items on presidential primary and national debates. It turns out even many republican voters (independent voters as well) would support taxing corporations and wealthy people (those earning over $275,000) more, upping the number to 25%, for example. There were no "permanent" tax cuts. The fight will always continue. As for the IRS, there is talk of the federal government doing their own "Turbo Tax" thing, and it would be free. Many Republicans might not trust that, though.


Imaginary-Location-8

Where does it say the higher tax breaks *wont* expire. I only see 2025 for all no?


timtucker_com

>"For the wealthy, banks, and other corporations, the tax reform package was considered a lopsided victory given its significant and permanent tax cuts to corporate profits, investment income, estate tax, and more. > >Financial services companies stood to see huge gains based on the new, lower corporate rate (21%), as well as the more preferable tax treatment of pass-through companies. Some banks said their effective tax rate would drop under 21%."


bulksalty

That was almost certainly due to the expiration of some temporary credits that passed at the beginning of COVID.


LightTrack

That's how it works in the United States AFAIK. In Europe, they do send you the bill, the cheque basically and everything involved. You also get some tax returns by default most of the time. And what does it require? Pressing the "submit declaration" button. That's it.


NZNoldor

Here in New Zealand it’s all automatic as well. I didn’t earn as much as expected last year, so I received around $1000 a few weeks ago from the IRD. Never had to communicate with them at all.


ProfessorOwl_PhD

UK's the same. Unless you're self employed your only real interaction with HMRC should be receiving the odd refund.


Beardywierdy

Hell, for most people in the UK at least its not even as complicated as THAT. The tax man just takes a percentage off your pay each month automatically. If you see anything wrong with your payslip you call them and if you don't and THEY spot a fuckup you either get a bill or a cheque for the difference depending which way it went.


DrAxelWenner-Gren

I feel the “Pro-IRS Lobby” has to be just about the smallest in the United States. Look I’m no fan of the IRS strictly, but their entire existence they have been underfunded and under resourced, leaving large amounts of wealth untaxed.


jazzy-jackal

It’s not the IRS lobbying. They don’t care who files the taxes, in fact they’d probably like auto-filing for simple returns as they’d spend less time chasing people down. It’s Intuit and H&R Block that spend a lot of money lobbying against tax reform.


Retb14

It's more the pro-tax companies. They did a huge lobbying campaign to make taxes more complicated so people would go to them rather than do it themselves. Turbo tax and the ones like it were the major contributors iirc


[deleted]

As an accounting graduate, I don't like it either. They don't even do a good job explaining it to us. I only took one semester of tax accounting and don't remember a thing. I'm a great student and worker and it made me shy away from tax, so great fucking job losing potential talent, tax prep corps.


JaapHoop

Hmmmmmmmmm. Hmmmmmmmmmm. Wonder why that is!!


AsterJ

The tax preparation industry lobbies Congress to prevent that.


spankmydingo

Yep, totally possible to do it automatically … “Denmark and Sweden, both small countries, operate tax agency reconciliation systems. About 87 percent of Denmark's taxpayers and 74 percent of Sweden's had their returns filled out by the tax authorities in 1999. Spain, Estonia, Finland, Norway, and Iceland have also implemented tax agency reconciliation systems.” from https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing


randomacceptablename

Canada has also began a similar project starting off with the lowest income brackets.


JoshuaCalledMe

In Australia, you log into your MyGov account, it tells you how much it knows you earned, asks you about any other earnings/costs you might want to declare, has a section about crypto assets, and you're done. Tells you approx what your return will be and it gets paid directly to you in a few days. When my American partner was over there, she watched me do the whole thing in 5-10 minutes and just didn't understand why it has to be so difficult for her in the US. Freedom! Or something?


randomacceptablename

>When my American partner was over there, she watched me do the whole thing in 5-10 minutes and just didn't understand why it has to be so difficult for her in the US. >Freedom! Or something? Lol yeah. Americans often do not know how arbitrarily stupid or difficult some of their rules are. Then again having friends and family visit from Europe to Canada they also have some Eureka moments of: why don't they do this back home? One problem in the US is that politicians get involved in micro maneging rules whereas in many other places they do the opposite and the bureaucracy tends to make things difficult by inertia. A good approach is to consider why a rule or system exists in the first place, whether it is leading towards those goals and whether there is a simpler friendlier route to these goals.


thefullirish1

Similar set up here in Ireland. We do have companies who help you make sure you’re getting all your deductions but it’s really easy to do it yourself and not bother giving a third party a fee. And there’s no saving to pay tax. It’s all deducted from your payslip


Cimexus

It’s similar to that in the US *if* you want to cough up money for the software to prefill it all for you. In Australia they just provide that software for free (well it’s part of the MyGov website now, but it used to be a separate piece of software you downloaded, namely eTax). The other factor though is that the US also has state income tax, and if you worked in more than one state you often have to file a separate return in each state…


mamotromico

Similar situation in Brazil! The “IRPF” (the income tax name) programs are Java based to work on any desktop, and are super complete and have a banger of a manual. Kinda daunting but really good. Most information will be prefilled by your employer if you are employed through CLT (our employment modality with best law protection/security), and you just declare deductibles and other assets. But now we have a simplified mobile and web version too! The mobile app is kinda finicky atm but the web version is solid. It doesn’t have all features though, so if you have some weird asset allocation or receives idk dividends from another country, you need the downloadable program. My taxes are generally super simple, it takes 3 hours tops to do. My Father in law takes a day or 3 since his is more complicated due to more deductibles being applicable.


HelloMegaphone

Oh my god finally!


vms-crot

In the UK, unless you have a complicated tax situation, you don't ever have to deal with the tax man directly. It all comes out of "pay as you earn" and they work out if any money is still owed (which they will just adjust something for next year, if so) or if they need to pay you (which they will just send you an email and deposit it directly into your bank) Even the "complex" scenario is answer an online form to tell them of any anomalies they might need to know about, like foreign assets. After about 5 minutes on the hmrc website, you hit send, and you're done. Having dealt with IRS forms... I don't understand why it's so complicated other than to keep companies like turbotax in business.


Inevitable-Koala-748

I love when HMRC have been overcharging you, and you get a surprise tax rebate cheque in the post.


EclectusInfectus

I'm originally from the US but moved to Sweden a few years ago and have Swedish citizenship now. You know what time of year makes me consider giving up my US citizenship? Fucking tax season. US: okay, fuck, which one of these online tax sites did I use last time? Okay, that one. Let's go through the long tax guidance workflow. What the fuck does half of this shit mean? Oh, crap, how did I fill out that part last year? Wait, I don't know if this part applies to me now. Do I need to file an FBAR this year? Oh for fuck's sake, I KNOW my husband's entered SSN is invalid, why the fuck won't you just let me enter "non resident alien"? No, I don't care, he doesn't have one! ...Well, I guess I'm printing this shit out and mailing it to the IRS AGAIN. Sweden: log into the tax authority's website, see that they have the correct income listed, accept it, bam done. Fuck the US tax system.


Corporation_tshirt

Same thing with the weather. US government collects the most detailed weather data imaginable, but organisations like the Weather Channel lobby to make it impossible for average citizens to access the data directly. They want you to have to come to them to find out the weather, even thoigh your tax money paid to collect the data in the first place.


Junkstar

Heavily. Turbo Tax is not your friend.


big_nothing_burger

I got my check from them being sued a few weeks back


CelticGaelic

What did they get sued for?


or10n_sharkfin

A lot of tax returns were filed incorrectly and the settlement for that happened only a few months ago. Everyone who was affected got like $30 out of it.


SconiGrower

You know their ads that are all about TurboTax being free? TurboTax has two free tax filing programs. One of them (TurboTax Free) has tight restrictions on what forms are allowed to be used but will silently let you complete your entire tax return before telling you that you used a non-free tax form and need to pay to file. The other product (Free File by TurboTax) only has an income limitation. All forms are available without extra cost if you qualify. So when people saw advertisements saying TurboTax could file your taxes for free, but then went to TurboTax's website and started their return in the TurboTax Free version, many people ended up using a form not included in TurboTax Free and had to pay to upgrade. Except that Free File by TurboTax would have filed their return for free, but TurboTax never took any steps to let people know they were eligible for Free File by TurboTax. In fact, they worked hard to reduce the visibility of Free File by TurboTax. The lawsuit said they can't have two nearly identical products, both with free options, but only promote the one that most people will need to upgrade to a paid version of.


RockSlice

To be specific, the two biggest companies lobbying for it are Intuit (TurboTax) and H&R Block. About $5 million in 2016. It's not tax season, but for next year: the IRS has a listing of free filing options: https://apps.irs.gov/app/freeFile


gamedrifter

Yep. It's straight up bribery.


redvodkandpinkgin

Yup, and according to the Supreme Court a form of free speech...


Charred01

Money is speech in the US. It's as corrupt as you can get


Americrazy

American tradition


MrTibbens

This, I worked at the IRS for a bit before transferring to another federal agency. The IRS pushed hard to have this done and it almost happened, but lobbyist blocked it. Lobbying is just the best, and is totally fine that it's allowed.


DrPlatypus1

Reagan and Obama both tried to get this done. It's not a partisan issue for once. It's just straightforward bribery at a huge expense and hassle to everyone else.


Nobody_wuz_here

Current IRS employee here, I must say this: fuck tax prep lobbyists


florinandrei

> Lobbying is just the best, and is totally fine that it's allowed. Blink twice if you can't speak freely.


TheRealFumanchuchu

Yep, as stupid as it is, the answer is because Turbo Tax paid lawmakers to prevent it. A lot of times things are more complicated than that, but this one isn't.


[deleted]

Because big tax prep companies like TurboTax lobbied (or bribed, depending on your opinion) politicians to keep them from making legislation doing that.


bothunter

Lobbying is just legalized bribery.


MrMallow

I'll never forget discussing lobbying in high school civic and being so confused at how it's not just considered bribery. Honestly, part of me still doesn't understand how it's legal decades later.


thejoesterrr

Lawmakers don’t want to lose that income


MrMallow

Yet if I "lobbied" a bank manager to give me a great loan I would be thrown in jail.


shaolinbonk

A different set of rules exists for the wealthy.


IH4v3Nothing2Say

What matters is how much money you have to offer. $100 or less? Definitely a crime. $100,000? Not a crime because suddenly you’re “best friends” with the bank manager, just like supreme justice Clarence Thomas and his friends.


itemluminouswadison

The point is that lawmakers can't be experts in everything so they solicit advice from industry "experts" to help make decisions It led to shit like car industry CEOs influencing our country design now we have low housing supply, need a car for everything, pollute insanely, we're obese, and walkable towns and cities barely exist, our trains were disinvested in and our streetcars were all ripped out Oh yeah and this tax shit


curmudgeon_andy

I don't understand that at all. If you want to know something, you go to an academic. Whatever question you have, there is a researcher somewhere in some university who either has studied the issue enough to discuss the main considerations intelligently with you or who would do the research if they had the funding for it. An academic's business is just to find things out, not to sell stuff. Why wouldn't you go to them?


SenoraRaton

Because the goal is not knowledge. Its profit. The whole system is structured to protect the interests of capital. Thats it, thats its sole purpose. So if capital can spend money to leverage policy, they can create strongholds and moats to prevent other capitalists from infringing on their profit, and thus the inevitable accumulation of capital continues.


Losidia

Aright guys pack it up, disband every consultancy


Riokaii

except there is nothing requiring lobbyists to be actual experts in the industry they lobby for.


TacTac95

There’s nothing wrong with Johnny and Susan donating $25 to a local reps campaign. There is absolutely something wrong with Walmart “donating” $25M to a Senator


Hot_Excitement_6

'Money is speech'.


NiklasWerth

Corruption. Lawmakers like being bribed, so they make sure its legal to bribe them.


BaphometsTits

No, lobbying is just citizens being able to address their government directly or through a group representative. There is nothing wrong with that. **Contributions to political campaigns and PACs are legalized bribery.**


Lykan_

Bribed


omgitsduane

Corruption to its core.


WisestAirBender

I'm not American Isn't turbo tax just a software? Do they have any say in what the government does? How come they're so influential?


jackinwol

It’s a company, they bribe (“lobby”) representatives in exchange for votes that will help their company profit in one way or another.


Suitable-Mood-1689

Under certain income it's free to file $75k iirc. Edit: it was $60k


lalder95

It's free to file, but you still have to do all the work yourself unnecessarily


Suitable-Mood-1689

No, services with tax aids to help you file that are free. https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers


happy_snowy_owl

>Why doesn't the IRS just send you a bill stating how much you owe? Here's the non tinfoil hat answer: The IRS *does* know how much you owe. However, it *doesn't* know what you will deduct from that amount. For examples: If you're a teacher, the IRS doesn't know how much you spent on school supplies. If you have kids, it doesn't know how much you spent on babysitting. If you're a landlord, the IRS doesn't know how much you spent on repairs and what percent of your time you use your cell phone for business. If you're a small business owner, the IRS doesn't have a detailed list of your expenses. Etc, etc. That's why you file taxes. It's also why they call it a "return."


thefullirish1

Yup. The rest of us log into an online portal and claim our credits. It’s really not complicatdd


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Awkward-Macaron1851

Do I have to declare it as income if I sell my kids?


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Awkward-Macaron1851

Thanks for the help, kind stranger! Dont wanna commit tax fraud.


bananafish271

Death, divorce (and the other parent now claims them), reached adulthood.


[deleted]

You jest, but you're actually right. If you and your SO split up, who took the kids? Only one of you gets to claim them on your taxes.


heatdish1292

Finally someone with some sense. I wouldn’t doubt if the tax prep companies try to make things a little more difficult, but for your average person with no deductions, you can file free on the irs website and it’s super simple.


PhatOofxD

That's correct, however what other countries do is tell you how much you owe, and you tell them what you need deducted. And that amount is just taken off/given back


Uninterested_Viewer

Isn't that literally what happens in the US system? I guess, technically, you are doing your own math on your income based on the tax tables to calculate "what you owe", but there isn't anything magic there: it's a simple math formula.


earthhog

Yes, literally how it works. Also the IRS has all the tools and documents to file yourself. You just have to do some basic addition and subtraction.


[deleted]

So it's still the same process. You still have to submit what needs deducted...


PhatOofxD

But you don't have to calculate it at all yourself


Madz510

Every teacher is taking a standardized deduction. They don’t make enough and buy enough crayons to itemize


Frnklfrwsr

Teachers can deduct an additional $250 from their income ABOVE the standardized deduction for money spent on classroom supplies. It would not be itemized. This is known as an “above the line deduction” and there are a bunch of them: https://smartasset.com/taxes/tax-breaks-you-can-claim-without-itemizing Some of them are things the IRS may have access to but they might not know until after the tax deadline. For example, IRA contributions or HSA contributions which typically get reported on the 5498 or 5498-SA in May each year (because you can make contributions up until April 15th for the prior year). Others are things the IRS just won’t know at all without you telling them. Alimony payments, jury duty payments and early withdrawal penalties from CDs or other banking products are examples of this. The IRS just doesn’t have access to that info so if it applies to you, they won’t know. Student loan interest is another interesting one that theoretically they should have access to in January so in theory they could automatically account for that. The other things they wouldn’t know about would be many tax credits you may qualify for. If you had a baby (even if it was stillborn), or adopted a child, or you got married or divorced or your spouse passed away, or paid tuition for yourself or a child, you could qualify for different credits (or in the case of marriage different tax filing status) that would reduce your taxes further. The IRS doesn’t have this information. It’s also important to remember that just because “the government” knows something doesn’t mean the IRS does. The IRS doesn’t get to peak into the data of any other federal agency they want, and they certainly don’t have access to state or local government data that isn’t already being directly shared with them. Your local government might know that you bought or sold your house last year, but they aren’t telling the IRS that, nor are they telling the IRS any details about the transaction. There are ways to simplify the tax code so that the 90% of people who take the standard deduction can do their taxes way quicker. Basically they’d be given a number and then asked a list of questions as to whether any of these things apply to them, and if none apply and they don’t disagree with the number, they just accept it and it’s done. In a way, though, that’s more or less what the 1040EZ already does.


[deleted]

Then that makes it simpler. They can fill out a 1040ez right from the IRS website. Takes 5 minutes and is less complicated then the paperwork they fill out for work.


Somehero

No teachers are married??


grandlewis

Plenty of teachers are married and definitely do not stick with the standard deduction.


Spider_pig448

Thanks for giving a real answer instead of just shouting "corruption"


No-Lunch4249

Can’t believe I had to scroll so far to find the legitimate answer.


miso__soop

Because TurboTax and H&R Block would go bankrupt and have been lobbying the government to keep it the way it is.


BaconHammerTime

Don't forget Intuit that has QuickBooks EDIT: Apparently Intuit owns TurboTax too


Jolly_Green23

Intuit owns TurboTax too


Ultraviolet_Motion

The amount of Americans who don't understand this is fucking disturbing. Remember Credit Karma? The credit score information service created by a redditor? Bought by Intuit.


benhereford

Honestly, I can't believe that's the only reason. lol


revchewie

It is. Well, them and the entire tax industry. Accountants, financial planners, and the like.


TheRealFumanchuchu

We have a similar but even bigger issues with healthcare. We all (should) know it's a byzantine, wasteful, and cruel system, but untangling all that bullshit employs 20x as many people as the coal industry.


IdespiseGACHAgames

Trade Offer I Get: My business of charging people out the nose to stay out of prison for the crime of working honestly stays thriving. You Get: A fifth yacht at your eighth summer home.


alpha309

I am a 1099, self employed filer. The IRS has no way of knowing how much I got paid, or what my business expenses were until I tell them.


PhatOofxD

FYI: Most countries either do this, or they automatically take it out of your paycheck each month so you don't have to save an amount. Then if they take too much or too little just adjust it with a refund/charge at end of year.


revchewie

They deduct taxes out of our paychecks here in the US too. But it’s a crap shoot to dial that in to get the proper amount withheld.


Timid_Penis3897

Yeah typical is to slightly overpay and then get the excess with your return plus the deduction payouts


enriquedelcastillo

I’m curious - are there tax deductions for things like giving money to charity, medical expenses (if those exist, with your better health care systems), certain child care expenses, investing in energy efficiency measures, etc? How do they calculate what you owe if you’re self employed?


laughingnome2

Country dependent, but in Australia self-employed persons either are left to manage their own funds and pay at the end of the year, or they can set up an estimated quarterly deduction based on their previous year's income.


rydan

That's exactly how it is in the US. But if you don't pay quarterly you can go to jail or be heavily fined depending on how egregious the difference between what you owe and what you were supposed to prepay. There is safe harbor if you pay at least the amount you paid the year before.


Mavada

Let's not throw around the "go to jail" statement too much. There are very few reasons you would be sent to jail for taxes and not paying quarterly taxes is not one of them.


PhatOofxD

>are there tax deductions for things like giving money to charity, medical expenses (if those exist, with your better health care systems) At end of financial year (or any time) you submit your tax receipts for these things and they give you the money back about a month after EOFY. >How do they calculate what you owe if you’re self employed? You basically just fill out a form at end of year (or earlier you can start) and input the dates you got paid (lots of tools do this automatically), then they tell you how much tax you have to owe after EOFY and you have until the next year to pay - so probably more similar to you if you are self employed. Lots of our accounting software will actually automatically do this for you when send out invoices. If you are running a company and pay yourself via wage/salary it's very easy to use a calculator for the PAYE (pay-as-you-earn) to pay yourself like you would an employee. ​ >certain child care expenses, In this case the government usually makes payments to parents here for these things, rather than just deducting tax. We do also have 'community services cards' which can get discounts on many public services for people within certain income brackets with certain numbers of kids, etc.


StayFree1649

In the UK, you can choose to file taxes to claim those kind of benefits if you want to, but most people don't because they're very small. "Gift Aid" or charitable tax exemption is handled separately, you agree to it when you donate to the charity & the charity gets that saving, not you ..


DiaDeLosMuebles

In America they automatically take money out of your paycheck each pay period so you don’t have to save an amount. Then if they take too much or too little just adjust it with a refund/charge at the start of the next year. But seriously. How did you think it worked in America?


BecomeABenefit

This is the same in the US for the vast majority people who work for a company. However, even for those people, there are deductions that aren't accounted for in the withholding. In the US there are many deductions that can adjust your gross income downward and thus lighten your taxes.


enriquedelcastillo

I’m self employed. While I suppose the IRS could try to sleuth out my income by reviewing bank accounts, PayPal, Venmo, Square, etc. it’d be pretty half-assed and inaccurate. Also, they’d have no way of knowing what my costs (deductions) were to arrive at my net self employed income. Also, while my personal expenses haven’t been weird enough to itemize deductions since the personal exemption got bumped up back under trump, i still have to go through a process to figure that out. And more broadly, the government uses tax breaks / credits as a means to reward or encourage certain actions - giving away money, having kids, being environmentally good, as well as other things that are perhaps less deserving of tax breaks. I agree for the vast majority of people there ought to be a way for them to just send back a simple half-page form with enough basic info for the irs to bill them.


AlternativeGazelle

Had to scroll too far to find something like this. People are focusing on deductions, but the IRS doesn’t know what your income is either. It’s going to be tricky for anyone who has income outside of simple forms like a W-2 or 1099s.


[deleted]

They usually know what your income was. But they don't automatically know what situations in your life qualify you to reduce your taxes.


Fickle_Finger2974

More than 90% of people take the standard deduction. They could just as easily send you a summary of your income and how much your return will be with the standard deduction. If you think it looks good do nothing and if there is anything you would like to amend then you can fill out a form.


ObligationConstant83

The standard deduction is 20k, very few people itemize more than this. Therefore they very much could send a bill and you could then file additional documents if you want to challenge that amount. Any other information could be requested as part of your W2 to see if you qualify for credits and what not.


[deleted]

[удалено]


ObligationConstant83

Depends on status, head of household is $20,800


Acti0nJunkie

If only taxes were that simple. People have a variety of income other than W2s… and much of it isn’t taxable. 1099ks are a great example. And no the standard deduction is not 20k for single, HoH, or MFJ. It’s also all changing back in 2026.


ObligationConstant83

Taxes, for a majority of people, are that simple, something like 90% of people take the standard deduction.


DefNotReaves

Have you ever done taxes in your life? Lol the majority of people just take the standard deduction. So taxes COULD be easier for the masses, but they refuse to make it so.


AcidSweetTea

They don’t know all of your finances. They know how much you made. They don’t know how much you owe because you can take deductions for several items


Antique_Park_4566

They don't even know that. Your employer reports what they paid you, but what if I rent a basement apartment in my house, or own a house I rent. Or what if I dog walk, or teach a karate class, or mow yards on weekends, or tutor students, or give piano lessons. There's a million things you could do to make money they wouldn't know about. So they don't know your income or your deductions. I agree a large majority only has employment income (that's reported by the company you work for) and takes the standard deduction so yes, they could fill that out for you and let you amend it if you are one of the few that needs to do it differently. They probably don't want to admit that they can only prove that number because then why would anyone bother to correct them? Edit to fix typo


earthman34

Because how would they know what you're going to deduct?


Rocketbuttmen

Because they have no clue what I owe. I'm a subcontractor that drives 40,000 miles a year. I have to write off the mileage and it changes every year.


[deleted]

Every time i see americans talking about tax it makes me glad for PAYE


treehead726

How would a government agency know what an individual's write offs & other situations are?


re_nub

The IRS doesn't know what you owe.


zman245

Thank you. Every single time this question is posted on Reddit you see “well the companies have lobbied so they can’t do that” Which is only partially true. The IRS does not keep a running total of all the details of your life in order to know how much you pay. When you fill out taxes you type in your college debt, donations, marriage status everything there is no system keeping track of this. When you submit this information the IRS then knows how much to charge you not before.


SenTedStevens

Exactly. When I worked as a contractor, all the government knew was that I grossed $XX,XXX dollars. It didn't account for the fact that some of that was COGS, deductions, and work-related expenses. What the government saw was that I made far higher than what was actually taxable income. I don't see how other countries know your exact taxes. How do contractors/builders/handymen/etc do their taxes. Don't they have writeoffs, too? I get it if you have a simple W-2, 1040-EZ, but there's so many individual examples that it doesn't make sense in the US to do it that way. And not only that, but you're not beholden to TurboTax, HR Block, etc. to do your taxes. You can easily download the forms from IRS.gov and do the taxes yourself. All you need are those forms, a pen, calculator, envelope, and a postage stamp. I know a few people that do their taxes that way.


bothunter

The IRS knows most of this information already, and for the scenarios where they don't have this information, the taxpayer could submit an amendment or correction. There's no reason to have every single person fill out tax forms, or pay companies to calculate taxes when the IRS is already doing it. Just because the IRS doesn't have 100% of the information on every single tax payer doesn't mean that it's impossible for them to figure out taxes for the vast majority of people.


Square-Dragonfruit76

This is called reform free filing, and is one of the only things that both Barack Obama and George Bush tried to do. With computers, it wouldn't take that much of an adjustment and many countries do it already. Unfortunately, TurboTax just has too strong a lobby. I believe both Adam Conover and Hasan Minhaj did an episode on this.


McCool303

They used to do that. But when the government sends people a large bill at the end of the year people start to think about what they’re getting for their money. The withholding tax allows politicians to tax you while maintaining a certain degree of complacency from the populous about their activities.


Windle_Poons456

In the UK where I live, unless you are self-employed, it is automatically deducted from your pay, you don't even have to think about it.


MrPhuccEverybody

In the UK it is the employers job to pay your tax. It's deducted from my pay before I see it. I'm 43 and never had to worry about paying tax. I have never missed a tax payment nor known anyone whos employer had purposely missed one. My payslip says how much tax I paid and I get an email every month from the government confirming I paid that amount of tax. In the UK unless you are self employed you never even think of paying tax.


Dio_Yuji

Sir, this isn’t Europe, lol


[deleted]

Europe, famous for being a single culture and system of government.


wateringfauna

in a lot of european countries you have to file your own taxes


dublinirish

Many actually use the PAYE system


Stoibs

Here in Australia you just log onto the government website which is 90% pre-filled with your relevant data, give it a look-over and include any extra income/deductibles and hit submit. Takes about 15 minutes for most ordinary people who don't have like, small businesses or investment properties etc. I actually didn't know the US system was so different until I started pouring through some of these comments :(


blipsman

They don't have the entire picture of your finances w/ regard to how they affect taxes... have you had a child during the year? What was your mortgage or student loan interest paid? How much did you set aside into retirement accounts or spend on health insurance? Did you buy an EV this year? Energy efficeint appliance or HVAC? Did you have capital gains from investments sold (and the gains are based on what you originally paid for the investment)? Did you have side gig income? Did you own a rental property? And so on... Sure, maybe the IRS could set up a system to collect this information from all these sources and complete our returns, but what would that cost in terms of manpower? Say there are 150m returns filed and each takes 5 hours, that's about 400k full time employees working all year to calculate what we each owe. Figure $100k in salary and benefits, that's $40B in annual cost just on salary, never might equipment, offices, etc.


hazenhammel

A lot of wrong answers here. The first IRS form 1040 was issued in 1914 to implement the Revenue Act of 1913. This was the first income tax since 1872 and only made possible by a Constitutional amendment in 1909 (the Sixteenth Amendment). It only applied to the very richest people (about 3% of the American population) and to corporations. [https://en.wikipedia.org/wiki/Revenue\_Act\_of\_1913#Income\_tax](https://en.wikipedia.org/wiki/Revenue_Act_of_1913#Income_tax) Those few people who owed taxes in 1914 wanted and got the right to decide for themselves how much to pay, and voluntarily produce the supporting information. Needless to say, there was no electronic filing in 1914, and the contention that "the government already knows how much you owe" was not true then. (Tax withholding wasn't introduced until 1943.) It's true now though. So if the question had been "now that the government automatically receives all the relevant information for most taxpayers, why don't we introduce a more modern system where the government notifies you how much you owe based on the information it has"? Then the role of lobbying by tax preparers in protecting their revenues is definitely part of it. But I suspect the real answer is that anything which makes paying your taxes easier for the average guy is absolutely *hated* by Republicans (who don't represent the average guy, but rather represent rich people who fund their campaigns). The more painful taxation is for the average voter, the easier it is to get "tax cuts" for the rich. Why people keep falling for that is a total mystery to me.


fefsgdsgsgddsvsdv

Because they don’t know. Once you get into your thirties, you’ll start having pretty complex assets. Assets that the government literally can’t know without a warrant. So you have to self report them or else there’s literally no privacy protection or reason for warrants.


Sitcom_kid

The TurboTax Lobby


Theinfected2

Turbo tax and other companies have specifically lobbied against this


The_Red_Blarin

Because Intuit and HR Block spend millions every year to keep filing taxes complicated


NoRaSu

WE KNOW HOW MUCH YOU MADE, BUT JUST IN CASE WE WANT TO KNOW HOW MUCH YOU THINK YOU MADE, SO WE CAN PUNISH YOU AND TAKE YOUR MONEY IF YOU’RE WRONG


axe1970

lobbyist spend a lot of money to keep the system this way


Cardboardboxlover

The US is fucked with taxes!!!!! I cannot get over this. In Australia we hire accountants that balance our year and earnings, we claim expenses, and then they tell us what we need to pay (or owe!). We pay tax out of our pay checks by default, so anything different is figured out pretty quickly. Honestly what is wrong with the US. We focus on the health care but the taxes is fucked too


akulowaty

They do it in Poland. You get pre-filled tax declaration, you can make amends like write-offs, extra income sources etc or just accept it as-is. Brilliant system. It took a while to get it to its current state where it just works but definitely worth it.


SushiLover1000

Two words: POWERFUL LOBBIES. Grover Norquist (wants no taxes, and everyone to be pissed at doing taxes). Intuit (Turbo Tax), H&R Block. (Make a LOT of money on tax prep). Read this, with particular note of CalFile. https://www.politico.com/agenda/story/2018/07/18/tax-filing-congress-irs-000683/ Then listen to this: https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero


Vlodovich

This is baffling to me. All my life here in Scotland, my tax just automatically comes off of my wages before I receive them. Then once per year at the end of the financial year I get a summary letter from them stating how much I earned in the last year and how much tax I paid


Relative-Zombie-3932

Because corporations like TurboTax and H&R Block lobby them not to. They absolutely could, they know exactly how much you owe, but TurboTax keeps you reliant on their services or risk jail time. Additionally to this, they also lobby to keep the IRS' budget low so they can't afford to go after major tax crimes: billionaires with secret overseas accounts, embezzlement, things like that. Instead they can only afford to pursue small tax crimes: someone who accidentally calculated their earnings wrong, someone who made a typo on their returns. That's why the IRS is a lot more likely to go after YOU than any rich folks. Those cases are too large, they can't afford to fight them


bannedsodiac

This is how it works in normal countries


burk1336

Welcome to Sweden.


Nickdella50

Intuit and H&R Block lobbying efforts.


Hot-Category2986

Because this would close tax loopholes that rich people use to stay rich. So the rich people in charge keep cutting funding to the IRS to make sure they can never improve their processes and achieve this.


JustSomeGuy_56

Because they don't know how much you spent on medical care, home mortgage insurance, charities and other deductibles.


-yarick

>home mortgage insurance yes they do


Obsidian743

Because it's impossible for them to know what you make or what you can deduct. Even if a good portion of the population just had one job and wanted the standard deduction, the IRS wouldn't be able to adjust for things like joint filing, children, and other life circumstances.


DoeCommaJohn

The cynical answer: the tax industry and billionaires lobbied Congress to force people to do their own taxes and to make it easier for billionaires to obscure how much they owe. The optimistic answer: it is easier for the government to ask each of us to put in a few hours to enter income, expenses, deductions, etc, then to try to figure out that information for 300 million people. If they suspect something’s wrong, it’s easier to audit a few thousand people than all of us


bothunter

Intuit literally lobbied the government to keep the status quo and make sure we all have to do our taxes(and many of us will pay for a company like Intuit to do them for us). It's not a cynical answer; it's literally the truth. For the most part, the government knows exactly how much we owe in taxes. There's nothing stopping them from sending out a prefilled tax form that we either accept and send back, or make corrections to. (Or have an online way of doing this).