If the USA didn’t have such a complicated tax system, with companies like Intuit lobbying to keep it that way so they still make money, this wouldn’t be an issue.
A lot of countries automatically fill out your entire income tax return for you, and send it to you to verify it. If it’s all good, you just need to accept it. Less than five minutes work.
If the USA didn’t have such a complicated tax system
For 95% of the public, its not complicated. Its just getting all the independent pieces of information from different private agencies.
W2 from employer
1098 from your mortgage company
1099 from your retirement account firm
Prove you have health insurance
Prove you have student debts
Prove you have a small business and you’ve tracked your receipts
Prove you have children
Prove you paid taxes to your state
Once you have all the numbers lined up, its simple arithmetic. Easy for a computer to do.
But knowing who to ask for all the individual chunks of data is an obnoxious chore that only one organization does particularly well. And that organization - the IRS - won’t tell you the information they have. They want you to guess and tell them what you have, so they can tell you if you got it right or not.
Just reading that gave me a headache. In Latvia, heres how the system works.
If you have no deductible spending (medical, education, donations).:
Log into the govt system.
Press a button to generate tax form.
Press verify and submit.
Pay what you owe or wait for the tax return.
If you have deductible info
As before but also scan your receipts, and add the info on each receipt to the form. Can done easily via an app, which handily (sometimes correctly) can autofill the needed info. You can do this at any point in time, so you can do it whenever you get a deductible receipt.
Its not quite that simple, because you need to know what a “tax transcript” is and also set yourself up with a new kind of ID that I’d never heard of before today.
And that organization - the IRS - won’t tell you the information they have. They want you to guess and tell them what you have, so they can tell you if you got it right or not.
This really needs to be fixed.
In Australia, the stuff the government knows about you gets prefilled in the tax return form. Not as good as other countries where the entire thing is completed for you, but better than the USA. The form is significantly shorter than the US one.
When the bar is “You get nothing. Zero. Goose-egg.” its fairly easy to clear.
The form is significantly shorter than the US one.
A big part of the US tax game is giving you a relatively high base rate and then sending you hunting for deductions and credits. One of the upshots of the Trump Tax Cut has been to raise the standard deduction so high that most of those deductions and credits are worthless. So the form is deceptively long. It’s almost impossible to use your Schedule A for anything anymore.
What’s it like in other countries for business owners? Because in the US, if you own a business (even a small one where you are the only employee) and try to do your taxes on your own, may god have mercy on your soul. Even doing it through an accountant is a total pain in the ass
At least here in Romania, it’s the job of the accountant(s) to do the company’s taxes. If you’re self-employed or run a very small business (less than 10 employees) there are self-employed accountants who specialize in that and typically have 20-40 clients.
In France it’s about three clicks every month to pay your social contributions for a small business
Then at the end of the year they send you a stupidly complicated form that makes no sense whatsoever, but if you go online you can do it incredibly easily
Intuit tried selling QuickBooks here, but withdrew from the market as there are so many free invoicing apps
If the USA didn’t have such a complicated tax system, with companies like Intuit lobbying to keep it that way so they still make money, this wouldn’t be an issue.
A lot of countries automatically fill out your entire income tax return for you, and send it to you to verify it. If it’s all good, you just need to accept it. Less than five minutes work.
For 95% of the public, its not complicated. Its just getting all the independent pieces of information from different private agencies.
Once you have all the numbers lined up, its simple arithmetic. Easy for a computer to do.
But knowing who to ask for all the individual chunks of data is an obnoxious chore that only one organization does particularly well. And that organization - the IRS - won’t tell you the information they have. They want you to guess and tell them what you have, so they can tell you if you got it right or not.
Just reading that gave me a headache. In Latvia, heres how the system works.
If you have no deductible spending (medical, education, donations).:
If you have deductible info
they will definitely tell you, just go online and download your tax transcript – it contains all reported information.
Its not quite that simple, because you need to know what a “tax transcript” is and also set yourself up with a new kind of ID that I’d never heard of before today.
https://www.irs.gov/individuals/get-transcript
Not exactly front-facing on the website, which is itself not exactly easy to navigate.
This really needs to be fixed.
In Australia, the stuff the government knows about you gets prefilled in the tax return form. Not as good as other countries where the entire thing is completed for you, but better than the USA. The form is significantly shorter than the US one.
When the bar is “You get nothing. Zero. Goose-egg.” its fairly easy to clear.
A big part of the US tax game is giving you a relatively high base rate and then sending you hunting for deductions and credits. One of the upshots of the Trump Tax Cut has been to raise the standard deduction so high that most of those deductions and credits are worthless. So the form is deceptively long. It’s almost impossible to use your Schedule A for anything anymore.
In the UK your employer just does it for you
What’s it like in other countries for business owners? Because in the US, if you own a business (even a small one where you are the only employee) and try to do your taxes on your own, may god have mercy on your soul. Even doing it through an accountant is a total pain in the ass
At least here in Romania, it’s the job of the accountant(s) to do the company’s taxes. If you’re self-employed or run a very small business (less than 10 employees) there are self-employed accountants who specialize in that and typically have 20-40 clients.
Not sure about business since I’ve never had to deal with business tax returns.
In France it’s about three clicks every month to pay your social contributions for a small business
Then at the end of the year they send you a stupidly complicated form that makes no sense whatsoever, but if you go online you can do it incredibly easily
Intuit tried selling QuickBooks here, but withdrew from the market as there are so many free invoicing apps