But I am going to play devil's advocate here, did you get the "best deal"?
It all comes down to deductibles. In France, the "one click taxes" option assumes 10% of your salary is deductible, which is often a good deal but sometimes, it may actually be more, especially if you have a long commute. The government app won't help you with that.
It may not help you with incentives too. For example, you may get some tax rebates if you did some work to improve the energy efficiency of your house, what exactly you can declare? And charities, loans, etc... A good accountant may help you save a significant amount with all these details.
Tax software are like a middle ground between simple, no brainer, government issued "one click" tax filling and hiring a professional accountant. Note that in France, most self-employed people hire an accountant, proper tax filling can be a minefield if you are not an employee.
And by the way, that's Intuit's argument. That it is used to justify its evil deeds is a thing, but the argument itself is not without merit.
If you're doing a lot of charity donations, real estate, student loan debt, saving receipts for work related expenses, calculating depreciation on assets, etc, then its worth it, but by then you probably have a personal accountant doing it for you, not a program.
I’ll save my personal political ranting for a different space.
Addressing the GP, yeah our system has been messed with by the tax prep companies. One year I had a complicated (for me) tax situation and I hired a CPA. They managed to make a mistake that lead me to overpaying by thousands. The IRS was nice enough to mail me a check.
The IRS clearly has enough info to run a European style system. We (as a country) just underfund the IRS and have special interest vested in maintaining the status quo. Clearly those special interests are doing a great job if someone with a state certification and professional tax software can mess up the math. A friend had the same issue with this past tax year and owes a balance plus penalties. She has every intention of paying her taxes. Why does our system make it hard for her to do so?
There’s no good reason why we should have to chance these situations. We should just be able to pay our taxes correctly at time we are paid and move on.
And the local IRS has the best paying software development jobs in the government, so they actually have decent software (although they could do with some more UX people).
Obviously I had no idea of this scheme, I have no accountant and my university fees of 5 years ago were far from my mind.
Randomly got €6000 euros income tax back, very nice windfall courtesy of the Netherlands government.
Normally the final dues are a lot less, probably 0 for people who have no mutations and a regular job. I had to pay 300 euro this year because I did a single freelance gig on the side.
edit: Note that this is probably a very exceptional situation. Normally college students don't make enough money to be paying taxes in the first place, I had the perfect storm of having all the deductibles being applicable in a single year, and making a good wage that year. I'm just telling this story because it's an example of the system randomly giving me the sort of tax benefit even a dedicated accountant might have missed, just because it system applied its rules to all the information it has about me.
So I thought you meant you got 6000 back because your university fees became deductable. At 25% tax rate, that would be 24,000 in fees. It sounds like you got a tax credit.
From my experience with the NL tax system, next to nothing is deductible. Very straightforward taxes, they take 51% of all personal income. ;)
> In the Netherlands, the average single worker faced a net average tax rate of 28.7% in 2020, compared with the OECD average of 24.8%. In other words, in the Netherlands the take-home pay of an average single worker, after tax and benefits, was 71.3% of their gross wage, compared with the OECD average of 75.2%.
The specific number wasn't as important as pointing out that NL doesn't have a magically fixed number (and certainly not a high one) for income taxation.
Anyway, what's chilling about it? You're phrasing it in a very weird way, the state doesn't own labor. It is due taxes for its services rendered.
The Netherlands is ridiculously rich and the government takes very good care of its citizens. I think it's hard to imagine for Americans how much value we get from our government. Traveling from The Netherlands to the states. Even your richest cities have poor people hungry, suffering and distressed just camping around everywhere. I'm not saying we've got it perfect, but I'm pretty happy with the deal we got.
There are tons of poor and hungry people in NL, and the gov is actively hostile to homelessness. There’s lots of municipal corruption, and central inefficiency. I know lots of Dutch citizens who are in student debt, and very few families who can afford to buy a home before 35.
It’s a fallacy that somehow this is the /the/ tax rate that can provide for citizens. There is no magic number, and we can always demand more efficiency.
Check this video out: https://www.youtube.com/watch?v=rKo8Sv99MkM That's about Skid Row, it's how one of the US's richest cities deals with the disadvantaged.
Dutch citizens with student debt.. that's a joke right?
“An average loan of 700 euros per month means that study debts of 50,000 euros are no longer an exception.
It makes sense that students work more due to higher costs of room rent and tuition fees and less income thanks to the lack of the basic grant.”
The NL and USA differ in home ownership by ~4% (69 vs 65.3). That’s not statistically significant to be honest.
There’s a lot of myths in Dutch society, and the majority of people are not aware of reality.
It's a joke, because student debt is a sign of wealth, not of poverty. My government invested almost 50,000 euro into giving me plenty of time and space to study. I was able to live as a student for 7 years, usually working less than 12 hours per week to supplement the loan. I leveraged that loan into getting an education is super valuable, if I wanted to I could take a job double my current salary and live very comfortably in Amsterdam.
Different story for my partner perhaps, but if she never makes income, after a certain amount of time her loan will be forgiven even without her ever making payments.
I don't know how home ownership is correlated to poverty. It's tied to wealth, sure, and it's a very bad thing that it's so low. But the average renting person in The Netherlands lives very comfortably, so not owning a home is not a strong indicator for poverty.
Homelessness, that's the indicator you're looking for. But you are right, it seems I am living in a bubble, because there's a severe problem with homelessness in The Netherlands right now. https://nltimes.nl/2020/02/17/homelessness-netherlands-doubl...
According to wikipedia there's more registered homeless people in The Netherlands than there are in the states, I don't know how to make sense of that because the scenes I saw in SF, Portland and SLC were unlike anything I've seen in any wealthy European country. It made me think of Hungary and Romania.
You wouldn't last long living on the streets of Fargo North Dakota.
> Dutch citizens with student debt.. that's a joke right?
To be brutally honest, both these statements lead me to believe that you live in a bubble within NL.
I personally know tons of Dutchies in both situations, and I have a feeling you might (unknowningly) as well. Might be worth expanding your social circle if not.
So, imagine knowing very few families who can afford to buy a home. Like, at all. So long as we're still comparing the Netherlands and the US, I don't think there's much of a contest.
That said, the central thrust of your comment holds true; always room for improvement.
Now, this may surprise you, since you haven’t bothered to research it (1), but NL and USA differ in home ownership by ~4% (69 vs 65.3). That’s not statistically significant to be honest.
I guess that it all depends what do you get back. To live in a well functioning society is worth a kingdom.
In many places your landlord owns more than half of your income, that could be more worrisome. At least I can vote for my representants in the government.
Finally, I pay over 50% on part of my salary in Sweden, with what I have left I have an awesome live and extra to save, so I will not complain.
My understanding of rent in both Sweden and the Netherlands, is that of any EU capital: easily 30-50% of your monthly income goes to landlords.
Could you clarify your view on this?
So, the swedish housing availability is insufficient and prices reflect that. It is an imbalance that is difficult to solve short term. And probably also overpriced as the interest rates are low and predicted to be low.
Now I am not defending turbo tax’s predatory actions in the past but it’s not complicating the tax system just taking advantage of it being complicated.
In europe we just directly regulate behaviour either by directly taxing it or making it illegal.
In the US they set tax levels much higher and then offer breaks as incentives.
The latter has the philosophical virtue of making behaviour "expensive but not illegal" (ie., in europe you cannot legally avoid the tax).
However it dramatically complicates government and makes US citizens dramatically "overtaxed" absent these breaks. What we in europe often miss is that the US anti-tax lobby is reacting to a very different tax environment that is, on paper, very extreme.
Most of the complications in tax policy are affecting a small minority of people and corporations.
That's true, but you need to have other deductions or a fairly large mortgage for it to be worth taking that deduction instead of the standard deduction. Most people are better off with the standard deduction.
So, no, the reason is that they have all the information already and for most people just need you to verify it. In the US, the tax companies are lobbying the government to keep it difficult. The subject has been covered on HN every year during tax season.
edit: so it's not that different, just a different method of doing so. Good to know.
Even this isn't needed in most cases; things are either done employer side (paid from pre-tax income, like pensions) or directly by the government (basic rate tax is semi-automatically added to charitable donations, so only higher rate taxpayers need to declare it, and they all fill in a short return anyway).
Guess, I could claim that £6 per week for Covid work from home stuff. Wish you could claim the cost of repairing your bike, or public transport costs.
Another example of how the system works - if you are working two jobs, both as a regular employee, HRMC will instruct your employer as to what your tax deduction should be for that paycheck to make sure that things are balanced. For <some large number>% of people, this will be correct, and if it's not, it will rectify itself over 2 or 3 pay periods. If that's _still_ not enough, a phone call to HMRC (usually taking less than 10 minuts for the two times in a decade I've had to do it) will resolve the issue in your next check.
(I forget the exact percentage.)
You can either:
* Gift that remaining amount to HMRC by doing nothing (it will not go to the charity)
* Claim it back (I don't know any other way to do this other than filing a self assessment)
If the donor donates that amount as well and we loop infinitely, the final amount received by the charity would be exactly 1.5625x the originally-donated amount (assuming that the HMRC allows arbitrary small fractions of a penny to be claimed).
Explanation: if you donate an amount x, the final amount would be the infinite series x + sigma(0.25*0.2^(k-1) + 0.2^k, k=1, k=inf), which is the sum of two separate geometric series, so for each one, we can use the formula a/(1-r), where 'a' is the first term (0.25 for the first series, 0.2 for the second) and 'r' is the ratio between each term (0.2 in both cases).
Half goes to the charity, and half to the donor.
Someone on PAYE will have most of the deductibles handled by their employer (pension, any salary sacrifice schemes etc).
Oddly, buy-to-let landlords do retain this deductible, though HMRC have fiddled around with how this works over recent times.
That simply isn't true. An income of £80,000 puts you in the top 4% of adult earners. A salary of £100,000 is probably in the top 2 or 3%.
This was discussed extensively at the last election when Labout proposed a new tax rate for people earning over £125k https://election2019.ifs.org.uk/article/labour-s-proposed-in...
It can be more tax efficient to file tax paperwork, but I don't want to do paperwork, so I just had an umbrella employ me when somebody insisted on hiring me as a "contractor" and the umbrella handled the paperwork for which of course they keep a fee. As far as the government is concerned I just had two PAYE employers, the umbrella and my "real" job.
Having multiple employers also does not require filing taxes. One of the employers gets given a zero tax code and they tax all your pay at full rate, the other one gets a normal tax code which reflects your personal allowance and other considerations. My tax code was oscillating all over the place - but that's not a problem it's all automated.
If you love paperwork you can choose to do all the paperwork. Or if you love money and don't hate paperwork maybe you can save a few hundred quid by filing and I hope it makes you happy. I hate paperwork, and I have plenty of money. So, no, despite earning a lot of money and having worked as a contractor I preferred to stick with PAYE.
The HMRC will take a fair cut of my gross income, which is fine, and then leave me alone whereas an accountant earns money by bothering me with more paperwork.
How do you know it's fair?
Accountants don’t bother you - once a year they ask you to sign your accounts.
I'm guessing you're conflating professionals with contractors, as most high earning professionals I know do not need an accountant to file their taxes, as it's all just done on a self assessment, which is extremely straight forward, and there's little opportunity to game that system effectively.
Meanwhile contractors operating through Ltd entities (now may be hamstrung somewhat with IR35) absolutely should be leveraging an accountant to take advantage of the various ways to reduce their taxable earnings.
Yes you don't need an accountant (and I didn't say that you did) but if you want one instead of doing it yourself they just about £100 rather than I don't know how many thousand that would cost you in the US.
But mostly these days, unless you run a company, you don't really have to change much about your pre-filled tax statement. Only once have I experienced that my housing association made addendums to the yearly tax report that needed to be changed in my tax statement.
I also lost some money on micro loans last year that apparently I had to file deductions for myself, but it amounted to so little money that I just let the state keep that money.
A fairer comparison would be with the tax system of a small US state or a large city in the US.
Edit: Downvoted as it goes against the narrative, lol.
Lobbyists were supposed to be for promoting the interests of small groups that might not have the representation among a politicians constituents to warrant paying attention to. Instead we have rampant and excessive spending by corporations that lobby to keep their monopolies over segments of the market that harm American citizens.
I'm not convinced $5m a year would make such a big impact.
* Special-interest groups whose preferential tax treatment might be threatened if there's a push to simplify the tax code (as having the government do the taxes for you kind of requires the taxes be simpler to do so).
* Ideologues who hate government spending but don't think that tax cuts count as spending.
* Anti-tax crusaders who want to make filing taxes painful so there's more grassroots support for cutting taxes. (Think Grover Norquist here).
However, this Turbo Tax monopoly needs to go. There should be a free (OSS) software that can file the taxes.
Having filed taxes in America and Norway, the American system is designed to make you fail and to use paid for nonsense to do something that is incredibly easy.
But why? Both have the same outcome but one is more work and costs more as well as has a greater chance of you getting it wrong and being fined in the process.
Would you also prefer supermarkets to make you calculate the total amount you owe when you get to the cashier, making sure you applied all promotions and frequent shopper deductions manually?
Like In every negotiation the advantage is on the side of the party who has the most information. The government first disclosing what they know gives you as taxpayer an advantage.
So many reasons why I don't support this. Ease of filing is one of the aspects, rather small for me.
1) USA's government is far more incompetent than Dutch
2) If US IRS sends me a prefilled tax form with erroneous income, say off by 10%, sure I can correct it and file it but now the onus of proof is on the citizen to disprove the error. You might say 'Ok, it is just prefiling it, you can always correct it' - future laws will ask for proof.
3) For a small and nimble country like Netherlands it works very well. Voicing concerns in Netherlands is direct and easy. Not here, USA would mess this up big time.
4) Ideologically, I have issues. It would be extremely orweillian and big-brotherish to get a tax bill from the government - yes I know its just 'pre-filling the boxes' but it will creep up from there.
5) I hate paying for Turbo Tax but there is no denying - it works extremely well. USA's federal system with 100% gaurantee would not be as good. We need to go open source, not put more power in the hands of the massively incompetent IRS and more generally Federal Government.
6) Local and State taxes - this would mean absolutely a patch work of systems that are supplied by shitty software companies to local and state governments. Hard pass.
7) Laws would creep up and change to not just say pre-fill the tax forms but would require massive effort from the citizen to disprove the government. If the filing process initiates from the citizen, the government has to go out on a limb to prove that it's incorrect which is how it should be.
8) I would support ease of filing taxes. But hey! We have that. It is called 1040EZ which takes no more than 10 mins for simple taxes. No software required.
9) I prefer totally offline tax filing. I use Turbo Tax but always print out the tax forms. You might think this is old fashioned but I like doing things old fashioned way. I don't want to digitize anything especially when it comes to automated shitty SaaS hired by the government, I have zero confidence.
10) Even without OSS, I just think that $79 + $____ owed taxes is the marginal rate. $79 -> goes to private industry (Turbo Tax, which does a great job) and $_____ owed to the government. I don't want tax payer money to fund a massive national 'prefiling' tax program. I would support getting rid of $79 effective flat tax that only goes to Turbo Tax.
If the only advantage is the 'pre-filling' part, then I much prefer assembling the data (W2, 1099s, etc) myself and file taxes. Period.
Why? The government gives you all they know and you can then accept, amend or totally rewrite the return. I don’t see the downside to this.
“2) If US IRS sends me a prefilled tax form with erroneous income, say off by 10%, sure I can correct it and file it but now the onus of proof is on the citizen to disprove the error. You might say 'Ok, it is just prefiling it, you can always correct it' - future laws will ask for proof.”
The burden of proof is on you already when you write your return from scratch. It gets compared to what they know already which is the data a prefilled return would contain.
That said I did not downvote.
The problem is that I am not a tax expert and but it rings a lot of alarm bells of expansion of government power.
We're effectively bandwagoning behind Netherland's system while ignoring the massive differences between levels of government, size of population and scale, and the overall law making process.
All for a stupendous reason = Ease of filing. Filing taxes on a bus while on vacation is such a outrageously insignificant 'feature'.
To be honest, I objectively like Dutch system for simple taxes similar to 1040EZ form in USA. I philosophically and ideologically oppose it. And, furthermore, I have no faith in our government and its ability to run efficiently.
Citation very much needed; that’s not true for anyone running a business (even a side business), for anyone with shares of stock purchased before Jan 1, 2011 or mutual funds before Jan 1, 2012, and many other not uncommon situations.
Rather than as “the IRS has the same limitations in individual tax return preparation as the Dutch system”.
(GP then goes on to claim that while the IRS has this ability, they are philosophically opposed to this becoming the standard method of tax preparation, which further biases me to thinking that the first reading was their intent.)
And I have no privacy (ooh ooh)
I always feel like somebody's watching me
Who's playing tricks on me?
And I don't feel safe anymore, oh, what a mess
I wonder who's watching me now (who?), the IRS?"
Only at the very end, did they reveal that it was in fact for the paid version, with no way to change it to the free version and also keep the work. Essentially holding my work hostage.
So I had to redo it again in the hard-to-find free version. I am now anti-TurboTax for life.
What do a private company's payflow dark patterns have to do with mass surveillance by a totalitarian state? Everything slightly dystopian isn't "real 1984 shit."
To help you out since you won't help yourself: the end of 1984 shows how psychological torture brings hard, rational people to doublethink. "I will not pay for my tax return. I will pay for my tax return."
I asked you a question in earnest, which part of that was not "responsible?" You tried to answer, but we both know it wasn't good. You're stretching "doublethink" to include falling for their dark pattern? In the context of 1984 doublethink regards indoctrination. Further proof you've never read it.
Hypothetical scenario - Real 1984 shit would be to get a tax bill prefilled from the government to get you to sign on a dotted line. If you want to contest it, you'll need to hire lawyers but most refuse to work with you. Average citizen is left to defend themselves which is an impossibility. Sign on the dotted line or get arrested.
Folks, we need to go towards an open source route. Not put more power in the hands of a massively incompetent government.
Switched to a different service.
I know people want privacy, but I'd sell my income and personal company finances for $500. Where is that tax company?
It's almost refreshing to see such an obvious "fuck you" move, without having it be covered by tons of PR and legalese.
If IRS already know precisely how much tax I owe, and whatever I "claim" has no power, why do I need to play the game of "cat and mouse", every year? Why not just send me a pre-filled 1040 that their internal algorithm calculates and ask for my approval, like those Europeans do? How is this more "prone to raise tax"?
The tax preparation industry has successfully lobbied to stop the IRS from being able to do this.
I've always found the US tax system bizarre.
They certainly could develop the ability to do your return for you, but it would be an effort.
Still, it would be a good option for those who don't want to know. I.e. have the option of doing a return which you calculate yourself (which is then corrected, based on the input values in it). Or the option of just submitting the inputs and having them do everything.
Then again, I don't use TurboTax/etc, I do it by hand every year so it isn't a black box for me.
US citizens can still vote absentee while abroad, so no, not the same thing.
Almost nobody pays this. Moreover, it's not ridiculous that if you're a tycoon traveling the world and you're implicitly using US citizenship as your escape card, you should pay taxes.
Anyone who has lived abroad knows most countries don't want to jail/detain other country nationals.
You've got a biased view here. This is not a tycoon level of earnings. That's a standard citizen who moved abroad and works as a (senior) software engineer.
Do you have statistics to back this bold claim?
There is an additional problem in the form of FBAR/FATCA requirements, which impose a huge burden on taxpayers abroad. Ever tried to report the exact max amounts and interest in all of your accounts? It's not fun, it takes a lot of time and effort, and it costs money.
Not only this but it's difficult to open accounts abroad as an American because foreign banks really don't want to deal with filing all of this paperwork for the IRS.
Has anyone personally had to pay taxes to the US while living abroad? Not talking about a stock sale or business sale. Talking about making income abroad and owning the US for it. I don’t want to hear about your friend of a friend, you personally.
I’ve known people living in places like Costa Rica, China, and all over Europe. No one had to pay a cent ever.
There is the direct financial cost of paying US taxes when living abroad, but it is also a significant cost in time and energy to file taxes for 2 countries. It can get pretty complex, so many need to hire a tax service to handle it properly.
Then there are the additional reporting requirements for any banks that you have accounts with, so some banks will not allow you to have an account with them because you are a US citizen.
The point is that there are some real downsides to maintaining US citizenship when living overseas.
There are many upsides of course, like being able to return to the US at any time and live and work there. If there were an emergency situation, I could probably count on the US embassy to help me evacuate if necessary.
Overall, it's a cost/benefit evaluation. If you have citizenship in another advantageous country (or country in a powerful union like the EU) and significant resources, I can see why it would be tempting for some to drop the US citizenship.
Yes the US will help get you out when you need to. Hostage rescue by special forces in Nigeria. State Department Wuhan evacuation in Jan 2020. 100,000 people evacuated by State Department as of June 2020.
> How much taxes do you pay to the US?
Anecdata won't get us very far in understanding.
The point is there are plenty (no idea the exact number) of US citizens abroad that pay taxes. If you're making much over ~$110K and don't have significant deductions, you are paying US taxes. As you can imagine these people are typically experienced technical engineers, executives, business owners, etc. True, most US citizens abroad won't go over the ~$110K, but many do.
Either way, you still have the burden of filing taxes in the complex US tax system which is a non-trivial cost in time and resources - in addition to filing taxes in your host country. Is it worth it? Yes, for most, but simplifying the overly complex tax requirements would make it a lot less burdensome for all US citizens at home and abroad.
I revoked my citizenship 2 years ago, after going through a stock sale here in Canada.
- cost me around $20,000 for the lawyer, accountants (had to go back and do 5-6 years of taxes), another $3,000 (I think?) to the US for the revocation process
- had to go to the Bahamas in order to get an appointment at an embassy, I never got a response from the ones here (this was the best part, nice little vacation during Canadian winter xD)
- cost more tens of thousands in Canadian tax as I couldn’t claim all of my tax deductions in Canada for the year of the sale of it would’ve pushed me over 25,000 owing on the US side and meant I’d have had to pay (there’s a program for clearing up to 25,000 owing taxes when you revoke now)
- the IRS fucked up and came back to me this year as owing so I’m continuing to pay the accountants to deal with that for me
- caused untold amounts of stress for myself and my wife
I had previously basically ignored the whole situation as it seemed entirely ridiculous that I should have to deal with this, however the US has started forcing foreign banks to ask their customers about their citizenship status. It didn’t seem smart to lie about this to my bank (who also happens to be my wife’s employer), so it seemed like I may have been ending up on the IRS radar at some point regardless.
All in all an entirely SHIT situation even though technically I probably never would’ve owed outside of your caveats about a stock sale. Had I been compliant it would’ve cost me in money and time each year.
We were concerned that my kids would also potentially be US citizens but it seems like I would have to have lived there for some amount of time for that to kick in.
Yes, I'm living in Iceland at the moment and paying income taxes in the US.
Iceland has a teleworker visa that lets you live here tax-free while working remotely for your current employer. That's a fantastic deal for most countries, but I'm not saving any money while we're here. (We're not doing it to save money, just doing it to social distance and enjoy the scenery.)
It's a minor inconvenience for me, but that's because we pay an accountant to handle a relatively complicated tax picture already.
US Tax law is far too nuanced and complex for this. Just simple things like donations create issues.
Donations to registered 501(c)(3) charities are tax exempt. But how does the IRS know if you gave the Salvation Army bell ringer $20? You have to tell them. On your tax return.
Medical expenses in excess of 7.5% of your income are also exempt. And the IRS has no clue which of your expenses were medical. So you have to tell them.
It's far more involved and complex than even just this. Did you move? Are you a member of the military? Costs related to your move are not taxable.
There are probably thousands of potential exemptions. Few of which could be automatically identified and credited without massive privacy issues. And even then couldn't be perfect.
That cardboard box you bought at the local big-box store? Was it a tax exempt moving expense?
Oh, and the IRS has been sitting on my return for 2 months now and I did all the work for them. Could only imagine what it would look like if they had to track all of this.
Don’t let the perfect be the enemy of the good.
I bought a house early last year for 250k. Including all the interest, fees, taxes, etc, plus all my family's medical expenses, and even things that I'm not sure I could include, I still couldn't reach the standard deduction. It really is a lot of money for most people.
Various levels of deduction exist in other countries too - for example in Australia. But I get 95% of the form prefilled from employers/banks/insurance and only add what's missing.
Many trading platforms in Denmark do automated reporting, and some gig-economy apps do automated reporting too. But if you setup a lemonade stand, well, reporting is in you :)
The tax authorities also have pretty good phone support. It's a bit overloaded around filing season (but getting through is possible), but if come home from an internship abroad and call them, they are happy to tell you where and how to report income and taxes paid in Canada for example.
I bet it's expensive to offer phone support. But if you want people to pay taxes the best way to do it is to make it easy to do the right thing.
This advice goes pretty much everywhere, if you make it easy to do something, people will do it :)
At any time, you can log in and easily see how much the government thinks you have earned and from who, and which tax rate (tax code) is being applied to you. You can correct this as well if it is wrong.
Having lived in Australia, the US and UK, I've found the UK system to be the easiest to understand and navigate. Australia isn't too far behind. The US is just a mess.
However it is not a "one click to accept the default" system because there's still a lot of important information it does not know.
But nevertheless the yearly filing process is rather straightforward, as the tax authorities provide their own free web app for this purpose. It hasn't always been great but it improved significantly over the last few years.
There are no deductions, for a lot of stuff you just get money directly from the government, as an incentive.
Not sure how IRS is going to know how many dependents I have living in my house or whether I've lost my hearing and am now deaf.
The IRS could use easily use last years data plus what was submitted by companies to pre fill most Americans taxes accurately and people could amend those forms as needed with less effort than starting from scratch.
Yes, EZ file should work for 99.9% of the US. But it doesn't, because the tax code is horrendously complex
IRS could possibly reach into some of that. Or it simply relies on what you reported last year.
But sure, you'll have to correct some details every few years. This might also be the case if you have income from bitcoin, etc.
Yes, the govt has an interest in knowing the source of revenue for banks. Not only for money laundering and tax fraud, but ensuring the banks have stable income sources to avoid bank failures.
Any Intuit employees who at competent at tax preparation
could be employed by the IRS, which takes in 4-6 dollars
for every 1 dollar it costs. Win/win. Would never happen.
Don't get me wrong, I don't support their monopoly. The only real solution is to move away from such a complex tax system and do things European style (no tax return).
In fact, USPS is ranked as a "more trusted brand" than UPS in surveys (#1 vs #8 nationwide respectively). 
Also, "Because the mail never stops..."
Have you ever been to USCIS or the US SSA?
It doesn't matter, as it seems you'll just keep throwing three letter agencies at the wall until something sticks.
They're clearly not set up for success, between their funding model and their role as a bureaucratic obstacle course to keep prospective immigrants out of America. That however isn't their fault (the blame lies with Congress in defining their mandate) and I've found the people I've met in person both friendly and effective civil servants.
US Digital Service and GSA 18f have been doing good stuff for the government for over a decade.
It's the sketchiest URL ever
Yours doesn't load. For those wondering, you can find the link to this site on IRS's website. https://www.irs.gov/e-file-providers/free-file-fillable-form...
Reading some more, that site was created by Intuit. Checking the ToS:
> These Terms of Service ("Agreement") is a legal agreement between you ("you", "your", "licensee"), and Intuit Inc. ("we", "our" or "us").
Looks like their AppDynamics RUM js config is leaking their internal hostnames in the page source too.
In the UK, unless you're a special case (e.g. Lloyds Name) you simply file on the HMRC website.
Then again, we can deduct far less, don't have state AND federal tax, so it's somewhat simpler.
I think that in the South African case the tax system isn't simplistic and I can add all kinds of details that might be specific to my tax requirements.
I'm surprised by how many people seem to be defending the lack of a government provided system on the basis that somehow the citizen will get a worse deal as a result.
To be fair, US's tax code is a wild collection of tax breaks and exemptions so it's very complicated but still...
People have been saying this for years, but Intuit has invested billions in fighting the idea off.
Not only that, for a lot of people, Turbo Tax "feels like" a great thing. If you have a simple tax situation, it takes minutes to go through, you pay 10$ and get your refund very quickly. The free alternative is to fill out a 1040EZ and wait a few months.
For the comparisons to Europe, I'm living in Iceland now, and the tax filing system is incredibly easy simply because the tax system is incredibly easy - there is only one tier of taxation, everyone pays the same percentage. That's the core of the problem. The tax code in the US is incredibly complex, and that's why software like turbo tax exists.
I think the anti-TurboTax argument makes sense, but with a free alternative like freetaxusa.com the idea that the IRS should prepare on our behalf is slightly less compelling.
There's zero reason why the government shouldn't guide you through a government program.
Except, of course, profits for the middleman.
I agree that sometimes getting a professional to help is useful--I've hired people when my taxes were extra complex.
But if your taxes are no more complex than W2+itemized deductions+home owner+passthrough LLC, you can easily do them yourself today. And if you're not sure what to do, ask an accountant and then you'll know for next year.
What would make it trivial is if the government would set up a website to guide you through it. But for some idiotic reason (cough lobbyists cough) they haven't done it.
Every time you pay Intuit, you're making taxes even harder for posterity and guaranteeing your own future expenses.
If you're an employee, your employer does it for you.
The employer just deducts the tax owed by each employee, and pays it to the government every quarter.
The total tax amount owed per month may vary from 10k USD (10 to 20 employees) to 20K USD (20 to 50 employees).
But the catch is: If the taxman is corrupt (highly likely), and the officer-in-charge of the remittance of such withheld taxes is also corrupt (not improbable), do not expect that the full tax amount will end up in government's coffers. Both parties will pocket a "small" percentage of it, per quarter, every year.
This scenario is highly likely for offshore companies, where the real owners are outside (e.g. US, Europe) and there's a "trusted" individual (or group of people) that does the "administrative" stuff for the company.
For non-classified matters, the fact that we are paying customers and aren't privy to the who/what/where/when/why of these important decisions is just last-century.
I think Open Source works well when the underlying work is fun and the software is somewhat timeless to minimize ongoing workload. Tax software by its very nature is none of those things.
Honestly I think OSS is great but this is more fitting for the IRS to do itself rather than hoping that a bunch of lawyers/tax professionals/financial programmers suddenly decide they want to spend their evenings writing the most boring software imaginable.
There is no way I am going to get a bunch of accountants and tax lawyers to write a ton of code each year for free, but ask them to build a plain English questionnaire for a form as easily as you would create a survey in SurveyMonkey? Maybe.
for an actual e-file it's a lot more complex, is called MEF https://www.irs.gov/e-file-providers/modernized-e-file-progr...
I was very happy to find https://www.freetaxusa.com on reddit. Great experience and it cost me $15
Free File is a separate thing, and provides both free prep software and free filing for eligible returns. This is the program that Intuit left.
Is the article expressing joy about Intuit getting beat, or about Intuit beating something?
For example, this is all over the news right now, but suppose your company lets you drive a company car? If you only use it to drive from home to work or other business related meetings, you probably don't need to consider it "income". But what if you can use it for all manner of personal activities as well? Maybe then it needs to be considered for your taxes. So what's the taxable amount of the car? The MSRP x the percent you drive it to non-work activities which of course you keep dutifully and precisely logged? Why the MSRP? Most people try to negotiate car prices under the MSRP. Why not the Blue Book value? In the end, what does the government use to consider the car as income in order to tax you for it?
In other cases, property ownership, and the layered governmental system in the U.S. also complicated things. For example, you might get Federal deductions for taxes paid to local governments on property you own. But what about locales that don't tax property? More importantly, how does the Federal government know you own the property at all? What if you own it, but then "loan" it out to somebody who uses it exclusively? You're the title holder, but should they count it as income a la the previous example and now two people are paying taxes on one piece of property?
These kinds of scenarios are incredibly common and affect people in all socio-economic levels. These kinds of things extend to include retirement holdings, investments, cash transactions, different kinds of corporate bodies that can affect individuals, foreign business/income/investments/etc. and so on.
What Intuit did is take advantage of this messy system, and provide some level of organization on it so that people would stop seeing and paying for CPAs to do their taxes and could do it themselves. They then fed on this like a cancer and the tax system started to reflect and assume Intuit was a public service. Part of this was the fractured and uncoordinated nature of the Federal IRS, State Tax Departments, and local county and city level tax systems that don't cooperate at all even though tax laws that affect one may affect the others.
In effect, the IRS can't put out a complete tax system because the IRS can't process your local tax stuff - the locales need to. So the IRS has relied on external non-government organizations to do it for them.
There has been some constant pressure to provide it as open-source so we could improve it, but, last time I checked, the government was reluctant. There was one guy who reverse engineered the formats and wrote a GPL version that's compatible. I assume it's still maintained.