Actually, the title answers the question "Why don't they just do that?"
The question to "Why can't they do that" is simply "they could and it would save tons of money and headaches, but it goes the American Dream (21st century edition) that once you have a profitable business, nobody is to take it away from you.
Due to the designed complexity of our tax code the IRS cannot compute it both correctly and efficiently across the taxpayer base. Instead, they put the burden on the taxpayers, with stochastic validation and penalties (aka audits).
For my part, I hope someone out there is managing to claim those Ottoman Turkish Empire Settlement payments. All I know is that the Empire hasn't existed in 100 years but is something my tax code asks me about every year.
That's a California thing. (Did you know the Ottoman Empire contained substances known to cause cancer?) It is, apparently, a mechanism for survivors of the Armenian genocide to deduct any reparations they may potentially receive from their California state income taxes.
That’s the way it works in Denmark. You get an email saying basically: “here’s a draft of you filling where we have filled out everything for you” you can then go and make any needed corrections and hit submit. Super simple straight forward system.
In Mexico it works more or less the same: All payments are invoiced and signed with a Private/Public keypair unique for the person/company and provided by the government.
At the end of the year, you go into SAT (Mex IRS) page to file your taxes and they provide you with a list of your money Input and Output, and they tell you how much you owe in Taxes or how much you are owed by them.
You still can add other things that were missed by the system.
The Danish system is only super simple if you are a salaried employee. Once you run your own business it’s generally as difficult as the American system.
The Swedish system works the same way, but as long as your own business isn’t too complicated it’s still quite simple to file.
You have to have your books in order anyway, and tax filing is usually as simple as copying over some numbers from the bookkeeping software and then Skatteverket (Swedish IRS) will suggest what is probably the best deductions and periodizations available for you. For my one man consulting business it takes less than an hour, and requires nothing more than having my accounting in order.
Same thing in France. Filling taxes for employees is essentially just clicking a button.
But if you are self employed, you have to hire an accountant. It is not a legal obligation but there are so many things that can go wrong that you are putting your business at risk if you don't.
I once simply forgot to put some income on my taxes. I only leaned about it a year or two later. I not only owed about a thousand dollars, but also I owed back interest. I wish they informed me after 2 weeks.
That wouldn’t work for most people. If you are married, have kids, or own a house, the IRS cannot calculate your taxes correctly.
(Single young people downvoting me. The IRS doesn’t know how many kids live with you, what you pay in mortgage interest, and whether you’re still married to your spouse, all of which are necessary to calculate even simple tax situations.)
The article explains how return-free filing already works in many countries and how it could work in the US. I know it's against the HN guidelines to comment on whether someone has read the article, but you clearly haven't read the article.
From a British perspective, the US tax system seems utterly bizarre, because most people here have never filed a tax return. Taxes for regular employees are deducted at source by the employer. Everyone has a tax code that reflects what allowances they are entitled to; if your circumstances change, you just call the tax helpline, inform them of the change and they update your tax code. Self-employed people do have to submit a tax return, but you can do it all online and the tax agency offers free training on how to do it.
There is literally no reason why salaried employees should have to do their own taxes.
The UK abolished its tax deduction for mortgage interest a couple of decades ago and marriage allowance still requires contacting HMRC, which many people never get around to.
> The article explains how return-free filing already works in many countries and how it could work in the US. I know it's against the HN guidelines to comment on whether someone has read the article, but you clearly haven't read the article.
This article (or something similar) pops up on HN every six months, and it’s stupid every time. It’s shocking to me that people find the idea credible because it doesn’t even pass the smell test. Even if this was about lobbying, there is no way Intuit and H&R Block can outspend all the people who have an interest in simpler tax filing. Seriously, Intuit spends $2.5 million per year on lobbying—there are dozens of things that raise more on crowdfunding each year, such as the “Opal Nugget Ice Maker.” Last year, a board game raised more money on Kickstarter than Intuit and H&R Block spent lobbying.
The UK is a very different country than the US, and much more comfortable with both central government control and taxes. Switzerland also has manual tax filing, and the US is much more similar to Switzerland in terms of taxes as a fraction of GDP, guns per capita, federalism, etc.
Why don't you make paying tax easier? It wouldn't work here. Why don't you reduce your carbon emissions? It wouldn't work here. Why don't you make healthcare affordable? It wouldn't work here. Why don't you make it harder for psychologically disturbed adolescents to access semi-automatic weapons? It wouldn't work here.
It's the same argument ad nauseum about every political issue since before the civil war. The US is unique, the US electorate have strong and immutable views, the US cannot learn from anyone else. Time and time again, educated people dismiss the possibility of change, dismiss the possibility of persuasion and compromise and reconciliation, dismiss the possibility of shifting the Overton window and changing the zeitgeist. That isn't common sense, it's political nihilism. The consequences of that nihilistic ideology are writ large on the American political landscape and they are proving to be disastrous.
Whether or not American culture can be changed is besides the point. My point is that the article misidentifies the reason we don't have automatic tax filing. It's not the $5 million in Intuit/H&R Block lobbying, which is not a large amount of money. Intuit/H&R Block are simply riding much more powerful political forces that exist for other reasons.
(For the same reason, the $5 million in NRA lobbying each year is not why we don't pass laws limiting access to semi-automatic weapons for "disturbed adolescents." It's voters like me who are morally opposed to the government keeping a list of who can and cannot exercise their 2nd amendment rights. The lobbying is just so the NRA can remind politicians how many of us there are.)
That’s a self-refuting assertion. If lobbying works, why would it be so cheap? The economy has tons of competing interests—if they could get their way through lobbying, that should bid up the cost of “buying” politicians.
For example, Grover Norquist has no personal stake in keeping tax filing complicated (he doesn’t own stock in Intuit or H&R Block as far as I know). But he spends a lot of time on the issue for ideological reasons. You’re telling me that there’s not a billionaire Democrat who could throw $5 million a year at the tax issue for funsies? Or public unions who would benefit from simpler tax filing allowing taxes to be raised more easily? If it was just a matter of outspending Intuit and H&R Block, someone would do it. But I could give you $10 million a year (double what the tax companies spend) for this issue, and you would not be able to lobby tax simplification into law.
Why would people spend money on something like this “for funsies”? You don’t even take your own idea seriously or provide a credible reason other than “why not”. Intuit and H&R Block have a specific goal and target it with specific dollars each year. Over time that builds influence and control.
Grover Norquist absolutely has an interest in keeping taxes complex, it’s his entire basis for influence and power. His fight is about lowering taxes anyways, not complexity.
Here’s the flip side to your stance. If lobbying has no influence, why do privately held businesses spend so much on it each year? Wouldn’t these rational actors stop wasting money if there was no ROI?
You can’t build influence and control with $5 million a year in lobbying. It’s just not very much money. There are a lot of public interest organizations and concerned individuals who could spend that kind of money (and do). They spend it on other issues instead because they know this tax filing issue won’t go anywhere.
You’re missing the point of the Grover Norquist example. Why is tax filing something Grover Norquist cares about? He’s rich—this doesn’t affect him directly. And he doesn’t make any money off tax preparation. He campaigns against tax filing simplification because it taps into a very large anti-tax movement that he’s part of. It is that movement that keeps tax filing complicated. Intuit and H&R Block don’t create that movement through lobbying; they lobby to tie their issue into the larger movement.
As to the amount of lobbying: private companies don’t spend much money on lobbying every year. Total US lobbying expenditures is $3.5 billion, out of a $20 trillion economy (and a $4 trillion federal budget). (And that’s not just companies, but includes public interest organizations.) If lobbying had direct, non-speculative impacts on legislation, companies would do a lot more of it. Look at the tax filing example. H&R Block makes more than $3 billion in revenue each year. If lobbying had direct results, they wouldn’t be able to protect that cash cow with less than $3 million a year in lobbying. A competitor would come in and outbid them for legislation. (Indeed, corporation versus corporation lobbying is probably the most typical kind. E.g. all the money Google spends on copyright lobbying is best seen as a proxy war with Hollywood over whether copyrights should be weak, which favors distributors like Google, or strong, which favors Hollywood.)
Of course lobbying is important enough that companies do it. But it’s not transactional like people make it out to be. Lobbying involves hiring professionals to make presentations to staffers about specific issues, tying them into general platforms that politicians already believe. Tax filing is a great example. Intuit and H&R Block aren’t going in and spending $5 million to convince people who love taxes to oppose automatic tax filing. They’re using that money to lobby legislators who already want Americans to be outraged each year in April 15. They connect their specific issue to the larger platform the politician already supports. “Simpler tax filing is the first step to Danish style 60% tax rates.” Then, they educate the legislator about relevant pending legislation. “Elizabeth Warren has introduced an automatic tax filing bill.” And they arm the legislator with arguments and white papers they need to oppose the lesilation. “Making deductions opt-in will result in a $45 billion effective tax increase on seniors, who will be to scared to challenge the ‘bill’ sent by the IRS.”
==You can’t build influence and control with $5 million a year in lobbying. It’s just not very much money.==
You still haven’t provided any evidence. Your comments in this thread are mostly ideological arguments.
From the article about them directly lobbying against bills on this issue:
==The disclosures show that Intuit as recently as 2011 lobbied on two bills, both of which died, that would have allowed many taxpayers to file pre-filled returns for free. The company also lobbied on bills in 2007 and 2011 that would have barred the Treasury Department, which includes the IRS, from initiating return-free filing.==
To believe his assertion you must first admit that the market competition is apparently broken and we have numerous profit-seeking companies who invest heavily in lobbying while seeing no benefit.
There will never be a direct link made because no politician will say, “I am voting against this bill because Intuit took me to a nice dinner and contributed $100k to my re-election campaign.” We do have evidence that constituents want taxes simplified, bills have been presented to fix this problem, companies lobbied against the bills, and the bills died. What’s your theory?
He was not saying that lobbying was completely ineffective. He was saying that lobbying rode supported an ideological belief that taxes should not be simplified, and the cost to lobby against the combination of the 5MM in lobbying plus the ideology is a lot more than 5MM. His evidence was that the relatively low value of 5MM hasn’t been outspent by an interested party, there being so many such people who could afford it. I don’t know if that is the case but I would like you to address the central claim. I don’t have a theory of my own.
I would suggest the burden is on proving that there is a legitimate group of people who think taxes should be complicated for ideological (not political) reasons. You readily accepted that premise without any provided evidence. It seems to me that politicians are making a calculation that it is advantageous politically to have complicated tax filing process. Oddly, in the recently passed tax bill the House GOP campaigned heavily on the idea of taxes filing so easy it could be done on a postcard, an admission that people want simplicity. When the law ultimately passed, they didn’t follow through on that promise, maybe due to lobbying maybe for political reasons.
No party has as much direct interest in this issue as tax preparers. That they haven’t been outspent is not itself evidence of anything.
I did not accept the premise. Please don’t mistake my attempt to improve the discussion as agreement with anyone. I just want this discussion to be better. I don’t think demanding burden of proof is a comment worth making; could you at least explain why you think there can’t be such people?
I do agree it is interesting that the GOP campaigned that way, incidentally. Regardless of what degree of support for complicated taxes there may or may not have been, support for simplified taxes in the large, populist wing of the Republican Party plus presumably broad support in the Democratic Party should mean more changes to tax collection soon.
==could you at least explain why you think there can’t be such people?==
It's not that there can't be such people, it's that there hasn't been any credible evidence provided to prove there actually are such people. That both sides of the political spectrum use the same language is pretty strong evidence that there is broad support ideologically for a simpler tax code.
Bringing up Grover Norquist seems like a red herring, as he is himself a lobbyist. His organization, Americans for Tax Reform, describes itself as a group that "believes in a system in which taxes are simpler, flatter, more visible, and lower than they are today." [1] Yet, they are used by rayiner as an example of an organization ideologically opposed to simpler taxes and tax filing. If anything, we should be adding ATR's own $5 million of annual spending to the total lobbying dollars being spent against a simpler system.
==should mean more changes to tax collection soon.==
This is the central point. The tax code was just completely overhauled and it included almost zero simplification, even though it's main proponents used that exact messaging in their sales pitch.
The article suggests that the lack of action is, at least in part, because of lobbying. It provides the evidence of lobby spending related to this topic and the ultimate death of those bills. The also have a quote from Former California Republican legislator Tom Campbell, he says he "never saw as clear a case of lobbying power putting private interests first over public benefit."
It's rather difficult to determine elligibility to purchase firearms without keeping a list. Unless your statement implies that everyone should be eligible, in which case: reasonable people may disagree on this point.
Except complex tax law benefits corporations as well, creating emergent properties that can be exploited. You'd have to outspend more than Intuit to change things.
"Seriously, Intuit spends $2.5 million per year on lobbying—there are dozens of things that raise more on crowdfunding each year, such as the “Opal Nugget Ice Maker.” "
The difference is that these companies keep spending the money hooking up with the right people (lobbyists) that get them results. Sure the public, charitable companies, trusts, and so on could compete with them for politicians. They don't, though. So, the lobbyists getting politicians fame, fortune, and re-election are the ones that win since those are what politicians are all about. That's also why the companies lobbyists work for seem to get all this legislation that benefits them at our expense despite so many good reasons to not do that... if they worked for us.
Lobbying, if applied, should be one of first things to consider that might motivate a politician's actions. The evidence favors that it does here in the U.S. a lot. It and votes from popular/hated topics seem to drive most of political, decision making.
Except you’re forgetting public unions, which lobby extensively and would benefit if tax filing were simplified (allowing taxes to be raised more easily). If spending the money would get the result, they’d do it.
It’s also possible that unions have other areas that are more important to them as a group (worker rights, fighting right-to-work, healthcare, etc). In fact, I’m not sure any group has as much interest in this as tax preparers, hence their annual lobbying.
I don't know UK tax law, but there is public healthcare. So one major deduction in the US is completely moot in the UK. The IRS doesn't know what your healthcare expenses were for the year. There are a half dozen similar scenarios. Yes, a lot more could be automated, but it's also the case that too much automation would wrongly automated people out of their money. It would make sense to mail people a prefilled sheet that says, "here's what we know about. Review and make sure you check x, y, z, etc., to see if it's applicable."
Brokerages are required to report sales of securities and cost basis information to the IRS when you sell. The IRS already has information about your capital gains and can fill out that part of the return as well.
If you bought the asset before like 2010 they don't have cost basis info. Believe it or not people sell assets bought in like 1970 and report that on their tax forms. Full automation is a ways away...
Not sure what your point is; this is a thread about tax filing in the US, and the parent was comparing it to the UK. You, referencing capital gains tax, were (I assume) referring to the US? So was I.
The first £10k of capital gains is tax free in the UK and that covers virtually everyone. The vast majority of people have no capital anyway (your home does not count, and cars generally do not appreciate).
So the IRS mails you a questionnaire that asks these questions, you send it back, and they calculate your taxes automatically. No need for the $40 TurboTax fee, no need to type your W-2 information.
But if what you say is true and the IRS can't calculate what you owe, that would mean they have absolutely no idea what you should be paying and you could get away with paying basically anything you want as long as you're not randomly selected for audit.
They also can't force you to type truthful numbers into TurboTax, paper forms, or whatnot. Hence the audit in the first place. There's no reason you'd have to file your own taxes with or without TurboTax. The IRS just asking the questions, optionally online, and having their computer crunch the taxes ought to be a no-brainer but I don't know what the real reason is why that is so difficult in the USA (and the article didn't really answer that: I doubt Intuit has more than a squat of real-world influence on the thing).
I live in Scandinavia and that's how it works here: you basically get a proposal based on what the tax office knows (salaries, local capital gains/losses, interest deductions if you have mortgage etc.), and then you submit diffs, if any, and they calculate everything based on that.
I've only ever had to change my tax proposal when I've married/divorced/had kids or had activity in a brokerage firm abroad (who wouldn't report my gains directly to my local authorities). Buying and selling property also shows up automatically as the registration process goes through the government anyway.
Now the tax authorities have even stopped sending any papers with a return envelope. They just point to the online service where you can easily augment whatever fields that might be missing input.
As a fellow Scandinavian, I find this kind of American distrust of government quite amusing. “We don’t like it when the government controls us, so let’s have it bury us in paperwork and complicated bureaucracy whenever we want to do anything whatsoever so we remember that the government still exists”.
Also, in many cases, there could be other, existing records that could optionally be sent to the IRS about changes in tax filings -- for example, the hospital could choose to forward to the IRS birth/death notices, same for marriage certificates and courts that approve divorces.
Isn't that why there is an audit process? Audits are a tool to ensure compliance with a stochastic threat due to high cost of research and enforcement. For things they can check automatically they already do, but audits can find more detailed things, at a higher cost to carry out.
TurboTax and Quicken are free for everyone making under $60,000, which would be most people whose taxes are simple enough that it could be done with a questionnaire.
The IRS has some information about what you make obviously, because employers withhold your income. But they have very little information about deductions. Of course the IRS could calculate a maximum tax amount and put the burden on you to apply for deductions, but Republicans would flip their shit because it’d be a huge effective tax increase. They want tax season to be painful every year.
Which gets to the point that is whizzing by everyone’s head. Intuit and Quickin aren’t single handedly lobbying to keep tax filing complicated. You could probably crowd fund an opposition if that was true. Intuit and Quicken are leveraging a political situation that exists for other reasons.
TurboTax is not free if you need to include gains/loss from multiple sources of income. I.e., this year I made far less than $60,000 but as a student with a part time job, internship stipend, and petty stocks, I would have required TurboTax Premium.
Neither the article nor anyone here is saying that Inuit are singlehandedly keeping the law in place, only pointing out that they are lobbying to do so.
> If you are married, have kids, or own a house, the IRS cannot calculate your taxes correctly.
If your marital status changed, or the number of dependents living with you changed, they can't calculate the taxes.
For most people these will not have changed.
The IRS could calculate taxes under the assumption of no changes, then send the taxpayer a report of assumptions made. If any of the assumptions are invalid, the taxpayer would only need to file corrections for those items.
And even if they do change, there's existing government records that issuing authorities could optionally pass along to the IRS -- hospitals generate birth and death records, towns issue marriage certificates, and courts issue divorces. This covers most changes in tax status, with really the only iffy area left is when parents decide to stop claiming their children as dependents.
> The IRS doesn’t know how many kids live with you
They can guess based on the prior year, which generally only changes during two years per kid. If they're wrong, you correct it on the form and send it back.
> what you pay in mortgage interest
Your mortgage lender files form 1098 with the IRS with interest you've paid. The IRS already knows this.
> and whether you’re still married to your spouse
Same as the kid situation. They guess based on the prior year, and if you've gotten married or divorced recently, you correct it on the form and send it back.
All of these issues are either not issues, or are trivially worked around.
If they don't know automatically, it's only a failure of automation or lack of interfacing with credit agencies and state records. They certainly have the power to know all those things, and they will find all that out, if they choose to audit you.
But forget about the IRS automatically collecting what could possibly be relevant from everyone. If some of that stuff isn't automatically reported, there's no reason to force reporting, The IRS would operate as it already does, choose a percentage to audit and get those records from that percentage (0.6% of total filers or 933k people, including 15% of people who make over $15mil) anyway. (That panopticon you're worried about? Don't worry, it's only watching approximately a million people per year, no big deal, right? I realize 1 million is not 327 million, but I have difficulty getting upset about broader financial surveillance (you could even make it optional, so only people who think they're likely to get audited would opt in) when 1 million people per year already get that treatment, plus harassment (granted some of them brought it on themselves, but many did not and just made stupid errors that a better system would have avoided completely, or didn't make any errors and the IRS is just fishing)
The vast majority of people only end up reporting stuff the IRS already knows about (W-2, 1099, marital status and children that were already reported for the last N years, etc.) What good does it do to have people manually file the same information employers and financial institutions already file? If the IRS is not getting some information, and someone's going to lie and tell them it's all good when they get a summary and tax bill, they're going to lie on their taxes even if they're preparing them manually.
All the current system is, is a hand-out and make work scheme for tax preparation people and companies.
I.e. a failure to implement a surveillance state in which the government knows every move you make, financial or other, so there is no need to claim anything and provide receipts: they have that already, and more.
I’m pretty sure the federal government tracking details about where people live and what they spend in daycare is one of the signs of the antichrist. (No, seriously, the federal government doesn’t track this information about you. It can use its police powers to get that information if necessary, but that’s different.)
Can you cut the fucking hyperbole? In this thread you're being obstinate and snarky about what the IRS can't possibly know about you. You're demonstrably wrong about some of them (e.g. mortgage interest), and half a dozen people are suggesting practical ways for the IRS to learn about some of the other things, or for you to correct them.
Indeed, especially as the US legal system gives strong protections in this area. For instance, if you sell illegal narcotics you’re required to buy tax stamps from your local tax office. Due to the illicit nature of the transactions, they have to sell them to you in total anonymity. The IRS only cares about receiving your taxes, not snitching, and there’s no reason for this to change.
Even if they don't know that in the US they can calculate your regular taxes without those and you would just adjust that in the tax confirmation that they send to you with their calculations.
As someone who has never filled in tax in my life: it's mind-boggling that the people in the US have to do it.
They could. As mentioned above in Denmark this is all known to the tax authorities, either by public registry (number of kids, civil status) or by banks, financial institutions, insurance companies and your employer reporting.
If the IRS doesn’t know those things, how could they ever audit someone? The 80/20 rule should absolutely be applied to taxes. In unique situations the citizen can go through the manual process.
The IRS could make a web site where you fill in only those things they don’t know already, and it then makes all the calculations for you, and allows you to approve or change them?
Killing the MID for owner-occupied property puts landlords at a relative advantage in purchasing property, which seems like an undesirable public policy to me.
The MID can be thought of as a tax subsidy that renters (who tend to be poorer) pay to land holders (who tend to be wealthier). Either the tax code needs to change to subsidize renters, or just leave everyone on their own...
Renters also receive the benefit of the subsidy on landlord mortgages (that would otherwise increase costs to landlords which would tend to constrain supply).
The poor pay less in taxes. It would not surprise me to find that if you could trace the entire effects perfectly that poor renters are net beneficiaries of the policies particularly now that the owner-occupied MID has effectively been eliminated for houses on the low end and it was previously capped on the high end already.
Now, it mostly directly benefits landlords, which I’m sure is entirely a coincidence... (Our income tax system is based on taxing income/profits, meaning that eliminating business interest, including commercial mortgages, as a deduction is incongruous and a non-starter.)
Renters also receive the benefit of the subsidy on landlord mortgages (that would otherwise increase costs to landlords which would tend to constrain supply).
False, by the same logic of land value taxes.
The supply of land is fixed and cannot respond to changes in supply or demand. Or to changes in cost structure, including both taxes and subsidies on the land itself (excluding improvements).
Landlords eat LVT. And they pocket the mortgage subsidy.
Tax codes pick and choose among taxable and exemt income and costs all the time. Your objection is patently absurd.
Is it your position that increasing the annual expenses on properties available for rent by 1-2% or so of market value will have absolutely zero effect on rents?
That seems to mismatch with fairly well-established economic doctrine, possibly to the extent of being Nobel Prize worthy if proven.
It's entirely congruent with economic theory dating to Smith, Ricardo, and George, and finds agreement from economits across the political spectrum, to an extent that's remarkable in a frequently divided discipline.
Its lack of Nobel-worthiness is based on its obviousness, not novelty.
By and large, renters don't rent unimproved land. They typically rent dwellings. Those dwellings are typically funded by loans taken out for the purpose of a profit-making endeavor, meaning they are tax-deductible loans (just like when an airline buys an airliner or an automaker builds a factory).
Seems like the obvious answer is that the IRS should just require you to report those things yearly, then do the math themselves and tell you how much you owe.
Not even that. Like many countries, they can simply send you a card with how much you owe with some very basic info (e.g. number of dependents and income), along with a URL to download the full pre-filled 1040-EZ. If you agree, you sign the card, mail it back. If you don’t agree, you can file your life wn taxes as usual. For instance, you had a kid, or got married, or don’t want to take the standard deduction.
This is completely doable, and in fact is done in many advanced countries today. Even better, it fits in the the GOP rhetoric about wanting to make the same tax form “fit on a postcard” [0]
It is like this in my country, although the form is electronic and 5 pages of A4 paper (if it was printed) but rest is true. I log in to tax office web site, confirm my identity via bank or e-signature, review the form and submit for approval, correct if necessary. Usually takes 10 minutes.
They calculate the taxes on the information you have to supply, right?
(I'm not in the USA, but Canada.)
You could lie on the tax return by not reporting income, or claiming some false deductions and credits; the difference could be thousands of dollars.
They will only be checking the false version for arithmetic or logic errors.
The result might be, say, having to pay $50 more due to some mistake, even when actually it should be $5000 more due to lying.
What this story is about is that the government could provide some service, like a website, where you can just put in your info and have it do the detailed calculations and form filling for you: essentially a government-run version of the software that Intuit and other vendors sell.
The government can't just do this without any input from you, though. They can't just send you a bill for you to agree with or dispute.
Also in Canada. Yeah i know people that work under the table that do this. They'll report traceable sources of income while leaving untraceable income out. It's fairly illegal. It's actually one of the ways they get small time drug dealers, they'll go after them for tax fraud.
Personally, my taxes are simple enough that I could do them with the book if I wanted. I've found suitable tax software that doesn't cost me and is fairly easy to use. I'm not sure what it's like in America, but if you don't have a family, own property, run a business, or make a bunch of income from investments, doing taxes with a calculator really isn't that difficult.
They could use the information that others (banks and employers) report to them about your finances to pre-fill all the forms. That way you only need to add things that are missing and double check what’s there.
Sure! And they could know about all your doctor's visits, so they could do your medical expense credits for you and similarly track every move you make in society. Oh, you paid for $257.35 on your VISA credit card ending in 1295 for prescription drugs this year: that's deductible!
1) I specifically meant "the information they already have", so you would only have to add that which is additional (e.g. medical expenses).
2) There are probably less bureaucratic ways to deal with subsidising medical expenses. Single payer is the nuclear option, but also applying the tax credit in-store and letting the business apply could be a thing?
It's a way to check errors. Mismatches trigger audits.
If you owe lots of taxes, and the IRS sends you their calculations, you might discover that they are unaware of some of your income. Well... guess they don't need to know!
I knew a guy who didn't pay taxes for nearly 10 years, this is a kid that was doing minimum wage work so he didn't think he needed to. IRS sends a letter going 'we think we owe you about 3,000. call us'
There are several ways to send your tax return to the CRA. Ultimately, this may be dependent on how you decided to complete your return.
- By software (electronically) If you selected a NETFILE certified software, it will communicate directly with the NETFILE application servers and transmit all required information on your behalf directly to the CRA via the web service.
- By paper: Mail your completed income tax package to your tax centre.
- By phone: Follow the instructions in the invitation letter for File my Return that you received from the CRA.
"By software" means using certified software, like Intuit's TurboTax. This is the very racket they seek to protect.
More than 32 countries do this: All of Scandinavia, Finland, Spain, Estonia, Macedonia, Australia, India, the Netherlands, Japan, the U.K. and a bunch of others.
Belgium as well. Your employer reports your income to the tax administration, your bank reports your house mortgage for tax deduction and so on. For me it’s pretty much just a bunch of checkboxes check. The hardest part is getting my electronic id to work to log in to the bloody site.
I finished filing my taxes two weeks ago, a day after the pre-filled form became available online on the revenue service's website (works in all modern browsers, on all operating systems).
It took five minutes (two incomes, mortgage, bank accounts, all filled in correctly by employers and banks). Most of that time was spent authenticating myself and my partner.
Anyone fighting this in the US should make a bunch of videos showing average people from these countries filing their taxes in the blink of an eye.
Not really comparable though. Tax filing in the Netherlands is simple for almost anyone who doesn't own a business. That's the vast majority of people. If you do own a business, it's still manageable, just not as automated.
I own a house in a household with two incomes: taxes took five minutes for both of us.
A system like this was launched this year in Poland, this year limited to employees and contract workers, but it's planned to expand to self-employed / business owners as well. If one doesn't log in / doesn't do anything, the form will be submitted Apr 30. If you log in you can update the form (e.g. add deductions or declare extra income), or just accept it as is - then it's submitted right away.
There were some minor kinks, but in my opinion it was a success. Being self-employed I didn't get to use it, but saw how it works. I filed taxes on-line directly from my book keeping software and it took me ~20min, including getting my wife's pre-filled taxes from the govt service to combine with mine.
Many other European countries do things like require you to register with the government within a week whenever you move to a new place. They track much more information about you.
Even in the US you eventually need to basically 'register with the government' (usually in the form of getting your ID/drivers license updated, and notifying USPS of mail service change).
You only need to update your drivers license when you change states, not when you change residences. (And if you don’t drive you don’t need to do that either.) And you don’t neee to notify USPS of your mailing address.
Have you ever heard of someone getting ticketed for not doing this? I have never once notified the DMV of anything, and have driven for years with old addresses on my license.
And, of course, if you don't drive, none of this applies.
I've actually gotten ticketed for this in Texas outside of Austin on the way back from Round Rock. It wasn't very expensive but was thrown onto a ticket for speeding.
I think it was a speed trap(I got a ticket for going 64 in a 55) and he knew he could get an extra infraction if my address was out of date which probably happened a lot with college students because they move a lot, don't update their address, and are dumb enough to admit it to a cop.
That's interesting. I'm not sure I see how it could be anything worse than the penalty for driving without your drivers license (which will always get you ticketed, but rarely anything worse). I can always just not present my license at all.
> I can always just not present my license at all.
Sure, that might work.
But a likely scenario is the officer will ask your name and DOB and look you up on his MDT and now you've got three tickets (including whatever you were pulled over for because now it is definitely not going to be a warning) instead of just one.
Another scenario is the officer discovers you have your license and are just refusing to show your license. In California, and other states, you've now escalated a simple ticket to a misdemeanor with large fine and possible jail time.
Another scenario is you just update your address with the DMV and don't risk compounding your problems during a traffic stop.
Right, I'm not suggesting you can't get a ticket for it (though that's never happened to me; the police always asked "is this your current address" and I'd say "nope" and give them my actual address and that'd be the end of it --- it is handy that I'm a middle-aged white dude, though). I'm just surprised by the idea you could get worse than a ticket.
I don't at all see how you could get in trouble for "refusing" to show your license. You'd just say you didn't realize you had it. (This is relevant to my interests; in Chicago, your DL is also your bond on tickets, and also, when you get a new license, you get a paper temp license day-of, good for several months, and the real license in the mail; I'm holding on to the paper temp and denying possession of the real one if I'm ever pulled over, because getting bonded DL's back is a giant pain.)
I'd be interested in knowing whether you could point me to a state that explicitly says not updating your address is a misdemeanor.
Interesting. It's a cheap fix-it ticket (much cheaper than a speeding ticket) in MN, but (apparently) it's annoying because it requires an actual court appearance (I haven't cracked the code on which offenses require court appearances in Chicago; I've only had to go once or twice. I wonder if those were misdemeanors as well.)
Change of address within Illinois is required within ten days after moving. I remember in Montana it was required on the day you started a job and in that case people were getting tickets
For almost 70% of US taxpayers this is the case. Free of charge tax payment. You literally type in your address and other info along with your w2(these days many w2s have codes where you only have to type in a number and it fills the whole thing in).
Otherwise we're just talking about state taxes which the federal government has no control over.
I expect to see this on some Facebook/reddit post, but on HN it is depressing to see how many people don't realize that what this comment describes has existed for decades.
On the contrary. Free-file does not let you "literally type in your address and other into along with your w2." You have to first choose a third-party tax preparer based on your qualifications (it's not the same across the board). Then you have to remember your password, or create an account. Then you have to hope the preparer's service puts you in the free package, while navigating through a site designed to get you to pay more for things you don't need. Often, you'll have to decline to upgrade multiple times, and it is downright annoying, if not confusing, as to how to do that. And if you do choose the free option, the preparer will not pull in your wages automatically, despite Intuit and others building systems that could (but don't) do this. No, the proposed system has not existed for decades. It has never existed. And as long as we keep listening to Intuit and the like, it will never exist.
Why can't they do this beforehand so you have the option of just clicking "OK" and being done with it?