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Filing Taxes in Japan Is a Breeze. Why Not in the US?

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Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#221

Post by ams6110 »

obstinate wrote: post #198
vonmoltke wrote: post #153

Earlier quoted context omitted.

That's just income. There is also the issue of deductions and credits, which covers many more people. The income portion of my taxes takes me about 5 minutes. Most of my time is spent on the deductions and credits portion.

Seventy percent of households take the standard deduction or have no income: https://taxfoundation.org/who-itemizes-deductions/

For most people, taxes are not as complicated as they are made out to be. If you can file a 1040EZ you can fill out the form in 10 minutes. If you have a "normal" return with mortgage interest it's still not that difficult.

Most people are just afraid of making mistakes (it's not a big deal if you do, you'll get a notice and you file an amended return). Or maybe they just feel their time is too valuable to spend an afternoon filling out forms. But most individual tax returns are really not that complicated.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#222

Post by monster_group »

kelnos wrote: post #210
nightski wrote: post #113

Earlier quoted context omitted.

ReadyReturn sounds like it only works if you have an extremely simple tax return. While that is great, I don't understand how the people with a simple W-2 are having such a painful time with taxes. It takes about 5-10 minutes to finish a simple return. What am I missing?

Assuming you're using tax prep software, you still have to click through all the stuff that doesn't apply to you, and it behooves you to at least skim the text to be sure that law changes haven't changed anything for you this year. Just the act of clicking "no" on everything will probably run you a good 20 minutes, with another 5-10 of actually entering your W-2 data and supplying payment information.

You do not have to go through all the questions if you know your tax situation. It is only for people who are clueless about their tax situation that they have to go through all the questions. If you know you are going to take standard deduction there's no point in going through the entire list of itemized deductions only to find out what you already knew.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#224

Post by dmi »

mstade wrote: post #81
reallydontask wrote: post #69

Earlier quoted context omitted.

HRMC will actually tell if your employer(s) have screwed up and you're due a refund. I imagine that they will also tell you if you need pay more for the same reason, but that's never happened to me.

They might tell, and if they do it's probably not something that's going to happen swiftly. I took a job with an employer in London who didn't get my taxes right, but I was none the wiser of course. A few months in, my tax increased by a significant amount from one paycheck to the next, and this tipped me off to something being wrong. I talked with my employer who looked in to it, but this kept on being the same for…

I had exactly the same situation while at a startup, which got spotted by myself ("Woah why did my taxes jump?") and my employer ("What's this weird tax code?"). Getting it fixed with HMRC was almost trivial, and the refund was very nice.

Years later, I moved to the US. I'm sure it's probably less bad if you've grown up with this system, but I still have no idea what to change (or by how much) to make sure I don't owe taxes next year. I don't understand how to play the tax game, so I'm pretty sure I'm paying much more than I should.

However, a friend has an interestingly different approach: pay as little as possible in taxes throughout the year, set aside what you estimate your tax burden will be, keep the interest, and pay it all in one lump sum at tax time. They refer to this as "not giving the government an interest-free loan".

Edited to add: I never thought I'd say this, but... I miss HMRC.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#225

Post by random_comment »

monster_group wrote: post #208

I hate doing tax paper work like everybody but I would rather do it myself than let government do it. When I do it myself I am very careful to make sure I have gotten every possible deduction. If I let the government do it, most likely I will wait until the last day to review it and then I would say 'yeah looks right' without doing due diligence. If the government makes mistake of omitting a deduction or two on peopl…

The complexity of the tax code is completely unrelated to the cost of running your country, which is what taxes have to cover.

Increased complexity doesn't mean lower taxes or higher taxes, in principle, it just means complex taxes.

In practice, it actually leads to higher taxes to pay for an army of people to check the code is being applied correctly.

In Taiwan they have a system where you can choose to do manual deductions (A), if you think that's in your interest. Or you can take (B) 'the average deduction+10%'. Then you have a 1-page declaration of your income, no deductions marked, but they calculate what the guys who use (A) get, take the average, add 10%, then knock that off your tax bill.

No false claims, no evidence to supply, nothing to check, both sides win, each tax official can manage 100x as many Bs as As.

It's a practical example of how simpler tax codes can result in lower taxes by reducing (needlessly) big government.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#226

Post by monster_group »

Sir_Substance wrote: post #28
i_feel_great wrote: post #6

In Australia, via the mygov tool, for a simple wage earner like me, 10 minutes. All the payroll taxes amounts are prefilled, maybe 10 questions in all. Got my refund in ~ 10 days. The Australian Tax Office has a fairly extensive developers program to encourage more/better tooling and compliance. Edit: The ATO developers programme: http://softwaredevelopers.ato.gov.au/

BTW, the refund is a super-cool thing about the Australian system that may not be super-widespread. The Icelandic system is a very similar pay-as-you-go tax system, so tax is predicted and withheld from your wages over the course of the year. But Iceland errs on the side of under-withholding, if they don't know what your income is going to be. As a result, come tax time, most people get a letter saying "you owe us 60…

Does the Australian government pay interest on the over withheld amount? If not, then it is nothing to rejoice to get a refund. If you are getting a tax refund it means that you not only paid the money you shouldn't have paid in the first place but you also loaned it to the government interest free. The government hands you your money back a year later with no interest and in a depreciated form (because of inflation). Over withholding is financially sub-optimal decision for the tax payer.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#227

Post by random_comment »

mstade wrote: post #93
kartan wrote: post #13

Today I filed taxes in Sweden for the first time. 1. Sign-in from Bank-id at Skatteverket 2. Review pre-populated amounts 3. Digitally sign acceptance filing with Bank-id If I just have one salary from one employer all year round, why should it be more complicated than this?

It shouldn't, and in Sweden it obviously isn't – I think it's great! But the moment you start doing things slightly out of this norm, maybe you rent out your apartment for some time, maybe you have capital gains, maybe you were paid dividend as a small business owner... it gets complex real fast. Skatteverket is a pretty knowledgeable organization though, and quite friendly when you have questions to ask so I recomme…

Also, tax calculations in Sweden are easy.

Q. How much money should I pay in tax?

A. All of it.

:-)

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#228

Post by dhimes »

kelnos wrote: post #209
caseysoftware wrote: post #96

Earlier quoted context omitted.

There's good evidence for this. That was part of the reason the Feds pushed employers to do withholding "on our behalf" during the 1930s. Prior to that, taxes were filed quarterly and then only a small % of people. But people actually saw how much they paid. Withholding was a clever and subtle way for us to never see part of our paycheck so then any tax return we get feels like a bonus when it was actually just an in…

Yep, it's all just psychological warfare. The destruction of the tax prep industry in the US would make me so happy that it would overshadow any negative feelings I might have about my tax payments being more transparent to me. The numbers quoted in the article are insane. Over $10 billion that could be spent on actual useful economic output, wasted. Hours and hours of individuals' time, wasted. It's disgusting. In s…

Even though I really like my accountant I completely agree with you.

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#229

Post by schoen »

fiblye wrote: post #40
huffmsa wrote: post #16

"Hey, we here at The Government would like to make your experience paying taxes less painful. Hence forth, we're just going to take whatever amount we think is accurate, and you don't have to do anything! Just trust us!" Politely sir, take one giant step back from that and your beachfront property in Arizona, and diddle your own face. Now, serious answer? Because EVERYTHING about the US Government is intentionally de…

There's zero correlation between efficient taxing and corrupt governments. The "we want to break government so that people don't trust it" shit doesn't make sense. Why not opt for a good government that you can reasonably trust, and do away with the anxiety and potential harm a shitty government causes? It's like saying you don't wear your seatbelt because the fear of dying makes you drive more carefully.

> It's like saying you don't wear your seatbelt because the fear of dying makes you drive more carefully.

This kind of thing is a real phenomenon:

https://en.wikipedia.org/wiki/Risk_compensation

Re: Filing Taxes in Japan Is a Breeze. Why Not in the US?

#230

Post by monster_group »

random_comment wrote: post #225
monster_group wrote: post #208

I hate doing tax paper work like everybody but I would rather do it myself than let government do it. When I do it myself I am very careful to make sure I have gotten every possible deduction. If I let the government do it, most likely I will wait until the last day to review it and then I would say 'yeah looks right' without doing due diligence. If the government makes mistake of omitting a deduction or two on peopl…

The complexity of the tax code is completely unrelated to the cost of running your country, which is what taxes have to cover. Increased complexity doesn't mean lower taxes or higher taxes, in principle, it just means complex taxes. In practice, it actually leads to higher taxes to pay for an army of people to check the code is being applied correctly. In Taiwan they have a system where you can choose to do manual de…

You can do that in US too. You can take itemized deduction (similar to A you mention) or you can take standard deduction which is flat amount (similar to B). But the US government lets you apply many more deductions after taking either of these and that is where the complexity comes. You can choose to do just itemized or standard deductions in US and not bother about other ways of saving money and then your taxes will be simple like Taiwan. That's your decision.
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