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

nytimes.com

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

#261

Post by patio11 »

gozur88 wrote: post #174
csomar wrote: post #107

Earlier quoted context omitted.

yeah I was not too convinced when I read the article. The government can easily figure out the taxes for your wage (which your employer did actually figure out) but they can't figure out the taxes on your real estate revenue, and maybe other activities (traded cryptocurrency? freelanced on the side? Airbnb"ing" some of your estate)

I would be willing to bet good money only a tiny percentage of people have income outside their employment. People who have real estate or bitcoin profits could always file an andendum.

You would lose that bet. 12 million Americans filed a Schedule D with $5k+ in capital gains in the last year the IRS has stats on. (That's 1 out of every 8 returns.)

https://www.irs.gov/uac/soi-tax-stats-individual-income-tax-...

There are numerous other ways to have income outside of formal employment in the US. The most salient one for tax purposes is self-employment.

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

#262

Post by lutorm »

desas wrote: post #231
cmdrfred wrote: post #145

Earlier quoted context omitted.

I think the point is they don't want Americans doing the math of taking their gross earnings and subtracting a percentage of it and being reminded of the specific percentage of tax paid and gross taxation every quarter. Taking it from each paycheck quietly is a softer blow than all at once.

Don't Americans get pay slips which state how much they earned gross, how much tax & social security they paid (in dollars) and much they earned net?

Yes but that's just how much is withheld, not your final tax amount.

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

#263

Post by wwalser »

feld wrote: post #62
patio11 wrote: post #50

The NTA (National Tax Authority, cited as the Kokuzeicho in the article) doesn't figure out your taxes for you. Your employer does, as one of the (many!) ways in which they exercise paternalistic control of your life. If you do not have an employer, you get to go through a process which is almost exactly as fun as it is in the US, modulo a modestly competent online filing application. I spent $3k this year on account…

$3k??! How is that possible? I get personal and business taxes done for $200

> How is that possible?

I paid just shy of $3k for tax prep last year. The package of information that I sent to the IRS was more than 50 pages of documentation. I joke with friends that you'd think I was an international oil baron but in my mind I'm a pretty regular person.

Judging from Patio11's writing I would guess that his situation is similar to mine (though he seems more confident in grocking IRS rules and doing his own accounting and taxation than me). Here are a few of the complicating factors that make me want to pay to make the problem go away instead of reading IRS documentation for literal weeks to learn how to do it properly:

* Income in two countries.

* Tax treaty between those two countries.

* RSUs from two companies.

* Options from one company.

* Difference between what stock events are taxable in the two countries.

* 401k and similar account in other country.

* Vanguard ETFs with some sells for loss harvesting purposes.

* Running a company into which I've put some personal cash.

I did my taxes myself using Turbo Tax for around $60/year for years. Until suddenly I didn't and started paying what seems like a lot of money. Once you leave W-2 land, things get complicated more quickly that seems reasonable.

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

#264

Post by sokoloff »

mercutio2 wrote: post #258
copperx wrote: post #202

Earlier quoted context omitted.

Do you run a multinational company? Or how did you afford throwing away $29K for a simple arithmetic error?

He didn't say arithmetic error, he said miscalculated basis. Very different. Here's how it happens to lots of people. 1. Vest RSUs worth $25k-500k, depending on how senior you are and what BigCo you work for 2. Employer sells 40% of your shares instantly upon vesting, for taxes 3. Employer remits that 40% to the government 4. You sell all your shares, because you realize concentrating your risk of investment loss wit…

That's exactly the mechanism of my error, although I seem to recall the amount in question was more like $125-150K of basis miscalculated. (I crisply recall that it was a $29K refund from the amendment.) That did represent multiple years of vested RSUs which I sold all in one year to make the downpayment on our house; some of them I had filed as short-term gains, others as long-term gains, all against a $0 basis.

(I wish I vested $300K of shares per year... ;) )

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

#265

Post by ams6110 »

marssaxman wrote: post #247
ams6110 wrote: post #221

Earlier quoted context omitted.

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 a…

Making sense out of the ambiguously-worded instructions has always been the complicated part for me. I have always found this to be infuriatingly stressful, so I hire professionals to deal with it.

The trick is to not try to infer anything that is not there. The instructions are dumbed down to the point they actually are hard to understand. Just do literally what they say and don't think about whether it makes any sense.

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

#266

Post by malza »

Angostura wrote: post #169
patio11 wrote: post #50

The NTA (National Tax Authority, cited as the Kokuzeicho in the article) doesn't figure out your taxes for you. Your employer does, as one of the (many!) ways in which they exercise paternalistic control of your life. If you do not have an employer, you get to go through a process which is almost exactly as fun as it is in the US, modulo a modestly competent online filing application. I spent $3k this year on account…

In the U.K. If you are employed, your tax is worked out for your through the Pay as You Earn system. If you are self employed you fill in the rather good self-assessment form online and your tax is calculated for you.

They are currently doing a big redesign for self employment. Basically moving from a yearly overview of accounts to an on-demand system - where you pay taxes as they are charged. I hope they don't force people to use the new method.

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

#267

Post by jaysoncena »

I'm not sure how easy it is in Japan but in Singapore, It just took me 10-15 mins to file my tax. 1. Login to IRAS(tax bureau) portal using the national ID (for me as foreigner, I used my employment pass ID) 2. Open the page for filing income tax 3. I entered total annual salary and allowances 4. I have donated to a government-recognized charity and this is automatically reflected on the form. It seems that the charity uploads donation infos to IRAS 5. Check if the tax relief for having a child is there 6. Click submit 7. Review and re-submit

You also have an option to do installment, deducting from your bank account monthly.

I don't have any other source of income so it will be different for other people.

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

#268

Post by henrikschroder »

BoorishBears wrote: post #243
henrikschroder wrote: post #234

Earlier quoted context omitted.

But the amount of taxation isn't connected to the ease of taxation. It's not an either-or. Also, in the US, as other commenters have pointed out in this thread, implementing pre-filled returns would increase tax revenue, since it would reduce tax fraud considerably.

From my comment right below: >Obviously given the choice of a comparable tax burden and simplified returns I'd take it I'm not against simpler taxes, I'm just saying I don't blindly envy Sweden's taxes, just the part where it's easy

Oh, sorry, I missed that part of your comment!

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

#269

Post by gozur88 »

patio11 wrote: post #261
gozur88 wrote: post #174

Earlier quoted context omitted.

I would be willing to bet good money only a tiny percentage of people have income outside their employment. People who have real estate or bitcoin profits could always file an andendum.

You would lose that bet. 12 million Americans filed a Schedule D with $5k+ in capital gains in the last year the IRS has stats on. (That's 1 out of every 8 returns.) https://www.irs.gov/uac/soi-tax-stats-individual-income-tax-... There are numerous other ways to have income outside of formal employment in the US. The most salient one for tax purposes is self-employment.

Let me amend to say "...only a tiny percentage of people have income the government doesn't already know about."

Surely most of that capital gains stuff is stock and bond sales.

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

#270

Post by random_comment »

monster_group wrote: post #230
random_comment wrote: post #225

Earlier quoted context omitted.

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 wil…

> But the US government lets you apply many more deductions after taking either of these and that is where the complexity comes.

I feel you've missed my point. Most countries offer the ability to consolidate some deductions into a standard deduction.

But in Taiwan they consolidate ALL the deductions, as far as memory serves; and the way they do it isn't a fixed amount (e.g. 5%) but the sum of what the other people achieve who go the long route, plus a bonus.

So literally it's 1-page 'sign here', or a complex form.

And it's literally a statistically 'guaranteed' win if you make things easy on everyone (average + 10%).

The US doesn't offer anything like that.

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