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Millions of Americans mess up their taxes, but a new law will help

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Re: Millions of Americans mess up their taxes, but a new law will help

#51

Post by astrange »

anon291 wrote: post #18
CodingJeebus wrote: post #12

Earlier quoted context omitted.

This is by design. Income tax filing is a long-solved problem in much of the first world. One of the easiest ways to convince the public that the government is inept and wasteful is to make it as difficult to do the necessary as possible. If politicians cared, this wouldn’t be an issue.

Basically nothing is going to happen to you if you make a best effort. So many people focus on getting it correct and pay hundreds or thousands to do so. I've filed my taxes incorrectly by accident for years and the IRS just sends me a correction and the new amount

I found myself in a weird corner of tax filing because I did equity crowdfunding (startup investing in amounts probably smaller than worth it.)

This results in a lot of K-1s, which tax preparers charge you like $500 a form for, except all of mine had values like $2.

Luckily you just kind of do it halfway right in TurboTax and it works out.

Re: Millions of Americans mess up their taxes, but a new law will help

#52

Post by astrange »

dataflow wrote: post #31
JSR_FDED wrote: post #4

Taxes in the US are unnecessarily stressful. I remember going to H&R Block and being sent home to find some piece of supporting documentation because it was “really important”. I turned the whole apartment upside down but wasn’t able to find it. Went back to the tax preparer in a state of high anxiety. When I asked what would happen if I couldn’t find the document and was told the impact on the final assessment could…

> the impact on the final assessment could be as high as $80 That's the financial impact. Depending on what you're missing, the nonfinancial might be opening yourself to perjury, because you're knowingly claiming a falsehood as a fact on a tax return (even if it's financially in the government's benefit)... never mind potentially screwing up future tax returns in the process.

Tax returns are best effort. It's much less of a crime to get one wrong than people think it is.

Re: Millions of Americans mess up their taxes, but a new law will help

#53

Post by astrange »

jofzar wrote: post #48
silisili wrote: post #45

Earlier quoted context omitted.

It's a bizarrely simpleminded and incorrect meme, then. The government doesn't know the exact answer - if they did we wouldn't have to file at all. Have a kid? Buy a house? Go to college? Make $60k selling illicit drugs on the black market? Get a $200 bank signup bonus? These all affect taxes. One could argue in a dystopian way that technically "the government" as a whole does know these things, but suffice to say, t…

> Have a kid? Buy a house? Go to college? Make $60k selling illicit drugs on the black market? Get a $200 bank signup bonus? Lmao in Australia, other then the drugs, yes the government knows because everything is reported to them. America is just behind.

If you're a business owner then they're not going to just know because it's up to you in several different ways how to report things.

If you're a child then they're not going to just know who you're a dependent of.

Re: Millions of Americans mess up their taxes, but a new law will help

#54

Post by Ekaros »

jofzar wrote: post #47
adabyron wrote: post #40

Earlier quoted context omitted.

The average American can file for free, or at least it was possible in the past. They could also learn to file their taxes, as well as simple tax planning, in a very short video.

I'm not joking, in Australia the tax "filing" takes like 2 mins, you literally go, next, next, look at the details, "yep looks correct" put in your claims, and then submit. You are all done. Unless you have something wack going on its not even a process. I have had signups which are more complicated then it. American taxes on the other hand mega suck, and have 9000 pitfalls.

Finland doesn't even ask you to approve. They send you a suggestion and if you do not amend it by deadline they take it as it is.

And amending is online form where everything is clearly explained, links to documentation. And longest time it takes is actually to look up numbers from your own records.

Re: Millions of Americans mess up their taxes, but a new law will help

#55

Post by Ekaros »

a_bonobo wrote: post #7
lbotos wrote: post #6

Earlier quoted context omitted.

In the states if you are a contractor there are tons of things that you can deduct from your taxable income. So “figuring out how much you should be taxed” is after those deductions. If uber paid you $15123 but you: Just bought a new bike bc your other was stolen You paid $1200 for insurance You bought a helmet and cold weather clothes etc etc. Those things reduce your taxable income.

Yes, same in Australia. Keep receipts and add the cost to the web form. They have simplified it nicely, though: if you work from home you can claim a per-hour deduction so you don't have to do the math of wear-and-tear, electricity, internet etc. I think it was $0.6 per hour?

Finland did that even simpler more than 50% of work days you get 750€. Ofc, hard part is to calculate 50% of your internet bill. And then any technology you buy for remote work. Not chair, desk or lamps though, those are in the room part...

Thankfully(\s), they are simplifying it even further next year and removing whole thing. Now you only get to deduct money if you actually rent an office...

Re: Millions of Americans mess up their taxes, but a new law will help

#56

Post by supercheetah »

loeg wrote: post #19
JSR_FDED wrote: post #4

Taxes in the US are unnecessarily stressful. I remember going to H&R Block and being sent home to find some piece of supporting documentation because it was “really important”. I turned the whole apartment upside down but wasn’t able to find it. Went back to the tax preparer in a state of high anxiety. When I asked what would happen if I couldn’t find the document and was told the impact on the final assessment could…

It's to H&R Block's benefit to make you feel that taxes are stressful and you need 3rd party help, though. That you were stressed out about this interaction is H&R's fault; not the law or the IRS.

> It's to H&R Block's benefit to make you feel that taxes are stressful and you need 3rd party help, though. That you were stressed out about this interaction is H&R's fault; not the law or the IRS.

H&R has lobbyists to ensure taxes are complicated and stressful.

Re: Millions of Americans mess up their taxes, but a new law will help

#57

Post by rsynnott »

Titan2189 wrote: post #11

> Those other countries have much simpler tax codes than we do All German readers spew out their drink in disbelief - Pardon what?

You just aren't appreciating just _how_ majestically bonkers the US tax system is. It is truly a work of art.

For a country which loves complaining about tax, and where half the political campaigning was traditionally about lowering tax, they sure love overcomplicating tax.

Re: Millions of Americans mess up their taxes, but a new law will help

#58

Post by [deleted] »

jofzar wrote: post #48
silisili wrote: post #45

Earlier quoted context omitted.

It's a bizarrely simpleminded and incorrect meme, then. The government doesn't know the exact answer - if they did we wouldn't have to file at all. Have a kid? Buy a house? Go to college? Make $60k selling illicit drugs on the black market? Get a $200 bank signup bonus? These all affect taxes. One could argue in a dystopian way that technically "the government" as a whole does know these things, but suffice to say, t…

> Have a kid? Buy a house? Go to college? Make $60k selling illicit drugs on the black market? Get a $200 bank signup bonus? Lmao in Australia, other then the drugs, yes the government knows because everything is reported to them. America is just behind.

[deleted]

Re: Millions of Americans mess up their taxes, but a new law will help

#59

Post by duxup »

syntaxing wrote: post #33

I like one of the memes online that describe filing tax as you’re taking a test that the government knows the answer to, and if answer the questions wrong, you go to jail.

That's not accurate, the government doesn't know how you're going to file, deductions, quite a few details.

Re: Millions of Americans mess up their taxes, but a new law will help

#60

Post by duxup »

Is this law... necessary?

Are people going to jail for a math error?

I've had the IRS reach out to me several times, each time it's a letter explaining their position and I responded and we went back and forth a few times and it was over.

No police showed up...

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