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Slashdot Asks: How Do You Pay Your Taxes?
April 15, 2014 isn't just a full moon: it's Tax Day in the U.S. That means most American adults have already submitted a tax return, or an extension request, to the IRS and -- except for a few lucky states -- to their state governments as well. I filed my (very simple) tax return online. After scanning the free options, since I live in a state -- Texas -- that does not collect personal income tax, I chose Tax Act's free services. That meant enduring a series of annoying upgrade plugs throughout the process, but I could live with that; I have no reason to think it was better or worse than TurboTax or any of the other e-Filing companies, but I liked Tax Act’s interface, and it seemed less skeevy in all those upgrade plugs than the others I glanced at. The actual process took an hour and 19 minutes once I sat down with the papers I needed. My financial life is pretty simple, though: I didn't buy or sell a house, didn't buy or sell stocks outside of a retirement account mutual fund, and didn't move from one state to another. How do you do your taxes? Do you have an argument for one or another of the online services, or any cautionary tales? Do you prefer to send in forms on paper? Do you hire an accountant? (And for readers outside the U.S., it's always interesting to hear how taxes work in other countries, too. Are there elements of the U.S. system you'd prefer, or that you're glad you don't need to deal with?)
actually, my taxes do me.
HRblock.com makes pretty quick work of taxes, and it works seamlessly in aurora in Gentoo linux. The only downside is the constant upsell. at some point you're clicking quickly because you just want to get shit done and accidentally upgrade yourself to a $120 tax package. After that, you literally cannot back out or restart.
Good people go to bed earlier.
...it should probably be "How Do You File Your Taxes?", as the content has nothing to do with how taxes are paid, really.
With tears in my eyes...
I send in my pound of flesh yesterday.
Some third party companies accept credit and debit card payments on behalf of the IRS for a fee. I think you can also just put your routing and checking number on your 1040 form and they will debit your payment directly via ACH.
As far as filing, my accountant prepares the 50 or so schedules and forms that I need to send in every year...
I tried to efile a few years ago and discovered someone had already submitted a tax return under my SSN. So I had to send in all my tax forms and all my proof of identity in paper, along with a statement of fraud or something of the sort. And I had to file paper again the next year since my SSN was blocked from efiling due to the fraud alert.
Finally got the ability to file normally again last year. We don't qualify for the free tax software any more, unfortunately. I think we used the paid version of Turbo Tax.
Occasionally living proof of the Ballmer peak.
I have used Tax Act since changing from Turbo Tax when they tried to push a DRM version on us. This was a long time ago. I probably would not have changed except for that, but since then I have not looked back. With Tax Act I always buy the Deluxe Download for both my State and Federal taxes and that gives me a free e-file and unlimited paper filings. Over the years it has served me and my late wife well through the passing of both her parents and preparing their final returns and also my Father's passing and the issues with inheritance and estates. My tax preparation over the years has ranged from very simple to far more complex than I would ever have imagined and I have had to contact the Tax Act support via email on both technical issues of HOW to do something also Tax issues of WHAT I needed to do. I have always gotten very helpful and prompt responses and this year was no exception. Although I am moving more and more to Linux I am GOING to keep at least one Windows machine around just to run Tax Act if nothing else!
Suck it tax man, Accept my bitcoins!
Do not look at laser with remaining good eye.
The majority of people in the UK who work for an employer (rather than self-employed), and don't have other income to declare (e.g. part time self-employed in their own hobby business, renting out a property, or rich enough to be generating significant income from investments or savings) don't fill in tax returns, it is managed by their employer through Pay-As-You-Earn. As wikipedia says "because the tax code reflects other income (including the state pension), the PAYE system typically results in the correct amount of tax being paid on all the income of a taxpayer, making a tax return redundant".
Let the flamewar begin :-)
I like the UK system - if you're an employee and you're happy with the tax your employer has withheld on your behalf, you don't have to do anything. You get a statement at the end of the year telling you how much you've been paid and how much tax has been withheld - if you think they've got it wrong, or you want to claim deductions, you file a tax return saying so.
Slashdot - News for Nerds, Stuff that Matters, in ISO-8859-1 Has just realised that beta makes this signature redundant
Not an ideal solution, but it has served me pretty well. My taxes have been varying levels of complexity over the years and I liked having the same UI for handling a variety of needs. Free would be nice of course, but I consider the cost of the package (compared to the amount of money involved) worth it for the convenience.
tears & innocence are our new clear genuine native currency? any shortages of those can be attributed to our process of devaluing ourselves
Grudgingly.
Filing taxes is annoying enough, and even the "premium" options are just not that expensive for anyone in our field with a job (if you're not in that category, its a different story, obviously), that it just doesn't matter.
I do have a condo I just bought, I'm married, and I do have stocks, but using the appropriate TurboTax option, I basically just punch in some information, and it retrieves my W-2s and tax papers. Punching in the real estate data takes 5 minutes. So all in all, about 45 minutes for both people and forget about it.
Only annoyance was that the e-filling for stocks wasn't available for like, a month after I tried to file, so I had to wait a bit to submit the whole thing, but considering the amount the IRS wants from me, I wasn't in any particular hurry.
With money
Coder's Stone: The programming language quick ref for iPad
I have a mildly complex tax situation with having some stocks and my wife having her own business so we had an accountant do ours this year. It cost me $120 for everything front to back... the last time I bought TurboTax it was like $100 anyways, PLUS $50 to file my state return, so for our situation the accountant was a no-brainer. I'd say most of the time its a different case person to person, and like most things, there is no blanket "best choice all around"
"From each according to his ability; to each according to his need."
Here in Switzerland, canton Vaud, Tax Day was March 15. It is quite easy : you download a Java app from the government Web site. It works on Windows, Mac or Linux. You can open last year's return to prefill the relevant information, then you are guided through the application as to which fields you need to fill. When done, the electronic form is sent back, encrypted, to the government. In many cases, you do not need to join any other justification document, but they may ask you for them later. Usually, you do not need to send your salary statement either because your employer is required to send it directly to the government so they already have it.
I have a big old spreadsheet I use every year. It isn't that hard. I did find
a much more complex spreadsheet out there but didn't use it this year.
Then the data goes in a fill-outable PDF so nobody's exposed to
my horrible handwriting.
I do it old school, pen on paper.
photosMy Photostream
If you just have one or two W2s and 1099 I find paper to be the easiest. I tried the eFile system and it requires you to type in all the codes on the W2s which is torture. 45 minutes and I'm done.
Are those handled automatically too? I'd kind of like that actually.
I mostly use H&R Block. Usually cost between $100-$200 but they do it quicker than I could and (I hope) are less likely to make mistakes.
This year, however, we went with Turbo Tax Online because that's what my wife wanted to do.
Coder's Stone: The programming language quick ref for iPad
Please choose an alternative to Intuit products. Our tax system should have been reformed to make filing easier long ago (e.g. the IRS already has most of the information you enter into your tax forms). Intuit is one of the few companies consistently lobbying against making individual tax filing easier:
Ars article on Intuit astroturfing campaign
Live in Texas, pretty simple tax return. I've always used TurboTax online and never had any complaints. I think I chose the $30 option.
U.S. and California
I have a degree in mathematics. Tax returns and their computations are merely a simple mathematical puzzle, which I easily solve.
I created two spreadsheets, one for federal income taxes and one for state income taxes. The latter is linked to the former because much of the California computations require inputs from the federal forms. Each year, I copy the prior year's spreadsheets into a new folder. I download the fill-in PDF forms for both governments and update the spreadsheets accordingly. I mark in yellow the spreadsheet cells that require new inputs; as I input those data, I remove the yellow.
California provides a Web site where I input my taxable income and filing status. The Web site tells me how much tax to pay. I wish the IRS would do the same. However, it is much easier to input into the IRS PDF files than into the California PDF files.
Since I have a large investment in a mutual fund, I can also get Turbotax for free. I download it and use it to check my spreadsheet results. I don't really like Turbotax because it requires too much irrelevant input and because it does not provide adequate capability to include explanatory attachments.
I print the PDFs and mail them via U.S. Postal Service. I never request certified or registered mail. I mailed my first tax returns when I was 16 years old. I am now 72. I have never had a mailed return go astray.
Slashdot Asks: How Do You Pay Your Taxes?
I PAY my taxes with Bitcoins OBVIOUSLY!
How do you do your taxes?
I use TurboTax every year and have never been disappointed. One year I decided to try HR Block since they are stalwarts in the tax filing industry (Why does tax filing need an industry?) and I was mortified at the lack of professionalism from their online and support staff. They cost me extra money and wouldn't assist me in correcting the error they caused. The tax "professional" assisting me couldn't even understand the simple concept of adult dependent attending college which I'm pretty sure is a common deduction. Their 2014 ad campaign (Get your billion back) infuriates me.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Grudgingly. I guess that's international.
bickerdyke
I downloaded the workbook at excel1040.com, as I have for several years. I used a free version of TurboTax to validate the results. Once I was satisfied that I had entered everything correctly, I printed the relevant forms and hand-transcribed them to the IRS official forms. I mailed the paper forms yesterday. I try to print neatly, so that the poor transcribers (practically minimum-wage) at IRS can read the forms. In order to buy a version of TurboTax that would handle my federal and state returns, they wanted $140. I can't stand the thought of paying for the 'privelege' of filing my tax returns.
If it isn't true, don't say it. If it isn't helpful, don't say it. If it's true and helpful, wait for the right time.
Of course the US tax code is like, what, the second most complicated in the world or something? (I think Germany has it worse?), which is a problem in itself.
That said, what you describe definately seems like it would work quite well for people who just work for an employer, as you mentioned.
But here at least, the amount of people who are either self employed, do free lance on the side, or have some kind of investments, is a pretty damn large portion (on top of my head I actually don't know a single person who does not fall in one of those categories...of course its because of where I live and is not representative), so, at the very least, it wouldn't help me much :)
I've e-filed for the past 10 years or so with all the major tax filing brands. Very easy and convenient; plus your returns are direct deposited so much faster. The only problem I've had was a couple years ago when I'd forgotten about several deductions and had to amend my return by mail (amounted to several hundred dollars as I recall).
My only complaint is that e-filing should be free software provided by the government and not commercial entities. Seems like that's the prerogative of the Feds, but those under a certain income bracket do get free filing and software.
I swear to God...I swear to God! That is NOT how you treat your human!
I needed an extension this year. Some tardy 1099s, an erroneous 1099-R, a K-1 (that MLP just wasn't worth the hassle), a bunch of self-employment income, and it all just snowballed. Last couple of years I've used an accountant, but done them myself as a check, and to make sure I understand what's going on. Our results have never differed by more than a couple hundred $.
In Canada our tax day is April 30th...it's actually been extended this year several days due to the Heartbleed vulnerability found on the CRA's (Canada Revenue Agency is equivalent to the IRS) electronic filing servers. Yes, about 900 SIN numbers (similar to your SSN) were compromised!
Personal income tax forms (T1) are submitted to the Federal Government which includes any provincial forms/schedules that may be needed. All employment income is reported on a T4 as submitted by employers to the CRA but more importantly to each employee used to calculate any over/underpayments. There a dozens of other T forms for different things like investment income, educations deductions, etc.
Personally I report employment income, investment capital gains on my non-registered retirement savings, and this year some capital gains on a stock I sold to pay for tuition. I also report and deduct any retirement savings from my taxable income (RRSP's and Pension like a 401k). Generally, I have about 6-10 different papers that I need to co-ordinate before I begin to calculate things.
I used to use Intuit's TurboTax software, then switched to the online version but always found the software/website to be somewhat hard to use and poorly laid out. This year I found out about a new alternative web tax software for Canadian Tax called SimpleTax.ca. It's designed much better, and is actually free to use, plus it's CRA Netfile certified meaning it's been checked and verified by the Government. They ask for an optional donation at the end, which I'm sure is just temporary until they build a client base.
Normally I get a refund of anywhere from a few hundred dollars to a few thousand depending on a number of factors such as EI, CPP and Income Tax overpayments PLUS the benefits of deducting registered retirement saving (this makes a huge difference).
Mark
I used H&R Block online. Unlike Intuit's offering, it doesn't complain that I'm using Linux. (Turbo Tax seems to work anyway after ignoring the warning, though.)
My financial life is pretty simple, though: I didn't buy or sell a house, didn't buy or sell stocks outside of a retirement account mutual fund, and didn't move from one state to another.
Trading stocks and funds in a non-retirement account used to be a huge PITA at tax time. Good news on this year's 1040 is that you can consolidate all your capital gains (or losses) by short and long term and avoid entering a line for every single trade. This quite literally saved hours of work.
I am not a crackpot.
It's pretty similar in Sweden, if your only income is "visible" to the government. "Visible" in this sense means that others than you are required by law to report the income to the tax office: your employer will report your yearly wages, your bank will report your yearly interest. Any other income you must report yourself, but very few Swedes have any other than wages and bank interest.
This means that most Swedes get away with just signing the form the tax office has sent them, with all the numbers filled in already. Only if any of these numbers is wrong do you need to write anything yourself. And if you don't like to waste good ink on paper, you can just send them an SMS or do it online.
Anybody that has sold stock must report this themselves. The tax office will be told by your broker that you have sold stock, and in which companies, but you have to tell them how much profit you made. This can be done online or on paper, as you choose.
For most people doing their Swedish taxes online, the system is set up in such a way that you cannot submit an incomplete tax form: if you have sold stock, or made money as a self-employed contractor, you must fill out the forms for each.
Some countries don't even have personal income tax, and apart from the U.S. I don't know of any others that require their citizens pay income taxes on wages earned overseas. Admittedly several of the countries on the list are not the best places to live, but for non-USians it's perfectly possible to avoid paying income tax altogether.
UNIX? They're not even circumcised! Savages!
In Sweden, the authorities already know everything since your employer is required to send them your salary statement at the end of the year (there have been proposals to force employers to send this every month). All financial institutions do the same. Both pay your owed taxes automatically, so you never get tempted to spend the government's money.
So all salary, stock funds, interest, and other capital gains are pre-filled. Also many tax-deductible items come pre-filled (when you employ someone to do repairs on your house, the cost of work is deductible, and the invoice will come with the amount already deducted).
If you have no additions (most people do not), you can send an SMS or login to skatteverket.se and accept it.
Common actions like selling a house or stock require filling in a form, but this can also be done online. You are notified on the total taxes due or the date and amount that your tax returns will arrive (unless you are flagged for manual review).
The process takes me around 5 minutes a year. 30 minutes the year I sold a house and had to search my records for the figures.
That isn't much different than in the US, however you are still required to file a return in the US regardless if you owe anything, owe nothing or are getting a refund.
Work place withholding typically doesn't take all deductions or tax credits in to account, nor does it consider taxable interest and investment income. I work in a small office of 10 people, I'm the only one in the office that actually has to pay at tax time. Everyone else gets a refund of some sort.
Last year I owed $200, this year it was under $20, most of the extra that I owe came from investment accounts, work place deductions would have provided me a small refund.
what is this income tax everyone is talking about? I'm unemployed. lol I pay the sales tax that Amazon.com and the brick and mortar store charges.
The root cause of of the complexity of the US tax code is social engineering, but a significant proximate cause is from three UI problems that would be relatively trivial to address.
The first UI problem is that most IRS forms are two pages long, ostensibly to make them look simpler than they really are. The problem with a semi-official 2-page limit is that it requires you to switch forms every few lines. "Deduction for XYZ" - means "drop what you're doing, GOSUB FORM 1234", and on Form 1234 there's a phase-out or some other calculation, which in turn relies on a worksheet that's not actually part of any tax form, etc... (Canonical example: "(see instructions") - for Line 45 - the Alternative Income Tax, which requires you do redo your entire tax return using a completely different set of rules. But hey, it's only one line on Form 1040, so it looks easy to figure, and it only refers to one other two-page form, namely Form 6251. Four pages, right? WRONG!)
The second UI problem is that because most Americans are innumerate, most of the lines on the 2-page forms are wasted space. Instead of saying "Deduction for XYZ: Enter ((Line45) * 10%)) up to a maximum of $5000)" it reads: Line46: Enter 5000. Line47: Multiply line46 by 10%. Line48: Subtract Line47 from Line46. If the result is negative, enter zero.
By the time you've done three steps of arithmetic, you've forgotten what any of the numbers on any of the lines mean, and that brings the third problem.
The third problem is that although referring to lines on a tax form is unambiguous, it's meaningless. This year, Line 37 of Form 1040 is your adjusted gross income (AGI) - but most forms that refer to it don't say "Enter your AGI from Line 37 of Form 1040", they say "Enter Line 37 of Form 1040." The forms could be more self-documenting in this respect; by the time you're three GOSUBs deep in the stack of forms and dozens of meaningless arithmetic steps to calculate intermediate numbers, you've forgotten the quantity you're supposed to be calculating in the first place.
The only way to simplify the tax code would be to require every sitting member of the House and Senate to do their own taxes using nothing but a pencil, paper, and a four-function calculator, and to not let the bastards leave the chamber floor until they're done. If they starve to death before they simplify the code, re-elect new victims in their place and keep them locked in until they come up with a tax code that can actually be complied with. Fuck the IRS, and fuck Congress, and fuck Intuit and the multibillion dollar tax preparation software industry for lobbying to keep it the way it is.
In the UK, taxes are taken directly from your salary. So if your income isn't complicated, there are no forms to fill in. Much better than the US.
I started with MacInTax the first year it came out, and I've used tax software on a computer ever since. I used MacInTax and TurboTax until Intuit added DRM a few years back and mishandled things. I switched to H&R Block that year. However, if H&R Block ever does something idiotic, I will switch to whichever competing product does a good job. I have not tried any online tax software, but I have friends and family who do and they like it. In general, it takes me about an hour each year to do my taxes. I do have a mortgage and taxable investments (stocks, bonds, and mutual funds) and sometimes other income, but I live in a state without income tax, so that makes things go pretty quickly.
I think I chose 'Tax Act' based on price to e-file federal and state; but I was very displeased. Not so much by 'Tax Act', or even by the taxation(I, um, did my best to refrain from calculating how many years I'd need to buy Uncle Sam another slipped F-35 deadline, or a Literal Coffin Ship); but by the fact that I was, largely because of lobbying by Intuit and friends, paying to re-type numbers from a variety of forms the IRS already has. Seriously?
Yeah, sure, if you have some sort of complex arrangement get thee to a tax accountant, maybe even a suitable lawyer; but this was just redundancy for its own sake: I took a W-2 and a bunch of 1099s and a few other bits and pieces, all provided by various institutions to both me and the feds, and then retyped them into another form so that they could be submitted to the feds. WTF? That wouldn't even make sense for free, much less paying.
C'mon, IRS, just let me see what you think my return should be(you have to calculate it anyway when deciding who to audit) and I'll tell you if I have any changes or disputes. We'll both save time and trouble. How about it?
I use an accountant. Thankfully, I was ahead of the game this year and got everything filed a month ago.
But the worst part is getting the letter from the IRS saying that they'd adjusted my refund by $30 due to some minor error.
My feelings on the matter:
"If you knew how much money I was supposed to send in, WHY DIDN'T YOU TELL ME IN THE &@#$ING FIRST PLACE! It could have saved everyone time, money and trouble."
Lets start refering to The War Against Terror by it's initials. . .
I do my taxes and file via TurboTax. Their fee to do state taxes is outrageous, but I'm pretty lazy, and it saved me the hassle of filling out the form, buying stamps and snail-mailing my form and check.
That is how I pay my taxes. But I do pay them. That is how I pay my taxes. I do not see taxation as theft, as many conservatives, libertarians claim. I see government as a long term venture capitalist, who invests in the entire next generation of America. Some of them will strike it big, and others will strike out. If I am one of the fortunate group that was able to take full advantage of the investment the government made in me, investments that protected my earning potential and my property rights, then the tax I pay is just dividend to the venture capitalist. So despite all the reluctance and the pain associated with parting with my money, I know it is the right thing to do. The government investment in the next generation depends on it. I can invest better on my children, and the government investment is creating competitors to my children. If I believed in Social Darwinism, I will fight taxes tooth and nail. But I believe human beings should rise above this level of self interest and pay the taxes. --
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
The average person shouldn't need to buy some complicated piece of software or hire a witchdoctor to determine their financial obligations to the state. The system is a pitiful mess, and vested interests are working hard to keep it that way. When you appoint me emperor, you can bet I'll fix that up right good.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Most years, I just use the basic tax software. A few years when my taxes got complicated, I paid an accountant. For me, the few hundred dollars I paid was worth it for me not to be bothered by the IRS. Statistically they look about professionally prepared taxes less than self-prepared ones. Also the accountants always know about things that I can claim that I didn't know about. Each time, they were able to get me a refund.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Here in Finland, the tax department sends me a tax card which tells how much to withhold each month based on my estimated yearly earnings, which I give to my employer. I later get a prefilled tax return based on my real earnings, which details any extra to be paid or returned. I check it, and if it's okay, I need do nothing.
A more cynical person might think a system where the market for tax apps or accountants for the average person exists is intentionally designed to make paying taxes difficult and aggravating.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
North of the border, in Canada, I have been using uFile for about ten years now. They are very reasonably priced and have a web interface which allows me to file taxes using any operating system which can run Firefox.
But at least with the UK system, the bulk of your tax is already covered. I used to submit a self-assessment return online here as I bought/sold shares and had a second job writing magazine articles. I just had o add the details plus expenses I was claiming to offset these, online and the system works out what you have to pay (and takes into account your existing tax from your primary job). You then have a choice to pay it in a lump sum or change your tax code so you pay it off each month (there must be limits to this, not sure, never used this option). The online system is great, loads of information, a clear step by step process and it does all the calculations for you. You can do it bit by bit and it remembers all your details to date. When you finally submit it you get a downloadable PDF that looks just like the paper version but nicely filled in.
I want a list of atrocities done in your name - Recoil
I just have a local accounting place do my taxes. Part of my tax returns requires that I mail in proof of something for my state taxes. If I use the local place, they have some way of doing electronically that is not available to use plebs. Instead of a 1 month turn around, I get a 1-2 week turn around. I typically get my money back mid to late Feb.
"All animals are equal, but some animals are more equal than others."
#DeleteChrome
In the press a lot has been made of the Romney's and Obama's "effective" tax rate: that is, "Adjusted Gross Income/Total Tax = Effective tax rate". Romney's was something like 14.1% and Obama's was 20.4%. Populist rage ensued over both "not paying their fair share." I felt that same rage but then looked: my effective rate was 9.53%!!!! That sure surprised me.
So /.ers: look at your effective tax rate - are you higher or lower than these "greedy bastards"?
Annoyingly, I found out a couple of years ago that despite being a Canadian citizen and filing Canadian taxes every year, the US still considers me a US citizen for tax purposes, and so I have to file US taxes as well. Particularly annoyingly, one of the Canadian tax-deferral vehicles, the TFSA, is not recognized by the US, so I have this big complicated additional form to fill out for something it calls a trust. Plus I am CEO of a company I partly own (my consulting business), so I have to file financial paperwork for that as well. I hire an accountant, it's the only way to make sense of it all, and the US idiocy means that I'm out of pocket an additional $400 every year.
I download the pdfs, fill them in, print and mail. Takes me an hour or two, what with the alphabet-soup of federal schedules. State's much easier. Local's dead simple.
I used to use purchased software, but they all switched from simiple spreadsheet-like apps to fancy Q-and-A bs, which takes much longer.
I don't submit electonically, because as far as I can tell, you can't submit directly to IRS or state, you have to use some third-party intermediary, and I don't want any third party having that information. I don't trust them to not misuse it.
In the Netherlands the gouverment knows almost everything about your financial life. If you don't have to much money, only 1 house and work for someone you have it easy. The gouverment will fill out the tax form (digital form) for you and send it to you though a secured channel. The only thing you need to do is check if it is filled out correctly. The tax form took me 15 minutes to check and send back.
their slogan: it is not getting any more fun, but it is getting easier.
Ok, so what the hell!
A simle tax return hear in Australia done online with the free govermnt sofware ( http://www.ato.gov.au/Individu... ) takes a lot less then that, hell it even data matches your taxfile number and pre fills feilds for you to check, hell it picks up tax decatiable medical expsense that i didnt even relise I coudl of claimed! Add in your work mileage and year type of car, how many uniforms washes you do a year etc.. and your filled and done extremely quickly, and you get faster processing due to online submission.
Done in 1/2 hour, and it tells you how much you are getting back or own then and their as a damm close estimate. You guys have to pay cash for programs for your tax? Sounds like your government really is screwing you, Can you even claim that back on your tax, tax based expenses??
You have 5 Moderator Points!
Which Helpless Linux zealot/MS basher do you want to mod down today?
When I was younger and unmarried, I always did my taxes myself. For the first few years of married life, I did them as well. Even after buying the house and having the first kid I still did them -- me, TurboTax and a lot of frustration. Then came The Year Of The Thick IRS Envelope. Usually when you get a job offer or accepted to college, the thick envelope means "winning". Not so when you get a thick envelope from the IRS. That generally means Something Is Wrong. What came to pass was that my wife's employer at the time had reported a stock option sale incorrectly, and the manner in which it was reported made it look like we owed $12K more. It was sorted out correctly, but I'd officially had enough of the nonsense. I'm generally a DIY type in all other aspects of my life, from the server room to home renovations and fixing my own car -- but this one I gladly farm out. I throw a few hundred bucks at the problem and I don't have to deal with any of it. Our return is also more complex since my wife runs her own business, too -- so I'm just happy to have it taken care of so I can work on other projects and spend time with my kids.
I would really like the US to have a better tax code, but honestly I'm going to be in the grave before that happens.
Not having a "real" platform, I used the web version of TaxACT. It was half the price of TaxCut to TurboTax. Being a web app, it was alright but the interface was buggy, and the questions were awfully worded.
I've been running Mint 115/16 for about 6 months, and other than tax filing it has been fantastic.
Reminder: before switching someone to Linux ask about how they do their taxes first.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
Here in Norway, the company you work for pays your taxes for you based on a personal tax card. The personal tax-card is distributed electronically from the government to every citizen based on last years income.
When we get our tax return forms, all debts, interests, banksavings, stocks and property is already filled out. Most people only have to make small changes.
Everything you need to change in the forms, are available online.
If you own taxes or you've paid too much through the year, the final balace must be cleared by june.
Seems like the system you guys got over the pond is vastly overcomplicated.
Right, so it only really save the step of retreiving your W-2 in the US (where you just type your personal info, it pulls data from your job and does all the math for you....then you add investment info and whatsnot).
So it saves you one step, and the easiest one. No arguing that its better...but it doesn't add much (the main issue in the US is the tax code is too complex and downright retarded...the tools to handle it actually work fine)
The 1065 and K-1's are filed on paper since I can't be arsed to buy the TurboTax version that has that stuff in it. I do use Turbo basic to e-file our personal fed return. I do the state return on paper, again because TT wants too much for the PA state forms.
I've done the free web-based returns (both TT and Taxact) in the past for doing the kids' returns when they were in college. They are fine for trivial returns but get annoying quickly for more complicated stuff. I recall Taxact in particular making me re-answer questions repeatedly because I needed to go back and edit something.
I've never felt the need for an accountant. The stuff can be a little tricky but for most people it's not that bad. If you have limited oil drilling depletion allowances and suchlike stuff, that might be different... :)
I have use TaxAct for several years, for reasons similar to the OP. I'm also not a big fan of Intuit's business practices, so I avoid them where possible. On filing, I generally get a (small) refund so I file electronically to get my money ASAP. However, when I do something big like selling a bunch of stock, I'll file with paper and as late as possible. Gives me more time with my money, and rumor has it you're less likely to get audited with a paper return. Don't know if it's true, but doesn't hurt and even a little less probable is a good thing.
My wife got me into using TurboTax the past few years (before we married I usually did them by hand).
For simple situations it is ok, but for the case of moving TurboTax couldn't handle it. For example, moving into VA but having VA source income prior to the move confuses it. VA says you need to file as non-resident AND as a part-year resident, on two separate forms. (MA, where I moved from, is similar but has the good sense that you can handle it with one form)
TurboTax said I was a part-year VA resident, and wouldnt let me prepare the non-resident part. So in the end I had to do everything manually for VA.
Searching the forums I saw someone else having the same problem, and the Intuit response was "I've never seen that particular situation." Really???
I'm an American expat. The USA requires me to file a tax return annually, even though I live, work and pay taxes in a foreign country. Because of my expat status, I have to do a paper return, at least as far as I know. I get to do the whole paperwork drill twice, once for my adopted northern-Europen country, with a 50% tax rate. And then again for the IRS, where I list everything out, deduct local taxes (50%), convert it all to US dollars (no official exchange rate given), then at to the bottom of the form cross off that nothing is owed and sign it and mail it. I should probably hire a professional tax accountant to do the IRS return, but cannot afford to do so. It costs around 600€ for a simple run-of-the mill return. It's getting more and more complicated each year.
Honestly, I am considering not filing with the IRS any more, because there's no positive benefit. If I do everything right, I don't get into trouble. If I do it wrong, I get into trouble and might have to pay. If I don't do it at all, no one notices. At least as long as I don't go back to working in the U.S. But that's not really much of an incentive, considering that my home, my job and my family are all here. The IRS should at least offer a raffle to win a prize, like an expenses paid trip for my family to Disneyland or something like that. I guess I would be a candidate for changing my citizenship, as I speak the language perfectly and am very well integrated in the local culture. I was born an American, served in the Marines twice in Iraq, etc., and I don't want to give that up, even if I'l probably never live in the U.S. again. I still enjoy flying the American flag on the 4th of July and grilling hamburgers for my friends. I'm not bitter at the IRS or the U.S. government. I just wish they would make it easier for a working stiff such as myself to stay compliant and "do his duty."
Same in the Netherlands, with the addition that the tax office will receive from your banks and employer complete financial data on your wages, taxes withheld, bank balances, mortgage payments, assets, and debts. These days they send you a tax return with all the relevant data already filled in; all you have to do is add any additional income they don't know about (not applicable to most people), or any additional expenses that are tax deductible (medical bills & such). For most people that means a quick check and signature before returning it digitally.
Many people with their own company, freelancers, and people with a lot of liquid assets will hire an accountant. We have such a byzantine set of rules on deductions, financial aids and exemptions that it pays to know the rules and be creative, and a good accountant can find the loopholes for you. With a top income tax of 52% (which already kicks in at 55k euro or so), 21% VAT and ever rising council taxes, I feel no qualms for dodging the system where I can.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Don't forget the 20% Pay-As-You-Spend as well (aka VAT), and the £2-per week tax on stupidity, aka the Lottery.
it's good enough for my relatively uncomplicated situation and the ability to import my last year's information helps a bunch. Also, since I've been looking at buying a house, the ability to print out my last few years W2s from the site was great vs. digging out my print copies and then then schlepping them to work to scan and email to my mortgage broker.
If you were me, you'd be good lookin'. - six string samurai
Just filed by TurboTax this year. Basically, this year has been STUPIDLY busy, and I've been working 7 days a week, and pulling an average of 12 hours a day.
So last night it kinda occurred to me, uh, maybe I should file my taxes?
Unfortunately I'm booked solid today. Ooops.
Now I've had my taxes done for me for the last 25 years (basically ever since I started working as a teenager). In all that time, I've only had one tax scare (due to my employer at the time screwing up my witholdings). So, regardless of how "easy" people say it is to file for yourself, I was always terrified of filing myself.
This time I didn't get a choice.
Luckily it was mostly pain-free. One small goof around educational witholdings (interest on college loans). But I got it filed.
And it's become cheaper, by far, to file this way than to have a service do it.
Now I just have to hope nothing got screwed up.
(I'll unclench my butt from my chair once the direct deposits go through.)
Chas - The one, the only.
THANK GOD!!!
I've used a donation-based Excel template for the last few years. The free on-line packages strike me as too much of a security risk, as are the packages that install on your computer (N.B.the uninstallable spyware loaded by TurboTax a few years ago....) For me the Excel template downloadable from http://www.excel1040.com/ is golden - no endless "interviews" about situations that don't apply to you, just fill in the forms or worksheets that apply to you and presto, you have printable IRS forms ready to mail. Hell I was so impressed I even sent in a modest donation. Sorry it is too late for this year, but note and remember this for next year.
I used to think Turbotax was a device for chopping flat fish.
Regardless, I use Turbotax through inertia and laziness. My taxes are a little complex - wife has a business, home office and all that malarky. I have stocks and options and RSUs and the broker never reports it correctly.
The inertia and laziness bit comes in where TT remembers the numbers from last year and displays them next to this year's. This is a good thing because it shows you the ballpark number you're looking for. If your home office utility costs are half of last year's, you've missed something.
The business (retail store, we live above it) tax logic is complex and TT has no clue how to handle that. You cannot throw a year of transactions are TT and have it work it out. It cannot distinguish a sale-of-goods from a class-registration-fee from an asset. Intuit would have you enter it all into Quickbooks manually (the import/export does not work, deliberately so), but QB sucks donkey balls. So the business tax logic is untangled in spreadsheets I developed.
When I get that automated and integrated into the point-of-sale software (that I wrote in python+curses for retro/modern geek points) my life will get simpler. But this requires the bank to use a consistent format so transactions can be tallied.
I should use this sig to advertise my book ISBN-13 : 978-1501515132.
When I filed my taxes this year, they gave me a free t-shirt when I was done. I feel like I haven't made the best decision.
Is 1563649 a prime number?
Back when I did my own taxes I used taxslayer.com very happily for many years.
Since I now have an LLC with an S-corp things are more complicated so I hired an accountant to make sure I don't miss anything. Let's face it, who wants to become an expert in tax code besides their day job?
Even though I'm a Systems Admin at a large company, I do my taxes like I do my D&D: on pen and paper. My taxes are very simple (one income, house, no stocks or other investments), and although I do use the long form for mortgage and charitable deductions it still takes me only about an hour and a half or so. I sort of enjoy doing them by hand for some reason, I guess it makes me feel I'm in total control and not at the mercy of some possibly buggy code that I can't see.
If my situation ever gets more complicated I'll probably switch to an accountant, but I don't see the point in paying $100-$150 for someone to tell me the exact same thing I can figure out for myself (and losing what little return I get in the process)..
Just to push another free online alternative, i've been using FreeTaxUSA.com for several years. They'll file your federal taxes for free, but charge a fairly small fee to file your state as well. (I believe it was about $10 the last time i paid, but may have gone up since then.)
I used to pay that small fee, but then last year(?) CA started their free efile thing, so now i do my CA taxes for free via the CA website, and my Fed taxes for free via the FreeTaxUSA site. If more and more states start pushing the free efile thing then i expect FreeTaxUSA will have to rejigger their business model, but in the meantime it's a good thing for me.
Of course i have very simple taxes, so i can't say how either system would work for people who actually have credits and loopholes they want to use. Based on the comments i posted at the time it took me 12 minutes to do the state and 27 minutes to do the Fed. (Though it might have taken me a little longer if FreeTaxUSA hadn't saved some of my settings from last year.)
This Space Intentionally Left Blank
I've been using the H&R block off-line software for the past few years, OS X version. The main reason is because they are NOT the #1 in that market, so they won't get cocky like Turbo Tax. And I'm in Texas, so the basic basic version. You also get 5 e-files included for the price, so I got my mom to use it a couple of times.
I get it for $15 at Fry's in January because even though they mail me a new disc every year, the amount they want to activate that online costs more than buying it at Fry's (like ten bucks or so more). At least they sent a cardboard sleeve mailer this time instead of a full snap case, to save postage on something I won't be using anyhow.
#naabhaprzrag, #sverubfr-000, #agi-fcbafberq, negvpyr[pynff*=' negvpyr-ary-'] { qvfcynl: abar !vzcbegnag; }
People should have to see their tax burden all in one sheet. Really, we should all have to write a check or use cash to pay our taxes.
It should hurt. The more it hurts, the more likely people will vote for politicians who can control spending.
Most people have no idea how much they pay in taxes.
:wq
5 minutes with turbo tax, got $8k back. No need to pay for taxes when anyone can easily get a return.
Through the nose.
ayottesoftware.com
Am I trusting my tax data to online services? Fat chance. Too many people have my data already.
More precisely, my wife runs TurboTax, I run errands and fetch papers and caffeine.
Back in the 80s, we went to H&R Block because of the complexity of moving expenses from my first post-college job, and my wife said "that looks easy", took the H&R Block tax prep course and did a year of working there, then a couple years at another tax/accounting company, then started her own tax business, using TurboTax and a laptop. It was a bit difficult to keep everything working, because TurboTax assumed you had a desktop PC with a real disk drive instead of floppies, but after a couple years of using RAMdoubler and disk compression, she was able to upgrade to a laptop that resembled what TurboTax needed. Eventually she went back to doing computer businesses and was able to get rid of most of her tax clients (and eventually all of them), but she's been doing the taxes in the years since then.
I think we're finally using the personal version of TurboTax by now; we used the tax-preparer version for many years because there were things the personal one just couldn't do or didn't do well (including importing previous years' data from the tax-preparer version, which kept us on that for a couple years after we would have switched.)
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
I use the IRS's free online tax filling service:
https://www.freefilefillablefo...
It's free, does the math, and links to instructions in case you have a question. There's even a troubleshooter that will check for errors. You can print to pdf when you are done.
I have a very complex tax situation (stock grants, home office, etc) and it can handle anything. You can create a log in, save the form, and come back to it many times to keep working on it. The only draw back is it will only do individuals, not corporations or LLCs.
It's easier to do it on paper, using the PDF forms.
Last year was the first and hopefully the last year I did taxes electronically. To prepare, I filled out the government's PDF forms. Then I had to research the online filing options, picked one, set up an account and filled in all the info I'd already entered into the PDF forms, had it fail on me, picked another, gave personal info to yet another online account, had to enter all the tax data again, and then had it tell me it'd take two days to confirm acceptance, which if it had failed, would have made me late.
This year I just printed the damned PDFs I'd already filled out and snail mailed them on the way to work.
Just because it's "on the computer" doesn't make it any easier.
"Most people have no idea how much they pay in taxes." proof?
Even though I don't write a check, my tax software it kind enough to provide me exactly how much I paid in taxes, so that I can easily calculate my EffeciveTaxRate (19%)
Grudgingly, reluctantly, and under duress. I feel as though I am the star of a BDSM torture and snuff film every time my federal and state taxes do me.
Home of The Suki Series
(UK resident) I am happy for it to work automatically. Just like I am happy that if I need to see a doctor or go to A&E it is paid for automatically.
Here you don't pay any income tax on the first ~£10k/a that you earn. To be paying enough tax to be worth complaining about you must be taking home enough money that I have little sympathy for you.
But maybe some people like spending their life being annoyed about numbers.
I live in Thailand. Thailand does not tax indivituals; they tax 7/11 and 7/11 raises their prices to collect it from me. Easy and painless, no paperwork, a better system
The first few years I lived here I filled out a US income tax return. Every year I got an overseas deduction. So one year I attached a letter saying that they can just photocopy that return every year, and if I ever think I owe them money I'll contact them. That was 15 or 20 years ago. I don't talk to them and they haven't found me, even though I still carry a US passport.
People used to say that the only sure things in this world were death and taxes. I haven't paid taxes in over 20 years, so now I'm not so sure about death either.
.. when they come and pry them from my cold, dead bank account.
After years of using either TaxACT or TurboTax, I hired a CPA last year to complete my 2012 federal and state income tax returns, and I used him again this year. It's not cheap, just north of five bills. I might shop around next year to try to get that down around $300.
I have multiple K1s, one from a foreign investment, which was downright nasty, and TurboTax wasn't up to the task. Plus, a lot of other unusual stuff that TurboTax didn't address directly.
What software do you use that adds up all your sales tax, property tax, fuel tax, and all the other taxes plus the fees that are passed on to you that are hidden in the costs of the goods and services you consume?
Yup, that's what I've used for the past three or four years. I just print directly from the spreadsheet, and it always works fine. I usually have to file a few extra forms, and I can download the PDFs from the IRS site. The PDFs are nice in that they let you fill in the data and then print them.
I considered buying software this year because it was getting complicated with figuring out accounting for rental property, but I had fun figuring it out myself.
I've set up a separate spreadsheet where I track all my expenses. One is for charitable giving, with a pivot table that gives a total by year. I have one for miles driven for charity, and the pivot table then gets added as an entry on the giving sheet, so I just have one number to copy to Schedule A.
I did the same for all my rental property expenses, adding a column for which line on Schedule E the expense goes on. The pivot table gives me the exact numbers to copy to the schedule.
Now for future years, it's all easy as long as I keep filling in the data every time we save a receipt. (I've considered scanning all the receipts and adding the images to cells in the spreadsheet, but that's too much work.)
Why in the world they don't let you submit PDFs online to them instead of mailing them on paper (only to be scanned back to electronic form), I have no idea other than lobbying from the tax preparation industry.
I finished mine last week, it took me over 2 months with probably 40+ active hours. My return was relatively complicated though, I own a sole-prop business, so had to close out the books on that, review all my transactions to make sure they were categorized correctly for tax purposes. Had to pull together and wait on 1099s, wait for my investment accounts to mail me their 1099-INT and DIVs. I had to issue a 1099 for a contractor I paid over $600, so figuring out that was a hassle.
Had to document all my expenses, pull together deductible stuff like ad valorem tax on my car, charitable donations, etc - then figure out the business-deductable portion of my rent and auto expenses. Had a lot of healthcare expenses and opened a HSA, so had to figure out how all that impacted my shit and how much I could deduct.
I got married last year, so then had to do all this for her, which roughly doubled the time spent. She owns a condo, which I'm now using part of as a home office, so had to figure out how that worked on my business expenses - you have to document mortgage interest payments, private mortgage insurance payments, HOA fees, blah blah blah. She was also a full time student for part of the year, and then started a new job - so figuring out education expenses and loan repayments was an annoying task as well.
Finally at the end of it all, we had to weigh the cost/benefit of making 401k/IRA contributions at the last minute, get our optimal contributions in, wire that money, make sure it was categorized as a 2013 contribution, which we're still trying to make sure is all in order.
goddamn I wish the tax code was simpler. =( In the end though, got a huge refund of a lot of estimated taxes I'd paid in. used turbotax/quicken/quickbooks to do it all.
I'm in the States and I don't pay taxes because I'm in the 0.5%.
Taxes are for little people.
My taxes are very simple, so simple in fact, I was able to use TELEFILE (enter your taxes via telephone, it was amazing). For some unknown and probably stupid reason, the Canadian Revenue Agency decided to cancel this method, so I had to scramble to find a free alternative. Since I work on Linux, none of the software out there could help me out. Then I saw on the CRA website a list of certified NETFILE providers (enter your taxes online), and that's where I found simpletax.ca. A few questions, a few clicks, and done! Free to use regardless of income. They ask for donation at the end of the filing only if you have a return, so I ended up giving them $10 or so, since I really liked the simplicity. This year, they sent me ONE email, reminding me to do my taxes, with most of the relevant information pre-filled. Amazing!
"The hallmark of humanity is the ability to move beyond sensory inputs" - Mary Helen Immordino-Yang
For my state taxes in Massachusetts, it's trivial to do web file through the state's web site. Once my federal taxes are done, it takes just a few minutes to enter all the numbers and I'm all set. At least my state allows me to file electronically for free.
I fill out the PDF forms and mail them in. The IRS got their act together a couple years ago and finally enabled saving the PDF filled out forms so you don't have to do it in one shot before printing. I get a nice hardcopy documenting what is or isn't owed. It's nice when the tax man fucks something up and you have hard paper to prove that you're right rather than an ephemeral computer record that they can lie about.
I am becoming gerund, destroyer of verbs.
Since dollars are speech, taxes are censorship!
The supreme court should get right on fixing that. AH HA HAHAHAHAHA! HAW HAW!
Dammit %19...is that including state? Mine is %35.
Once upon a time in the 1990s the US wanted its citizens to file taxes for free. The IRS was preparing a system for web-based filing.
That's when a company called Intuit got involved. They lobbied and lobbied, and soon the free IRS system was in the garbage. In exchange, Intuit had to provide a free option for lower/middle class citizens. Of course, they didn't have to actually tell anyone about it. Over the next decade, they lobbied and lobbied to protect their business interest and got that income level for the free software lowered...
The program still exists, but Intuit has been lobbying to keep tax filing hard, certainly harder than necessary. Why have government actually perform its essential service for free when the private market can double the effort at greater expensive for the profit of a few? And stress people out all at the same time?
Fuck you, Intuit.
..apart from the U.S. I don't know of any others that require their citizens pay income taxes on wages earned overseas.
Eritrea is the only other country that taxes non-resident citizens. At least they just tax offshore earnings at a flat rate though.
Really, we should all have to write a check or use cash to pay our taxes.
It should hurt. The more it hurts, the more likely people will vote for politicians who can control spending.
Most people have no idea how much they pay in taxes.
The flip side of that is that you should also be blatantly thrashed aside the head with everything your tax dollars go to support. Most people have no idea how much tax-supported government programs do for them in a myriad of small and easily overlooked ways. People should be aware of how much it would hurt to lose tax-supported infrastructure. The more aware of how much it would hurt, the less likely people would be to vote for politicians which are simply "Taxes Bad! Taxes Bad!" broken records.
Nowadays taxes are handled like in most other European contries (on-line, phone or SMS) but there is an age old tradition that some still follow. You wait until the last possible moment to hand in your paper form (everyone still gets them). I mean like five minutes before the deadline. I remember driving by the tax office and there were people standing in the street collecting tax forms from rolled down windows. Drive by tax returns!
I figured filing online made sense. But I didn't find a clear option. There were choices that require I make less than a certain amount of money to use. There were choices that direct me to 3rd party sites. Is the IRS really so inept that it can't show me a way to file online that isn't more complicated than printing my own 1040s?
It's odd that irs.gov is generally well-organized, such that I can find any PDF form I might need without trouble. Why can't it be equally obvious how to submit?
I've used Turbotax the last few years. It works fairly well, although their walkthrough for each section is a bit cumbersome if you only want to change one thing.
A couple complaints though, Turbotax price for the version that files a Schedule C went up a lot. Luckily I can share the cost with another person, Turbotax lets you file 6 returns. With Turbotax you get free federal e-file, but not state e-file, they want $25 for that. I used to just fill out my simple state tax tax forms online on the state site, but for some reason the state no longer offers the simple online form hosted on their own servers. So I just print my state return and mail it with a check.
Maybe I'm a rare bird, but I don't mind paying my _fair share_ of taxes. It is the price for civilization. In fact, I wouldn't mind paying more if some things would happen:
1: If I get sick/injured, everything I own wiped out. Would be nice to have a single-payer UHC system in place.
2: A well-trained police force similar to Germany's, with good funding. It would be nice to see arrests done by the "come with us" method, rather than the cuff/stuff/frisk/stick in cop car ritual.
3: Safe cities. There is a reason Americans have to continually move ever-outward, if only so the strays their kids encounter are puppies, not rounds due to gang crossfire. It would be nice to not have to keep moving to suburbs so kids can have playgrounds and places to hang out... other than the streets.
4: Actual transportation infrastructure. That way, I can get anywhere in a town in 30-45 minutes. As it stands now, a one way trip 20 miles can take up to three hours due to buses only coming one an hour... and it isn't feasible to bike it. I could try carrying a Brompton, but those get heavy after a while.
5: New highways other than toll roads. What happens is that the long-haul truckers drive their rigs through residential areas in order to not pay those. Lots of side view mirrors wind up destroyed in the street, and drivers getting stuck in cul-de-sacs trying to find shortcuts through a neighborhood.
6: Real infrastructure. China has spent trillions on adding new airports, while general aviation has declined from a popular sport to only for a few elite here in the US.
7: A functioning public school system, perhaps mirrored after a civilized state like France or Germany.
The ironic thing is that if the US went with a VAT, this would make things a lot fairer... you can hide income. That Maybach is a lot harder to stash away.
I was pretty happy using Turbo Tax every year, even buying it, every year. For years. Then Intuit had the brilliant idea of breaking my perfectly adequate version of Quicken - they disabled the ability to download data from my bank.
I promptly found a FOSS replacement for Quicken (Gnucash) and have vowed never again to do business with Intuit for anything.
I've been successful in keeping that vow for the last ten years or so and see no reason I should need to break it in the future.
Are you listening, Intuit?
Jerks.
I use Turbotax basic running in a windows VM with no network access (I won't install it on a real computer because of this: http://slashdot.org/story/03/02/16/1549232/turbotax-drm-writes-to-your-boot-sector). I don't trust efile either, I print it out and mail it in. I fill out the IL state tax forms directly into the PDFs provided by the state.
There's a reason the Federal Government has spent $Billions on ammunition for their gazillion handguns and assault & sniper rifles.
They steal tons of my money. Money that I would use to help people (mostly Americans), buy things at American stores, save for retirement, etc. Their exorbitantly high tax rate (Federal, State and Local) has exceeded the Stamp Tax and Tea Tax that the British Crown imposed on their North American Colonies. It is immoral.
...is what I've been using for years. I'm glad that the first year I went electronic I chose TaxCut (H&R Block's software original name) the first time, because I can't see any real difference between it and TurboTax except that TurboTax is significantly more expensive for any particular level of functionality. Using the second most popular in this case is quite advantageous. Sort of like buying an MP3 player other than an iPod. Except for less third-party support, you can get the same functionality for a lot less cash.
Actually, the direct deposit will go through regardless of whether you screwed up or not - they'll just come knocking in about a year and a half if they find any mistakes, and ask for you to pay the difference, plus interest.
I had that happen twice - once when I legitimately made a simple mistake (they just told me how much to pay), and one other year; first, they questioned my earnings (my employer overpaid me, took back the difference, and then reported my original earnings on my W-2, and did not submit the corrected W-2 to the IRS); then they questioned one of my credits, for which I was allowed a special rate for living in a federally-declared disaster area. After I submitted proof for each item (and waited a month or two for a reply each time), they accepted my return as originally written.
So in general, it's usually not too painful a process even if you make a mistake. But I'm sure somebody will be happy to share their story below where it WAS a painful process... :-)
It's all a monumental waste consuming time and resources that could be better used. The government makes the money, puts it into circulation, and then at the point of greatest dispersion makes everyone work hard to get some of it back. It's a formula for strife, conflict, anger, and fraud. If I ran a store that way I would have to make all my customers keep track of everything - every transaction, every special, and any refunds all year long and then all show up with all their documentation on one special day for a grand reckoning. I'd probably need a bunch of armed guards that day, too. I would need an army of accountants and more of my resources would be tied up in that system than the whole rest of the business! Of course, that is exactly what we have with the tax system today. The entire tax system and the huge industry supporting it could be replaced by a few people and a small truck (or maybe just a small computer). At the point where the money is created and goes into circulation a portion is sent to the IRS. Done. Billions saved, resources freed, and all the pain gone - just a bad memory like emptying chamber pots out the window and hoping that somehow the street will get cleaned up soon.
Anyone answering a question of this nature online is being foolish. AC, moniker or not.
Unfortunately ars is too late for most people this year, but I made a point to not pay ANYONE to do my taxes this year, particularly Intuit.
http://arstechnica.com/tech-policy/2014/04/turbotax-maker-linked-to-grassroots-campaign-against-free-simple-tax-filing/
At the point where you can itemize your deductions, you're better off paying someone else to do you taxes. A good accountant will more than pay for themselves - you'll likely be able to recoup thousands of dollars. A normal human just can't stay on top of the US tax code enough from year to year to know how to file for every qualifying deduction.
Finding the right accountant/tax preparer is very important. I don't have a lot of tips there other than asking around - I recommend asking some small business owners who they use. I've gone through 4 different accountants over the past ten years. One got me audited, two were just so-so, and now I have one that's fantastic. You probably don't want to go to one of those tax mill places like HR Block, although there is some advantage to working with someone who sees A LOT of tax returns. You probably also don't want to go to a big CPA firm that doesn't a lot of business work.
Even more important, if you don't own your own business yet, you need to create one. Filing an LLC is fairly simple in most states. Your business should be fairly in line with one of your hobbies and the writeoffs will be well worth it.
----- obSig
Those things are handled at the state or local level. I've always felt like I get my money's worth from state taxes and more so from my county taxes. Federal taxes? No.
"Here, you deal with it. Call me if you have any questions."
$50 well spent.
What software do you use that adds up all your sales tax, property tax, fuel tax, and all the other taxes plus the fees that are passed on to you that are hidden in the costs of the goods and services you consume?
If you keep all your receipts and have them entered into a financial software then it will spit the appropriate info out for you.
We have that in the US as well. It's called witholding, and everyone not self-employed does it. If you don't there's penalties for underpaying come April 15.
The crazy part is that the US still requires everyone to self-report on this at the end of the year, even though they already collected the money. You're also expected to list all other forms of income, deductions, and credits and recalculate your tax burden yourself.
Annual tax review, reassessment, and filing should not be a multi-billion-dollar-a-year industry.
I'm out of my mind right now, but feel free to leave a message.....
I also help my landlady carry out her garbage.
$1B / 100M households = $10 per household average. Not worth it.
My father is a volunteer tax preparer based out of our local public library. He will prepare anyone's taxes for free regardless of how complex they are. And this is not just him going it alone, he is part of a program that is funded by the IRS and use tax software the the IRS provides. I recommend that people look into this in their area if they would like someone else to do their taxes but don't want to pay someone like H&R Block to do it. This is a good option especially if you have a fairly complex tax situation. Since I travel for work a lot, I usually have to file taxes in more than one state. I have had as many as 5 state forms in a year. I used to win the award for the most complex taxes (especially the year I switch jobs, moved to a new state, got married and worked in 4 additional states), but he has been doing this for a while now and has encountered some really off-the-wall situations. Everything from I am self employed and have a pile of receipts for you" to "I haven't files my taxes for the past 10 years" to "I am a Syrian national living in the US under political asylum". I'm sure I could do this all myself with TurboTax just fine, but I do like having a person I can ask questions to. For instance, this year I got a really large refund. I don't like giving the government such a large interest free loan, so he was able to give me some advice on what factors were contributing the most to my huge refund (i.e. was it the amount of withholding, or one of the many deductions I was eligible for?) and devise a plan to try to reduce the size of my refund for the next year.
"It's not whether you win or lose, it's how drunk you get." -- H. J. Simpson
Until the IRS upgrades to the '90s and lets you use their website to file, I'm not really interested in filling out a million questions on some scammy website, or going to an accountant to fill out some basic paperwork anybody could do. It's easy enough to fill out the paper forms and mail in a check (though that is the only thing I am likely to write a check for, or put in the mail this year).
It's incomprehensible to me that there are this many people on /. using online services to pay their taxes. Why on Earth would you pay those fees?
I download the 1040 (whatever flavor I need to, it's been changing over the years) in PDF format, fill it out, print it, and mail it to the IRS. I live in New York State, and they allow free e-file this year, so I do that for my state taxes. In previous years that wasn't available, so it was again a filled out PDF, mailed to the appropriate agency, just like the Feds.
The notion that I would pay a DIME over the absolute minimum to file my taxes is insane to me. I will pay money for the right to pay more money?!? Are you kidding me? The 1040's aren't that hard to figure out, and any questions can be answered using Google inside of 5 minutes.
Since they only pay less than 10 percent tax maximum on their earnings, while the rest of us pay 2-3 times as much, I just write the check to them and cut out the IRS tax-subsidies-for-Billionaires middleman.
-- Tigger warning: This post may contain tiggers! --
I download and print the forms from the IRS website. I then proceed to fill them out longhand in pencil Make a xerox copy to send in. Wait to 11PM on the last day to file (Apr 15th) Go to the post office and mail them in. AlleyTrotter
I dunno. Maybe I'm a Super-Genius, like Wile E. Coyote. And growing up, my Dad was an acct, so maybe I never inherited a terror of the IRS.
But the forms are easy to do. Tedious perhaps, but really easy. You need an attention span about about 30 minutes. You need to be able to read clearly and carefully follow directions. You need to be able to add, subtract, multiply and divide. If you use the "whole dollar" method, you need to be able to round off numbers, up if 0.50 cents or higher, or down if 0.49 cents or lower. So, maybe 5th grade level? Probably 3rd grade if you use a calculator.
Now, the tax form IS just like those "trick tests" you got in 3rd grade, the ones that at the top said "Read through all the instructions, before doing anything". Then they had like 30 complicated steps. Then the last step said "Now that you read all of the directions, skip steps 1-30" You have to read the directions, and FOLLOW the directions. If you're the kind of person that doesn't like to follow directions, you're going to do your taxes wrong.
But, I can't see WHY all of this has Americans so terrified of the IRS. They are accountants.
Anyways, I do my taxes using the free online forms -- basically a PDF of the tax form with clickable fields where you can type in the numbers. It's the same as doing it on paper, except that at the end, instead of mailing it, I can e-file it. The state taxes, here in MA, has an excellent Web-File system.
It took about 2 hours, to do everything. This includes gathering up the old mail with "Important Tax Document Inside", inputting the numbers, reading the directions, and submitting it to the IRS.
ps. And I have gotten a so-called "scary" letter from the IRS. It was basically account-speak for "hey your numbers don't add up, we think you owe us more money. if you disagree -- prove it" so I sent them back a letter that said "hey guess what, you're wrong - here's my proof" (except in nice account-speak). And that was that. Life didn't end. They didn't come and kick my puppy. nothing bad.
1) got form to do self assessment
2) lost it
3) got fined
4) panicked
5) registered for online submission
6) lost login details they sent
7) found them
8) put all docs I needed in a bag in 'safe place'
9) lost that
10) rerequested p60 from employer and bank statements
11) got everything ready by computer
12) got distracted and cat had bit of a play with them
13) logged in took 30 min end to end ( including time to reassemble p60 from cat scratched pieces)
works for me
I disagree. If you're a standard working stiff with nothing but W-2 and maybe some interest income, it's highly unlikely that your itemized deductions will be anything more than taxes, mortgage interest, and charity. You probably won't qualify for medical or miscellaneous deductions because of the AGI percentage requirements. You might have child care credits, but that's a credit, not a deduction. You don't need a professional to work that out.
Yes, some people have special circumstances, but it's just incorrect to set a general expectation of being able to "recoup thousands of dollars". For most people, it's not going to happen.
Now, if you are self-employed, that's different.
I don't buy lottery tickets* but I view them as an opportunity to dream of what it would like to be wealthy.
* I have three times in my life as party favors for others and about 20 times as part of an office lottery pool which was really about not being the odd duck refusing to be part of the group. The "winnings" from all of these amounted to under 10% of the cost of the tickets.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Things like kids (declared at birth), significant others (declared at weddings), buying houses (declared during the purchase), etc, are all known to the state and taken into account. Pretty easy in most cases.
I don't think there's much possibility to hack the system since to only option you have is to agree or not. And if not I guess you need to file manually.
Non-Linux Penguins ?
"Most people have no idea how much they pay in taxes." proof?
Even though I don't write a check, my tax software it kind enough to provide me exactly how much I paid in taxes, so that I can easily calculate my EffeciveTaxRate (19%)
Don't need software for that in France, the "avis d'imposition" has your effective tax rate printed on it.
Watch this Heartland Institute video
Fortunately, I've got a friend who does taxes professionally. I suspect what he bills me is less than his normal rate.
I used to use software (Anything But TurboTax: IA! IA! INTUIT FTHAGAN!!!) but one year, I dumped a bunch of ESPP stock into a managed investment account, which does well, but THE TAX FORMS!!! It's a metropolitan phone book sized stack of paper, and I could not figure out what of all those pages and pages and pages of numbers in very small print were supposed to go in what boxes of the tax forms.
As violent Rambo-esque fantasies started to dance around in my brain (which at my age and shape (round) is really ridiculous) I decided to seek professional help, and that's what I've done ever since.
Comment removed based on user account deletion
Don't forget the 20% Pay-As-You-Spend as well (aka VAT), and the £2-per week tax on stupidity, aka the Lottery.
There are sales taxes in most other countries too, and dunno about the UK lottery, but in the case of the Irish one, the profits from it are mostly used for charity anyway, so if you prefer to think of it that way look at it as charity that could make you rich.
On the American tax returns front, I think I might actually technically be supposed to do them (dual citizen), but I haven't lived there in a long time, never had a job or earned money there, and don't currently plan on moving back there, so I don't see any point.
This sounds preferable to giving the government an interest free loan for the amount of my refund for the duration of up to a year, each and every year.
Federal Income Tax = 15%. And that included a special one-time deal. Otherwise it would be 12%. Standard deductions and credits. Nothing special.
And I am close to the top 10% of income. I still can't figure out why everyone complains so much about taxes. I find it quite fair.
I didn't include state because that is wildly variable from TX to NY to MT.
I finally updated my sig, but now it's lame.
It costs about $2 including stamp, envelope, paper, and ink.
I am very small, utmostly microscopic.
What software do you use that adds up all your sales tax, property tax, fuel tax, and all the other taxes plus the fees that are passed on to you that are hidden in the costs of the goods and services you consume?
You want everything AND a pony. Most of us can get enough blood pressure off the reported Federal rate alone, which is all the 1040 is intended for anyway. If that's not enough, next time you buy gas, read the numbers printed on the fuel pump. The lowest one is the actual gas price, the next highest one is the gas tax and the shockingly big one is the sum of them, which is what you pay at the register.
My property tax I know because the annual statement I get gives me a number that can be used as a deduction off Federal tax. State taxes you do another form for unless you're one of the lucky states, sales tax is what makes everything not cost what the sign in the window says it does.
Merchants are at liberty to find whatever tax solutions they can, but don't expect them to itemize out what they spent or saved on your sales receipt.
Dammit %19...is that including state? Mine is %35.
You're either in the 1% with bad tax advisors or need to look at how you're calculating things.
I haven't paid 35% since people had lifetime employment and could travel without stripping naked.
Reluctantly.
Pen and paper, mail forms to IRS as always since the early days. I have copies of ***exactly*** as submitted. Nobody else gets a cut except USPS for mailing costs.
mfwright@batnet.com
First I go buy a 80MG oxy to prepare for the massive headache due to bitching I'm about to get for fucking up.
2. I get a plate, straw, lighter, and my drivers license out.
3. Crush and snort.
4. File taxes
5. Enjoy the fact that I'm too fucking high to care once the warden goes over them.
6. Enjoy the rest of my tax day buzz playing Path of Exile.
7. Start over the next day with steps 1,2,3,6
As long as I am required to send them a paper copy of my W2, they will get EVERYTHING via paper. I will not do part of it electronicaly then mail a paper W2. It's all or nothing.
I also will not comply with this unconstitutional Obamacare non-sales tax. Even though I have insurance, I will not aknowledge it on any form, nor will I pay any tax. I will MODIFY the return to NULIFY the tax, and if they don't like it, they can take ti to court.
When I pay for my gas I realize that the beautifully landscaped, pot hole free four lane highway I just pulled off of was built with those taxes. Just as I realize that abundant, cheap food at my local supermarket comes from subsidized farmers. Most of us (Americans) get way more from the system than we put in.
I'm Canadian, and have been using StudioTax (free - make sure you don't accidentally download the "Enterprise" version) for several years. It's one of the few times I need to boot into Windows, so I'm hoping they make a Linux version soon (ha!).
How do I pay them? With a check to the IRS and sometimes the state (this year the state paid me $50 - woo).
So the real question: How do I file them? With an accountant. Why? Because I own rental property and even if you can do business taxes without an accountant, you're still better off hiring one. Why? Because you can expense it to your business (i.e. write it off), and write off your personal taxes as well, as long as you follow the IRS requirement that you are only going to an accountant because of your business. The best part is I spend 1 hour doing taxes each year, and the last year I did them myself I spent over 30 hours just looking up depreciating asset schedules (with rental property, all expenses are paid over a period of time, so a 5 year depreciating asset needs to be deducted at 1/5 the cost over 5 years - I had to find some items in the massive IRS tomes for these at my local library) and about 55 hours total (investment income was about 75% of the remaining time - played the Wall Street Lotto a bit too much that year).
Bottom line: if you own a business, hire an accountant.
They require you to use their credit card payment "vendor". Yeah that word has quotes in their description, so I'm sure Turbotax owns it somehow.
"Vender" charges 2.49% of your tax expenses just to let you pay online. So what should cost $0.25 to swipe a credit card online can be quite a lot depending on your payment.
Bye Turbotax. Also with their lobbying shenanigans and attempts to keep the tax code complicated they've just gotten higher than Comcast on my list.
Cwm, fjord-bank glyphs vext quiz
Tax day...? Tax day? Tax day! Oh shhhhiiiiiiii....!!!
Not a bad idea- so long as you couple it with a "How much do you get back from the government" sheet. The majority of Americans get back more than they pay, and the ones who complain the most are often the biggest mooches.
"Seven Deadly Sins? I thought it was a to-do list!"
Having to do both CRA (Canadian Revenue Agency) and IRS/Indiana DoR filings, I find that whole 'Paperwork Reduction Act' thing is quite ironic.
The first couple of years I had to do US tax filings (through an LLC), it took me a month or so to get the accounting the way I needed it, and to figure out through the massive maze of forms which ones I had to fill out and how I had to fill them out.
Now, with the exception of filing to get my withholding tax back, it takes about an hour after I've got my accounting all in order. I've got it down to a system of completing electronic PDF forms (6 forms for the IRS, and another 5 or 6 for Indiana), printing them out, and then signing two of them. So, now it's mostly stress more than anything. But good God man...why so many forms? And lengthy ones at that.
CRA's are mostly a couple of pages...the odd one might be three.
Hammer Software http://hammersoftware.ca/ Good service, Creative solutions - Hamilton, ON
Only two items on the form:
1) How much did you make last year?
2) Send it to us.
For a large majority of Norwegian citizens the old nightmare of filling in the tax return has been reduced to a very simple scan:
Does the pre-filled tax return I got in the mail (or checked online at the government site using secure two-factor authentication) include everything it should, i.e. all income, bank statements, any funds/stock and/or debts? The answer is Yes for something like 70%+, in which case they can do nothing, or accept it via the online site or even using SMS.
My personal return can have some consulting fees on top of my normal salary, so I have to login and add an extra income item, then submit the updated return.
Total time spent is about an hour.
Terje
"almost all programming can be viewed as an exercise in caching"
Here in Oz we dont have state income taxes or state returns to worry about and if you don't want to use an accountant or tax agent to do the return (because you have a simple return), you can just file it electronically with the free government-supplied etax app. (or as a paper form if you really want to)
What software do you use that adds up all your sales tax, property tax, fuel tax, and all the other taxes plus the fees that are passed on to you that are hidden in the costs of the goods and services you consume?
What software? Excel. Although I don't individually add up sales tax (it's included on my receipts). It's called a budget dude. I balance one with every paycheck.
You could compute and file by pencil, paper and mail. Ans till chose to pay owed taxed by CC. The CC vendor would still ding you 2.49%.
Wrong. Do you buy clothes? Do laundry? Check your email from a computer at home? Do you pay electricity bills? Any of that kind of stuff can be itemized if done properly. More importantly, at the point where you itemize, the smart thing to do is start a LLC and accrue business expenses.
----- obSig
TaxAct, for at least the second year. It took me an evening of maybe 5 hours, while watching Netflix.
I had all my paperwork together. Not too complicated, even though there was
- a new home purchase
- a rental property with interest expenses, a few travel expenses for maintenance and depreciation write-off
- some stock sold at too much profit (thanks TSLA), but less than 10 transactions on a 1099-INT (and of course some dividends on a 1099-DIV)
- some Excel-calculated interest income from accounts in the UK (anyone remember Zopa)
- a bunch of foreign accounts that I just had to report
- regular employment with a W2 and a few unreimbursed travel expenses and some purchases, but no in-home office (because I think that can trigger audits)
Last year, on the other hand, was a total nightmare, due to many stock transactions and TradeKing buying Zecco, and the resulting 1099 mess. Not good.
I didn't go for their audit support insurance, but I might use HR Block next time again because of their in-person audit support.
I'm not sure if TaxAct caught all possible expenses and calculated things correctly, but I suspect it's good enough. I assume that an accountant would not have saved me more, given maybe 3 hours of saved time and their fees. Their defense in case of an audit might be worth it, though - in my case the risk is relatively low, and I think my simple expenses are very defensible anyway.
The complexity is not just from the tax code, but because income is inherently complicated. It's simple if you just have a wage and you're done. That's why we have the 1040A and 1040EZ forms (I even had one form in grad school that I filed by using at touch-tone phone!). But start investing your money, even in cases where you're hands off and it's just a bank doing all the work for you, and things get complicated. Interest and dividends, gains and losses. Tax refund from state is income for federal tax. Of course, that's all reported to the IRS so they technically could do the calculations for you (and believe me, if you get one number wrong or forget one bank account you will get the scary letter in the email). Then it gets harder with things that aren't always reported or reported partially; stock options, individual stock ownership, home hobby that makes money, rental income, alimony, proceeds from trusts, etc. Subtract off retirement plan contributions, disability insurance payments. Include unemployment payments.
Then there are deductions. Mortgage interest deductions if you own a home, and deduction for property tax. Charitable contributions (not hard if you keep a list, but harder if you donate items instead of cash). Foreign taxes paid (rare but it comes up if your bank invests that way). Medical expenses (if they exceed a certain amount).
The tools handle all this though, and it's not hard. Apparently many professional tax preparing services use similar tools and give those to the customers to have them fill in the data first.
It'd be nice if the whole thing could be in VAT. Simplify it all, eliminate the loopholes. Except that this doesn't intercept capital gains and lets really rich people just horde money, and a lot of people feel it's their duty to stamp that out.
Thing is, everyone has a differerent tax system, everyone changes the tax system over the years, just about every scheme has been tried somewhere, but no where has a perfect system been found (and if it is found, changing political views will soon make it imperfect).
Sometimes the tax is somewhat artificial. We have this goofy thing called AMT (alternative minimum tax). It was originally designed to try and get at least some money out of the extremely wealthy people who use lots of loopholes. Ie, it's meant for the type of person who joins the yacht club. It basically calculates your tax a different way with various items now taxable that were otherwise not taxable, and whichever tax is higher is what you pay.
However over the decades the limit for which AMT applies was not increased to account for inflation. So a lot of otherwise middle class people end up being stuck with AMT. And as well a lot of middle class people now end up getting stock options, which previously were things that only executives ever received and so the tax law also assumes you must be a rich bastard if you ever got an option. So if you exceed the AMT limit which is not hard especially with a two income family, you now owe taxes on a lot more things. You receive/exercise stock options and even though you have received absolutely no cash at all you may now end up paying taxes on it (you may even be prohibited from selling that stock). In the dotcom era it was not uncommon for some people to have to obtain a loan just to pay their taxes due to AMT! If the stock later plummets you can recover that by declaring a loss, but you can only claim a small amount of a loss per year, meanwhile you can be in debt due to that tax burden.
Some in congress wanted to change AMT due to all the problems during dotcom era, but so many were highly resistant because most of the country still thought of AMT as something only the extremely wealthy ever paid, and that fixing AMT was akin to giving tax breaks to the rich. Never mind that people lost their homes over this or had to arrange special payment schedule with the IRS because they literally did not have enough money in cash or assets to pay the tax.
A while back I living in NYC and doing IT full-time in NJ while also consulting with a home-office business. This required me to file US Federal, New York State, New Jersey State, and New York City taxes, including all the complex forms for self-employment, business income and expenses, depreciation and amortization of property, etc.
I created a complex Excel spreadsheet with a master tab that has 156 lines of calculations representing every line and field in all the forms that I had to file that were calculated dynamically from multiple pivot tables in tabs that were consolidated from other tabs that were the source of income, personal & business expenses, car, house, and tax tables.
I would update the master tab according to this year's tax code changes in the instruction manuals for the forms and update every line with the current year's additions or formula changes. Then I populated the tables with values from my W2, 1099's, and utilities, bills, receipts, expenses, and then entered this year's tax table information. The spreadsheet would automatically calculate my taxes and all the lines of all the forms.
At the end I filled-out the PDF versions of the forms and saved them. Then I used TaxSlayer.com to enter my values and use that web site to cross-check my numbers then file electronically.
One year I found that TaxSlayer.com's web site had an addition/subtraction error in their forms that calculated the hold-over value incorrectly and reported it to them to fix it and to the IRS since it caused a minor error on my taxes.
Another year NYS taxation department sent me a case complaint that I deducted an incorrect amount of NYC city taxes from my state taxes and I fought them and won the case by showing them a canceled check of paid NYC city taxes for my self-employed business and they reversed the case so I won against "The Tax Man".
No accountants needed, no tax software needed, you just need patience and arithmetic with some simple Excel formulas thrown in. Best part of the dynamic calculations is that when I want to forecast my taxes I can change some numbers on some of the tables and see the whole thing change after recalculating.
Still, US taxes needed to be simplified and be more evenly spread out and fair to everyone. eFile should not be necessary as the IRS should use your income info anyway from various sources and send you a letter stating that the correct taxes were withheld every year from your income automatically. Difficult taxes haven't helped anyone in rebelling against the IRS or simplifying the tax code we've seen, only have created a tax software filing lobby spending millions on keeping taxes difficult. After taxes, let's go after the legal and court system complexities.
I've had bad experiences with Turbo Tax, missed deductions that cost a lot of money. After that, I have done my taxes, and those of my family members, using the PDF forms (use Evince or Okular for filling them out) and a spreadsheet (LibreOffice last several years).
Self-employed, all expenses/income categorized in GnuCash, easy exports into LibreOffice, a few simple spreadsheets and the taxes are done. Yes its a pain, but the security of filling your own PDFs out and mailing them (I always get a tracking certificate/proof) is first-rate.
When you use TurboTax or TaxCut or what have you, you are assuming that your private tax data is not scooped up and used. That's a bad assumption. A paper form is harder to share with outside vendors, you have better assurance that the IRS partnerships won't get your data for marketing or what have you.
I've had bad experiences with the IRS not getting a tax return, so now I ALWAYS use a mailing proof and tracking. Expensive but worth it.
I don't trust private vendors with my financial information, so I do my own taxes myself, anything more complex that what I have (no stocks, no real estate) and I will get an accountant.
Yep. In the top 5% and my tax burden is not godawful. I do not know who said this, but taxes are the price I pay for living in a civilized society.....and notwithstanding all that is wrong with the world, where I live is pretty good.
I have gotten a tax return for almost as long as I can remember. Usually a nice sized one, at that!
Pay As You Earn. Submit one IRD number to the payroll office when first starting work and then forget about it.
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
Yep. I don't mind paying taxes. And I'd like to see all of those implemented at the Federal level, the better to minimize the effect of the mouth-breathing knuckleheads who reflexively oppose spending because 'those people' might benefit.
I still can't figure out why everyone complains so much about taxes.
It's mostly because politicians tell them they're taxed too much and should complain. It has nothing to do with actual tax rates, just a way to make political hay that sounds good to a lot of low information voters.
Step 3: get arrested for terrorism.
Federal Income Tax = 15%. And that included a special one-time deal. Otherwise it would be 12%. Standard deductions and credits. Nothing special.
And I am close to the top 10% of income. I still can't figure out why everyone complains so much about taxes. I find it quite fair.
I didn't include state because that is wildly variable from TX to NY to MT.
You must be talking about some country other than the U.S., even though you are throwing in U.S. states to confuse the matter.
In the U.S., Federal Income Tax is only 15% if you make less than $36K a year ($72K for married/jointly). There is no 12% bracket. For anyone making decent money, the rate is 25%, up to 39%.
"Quite Fair" is of course, completely arbitrary, but for the U.S. gov't to garnish 1/4 of all my earnings, and then subject everything else I do with money to an additional tax doesn't sound fair to me at all.
Captcha is "piracy". Quite appropriate.
You don't have to pay taxes on interest or dividend income? Your employer doesn't know that.
As long as you're getting a refund, there's no problem. If you made some mathematical mistakes, then the IRS will correct them for you. If you later realize you didn't take a deduction, then you can file a correction.
The real problem comes when you owe money, and you didn't pay it in time. That's when the IRS starts charging 1% interest per day (up to ~30% or something). Also, if you claim tax credits that you don't qualify for, you could have to pay them back.
"First they came for the slanderers and i said nothing."
I use the freefile ones, after running the numbers on the paper forms. This let's me double check everything.
Then file electronically. I agree though, filling out the electronic W-2 copy is a pain in the butt. Come on IRS, you already have it! Or will have very soon after my return gets there. Why do I have to re-enter the data you already have?
My taxes are deliberately setup to withhold extra, because I stink at saving money and I know it. So this way it just happens, and I get a refund every year. One year I had to pay a few hundred bucks I didn't have so this also makes sure I have plenty of cushion in case something goes wacky and I owe.
It so happens tax refund season also falls right on the time when I need annual work done on my car, which I would not otherwise have the money to cover. So that's what I do with my little refund every stinking year. Car repairs.
Anyway, the moment my W2 is available for download from my payroll company, I ask HR if that's final. Because sometimes they revise it. And THAT sucks if you have already filed. Once I get a final W2, I run it through one of the online tax software things mainly to see where the numbers fall. They'll let you get all the way to the end before you have to pay. Normally I do this through two competing products to see if they have the same results. So far, they always have.
If I am due a refund, I file that part of it immediately. Typically a Federal refund posts in a week. This year, I filed on Jan 31 and had a refund on February 6.
Normally I owe a little to my state. $23 this year. If I owe, I mail it around April 14. No need to pay them early.
Now I have a very simple income. One job, plain W2. I used to own stocks outright and that messed things up badly for me. Have to do all this depreciation and interest basis whatsit junk. HUH? All I wanted to do was own a few shares in companies I admire or use or liked or whatever, totally a whopping $30 or something. Wasn't trying to make money and didn't. But those few symbolic shares did cause a paperwork nightmare as 1099s started coming in after I've already sent in my tax form and spent my little refund and forgotten all about it. What do you mean I get a 1099 for ONE share of something that lost money? wtf do I do now? I already filed.
I never could figure out what to do with all that stuff but since the shares were worth approximately 10 bucks and had lost value, I ignored it and presumed the IRS would not bother to audit something so small. They never said a word. The one company I really liked went private, from which I got jack. The sale price per share was practically nil. And that ended my desire to have anything to do with stocks. So yeah don't do it. Let your 401(k) do it.
Sig for hire.
I agree, this is how I pay. I am self employed, and have to save up for "tax day", where at the end of the year, I have to write lump sums to both Fed and State. Sucks every time, and you see how much friggin' money is going out to them. I could practically buy a car every year (outright!) with the money that goes to the IRS, that is SAD and depressing and enough to make anyone angry.
For those who say you're supposed to file quarterly, yes I know, and don't, I'd rather keep the money all year and have at my disposal if business dies down for cash, not to mention I don't want to do my taxes 4 times a year...and you only pay a $200 penalty for not paying quarterly, which is peanuts to what what the actual bill is.
I think everyone should have to pay like this, and the tax system would end up getting overhauled, and taxes cut very fast if everyone did this as they would be more aware.
The thing that drives me most nuts (and I used to do this too when I worked for an employer), is hearing people actually get happy about a "refund". I think the "refund" is just a way for the IRS to make you get excited about all the money they are taking from you...and it works in most cases. While most people don't like taxes and the IRS, those same people get uber excited about their tax refund of $2-$5K, and forget about the other $15-$30K that the IRS is keeping of their money. (actual numbers used just estimated ranges for decent wage earners obviously).
Rich people get income from "investment". Poor people get income by working. When you invest, you take the accumulated surplus work and use it to accumulate a larger surplus. You also retain more surplus. When you work, you directly contribute labor that is needed to sustain life and civilization and give away a "fair" portion of the surplus to your bosses.
We have a sliding tax scale. Everyone gets taxed 15.625% (social security and medicare) on labor. Except if your labor is valued about 2x to 3x above average. After $120k per year, you pay minimal additional SSI/Medicare.
Then there's income. Income tax is mostly paid by fools and people who earn about 2x to 4x the average wage. If you're in the lower class, you probably pay nothing or get a small stipend from the government. If you earn average to about 2x average wage, you most likely pay 8 to 15% of your labor in income tax.
Then there's sales tax. That averages around 9.5%. It's effectively regressive because those of us who spend almost all of our income on things we need end up paying 6 to 10% of our income in sales taxes. Rich people spend very little of their total income in sales tax. They "spend" a lot of their income on generating more income instead of on taxable purchases. The sales tax rate is more like 1 to 2% of rich peoples income.
Then there's capital gains. Rich people earn most of their income from capital gains. They nominally pay 15 to 20% of capital gains in taxes. In reality, the richest people pay almost no capital gains because it's much cheaper to just buy tax loopholes and hire attorneys and accountants.
Lets say you work hard and manage to get yourself into the "upper middle class". Your family makes about $160k per year. Probably 7% of that goes to sales tax. Another 15% to SSI/Medicare. Another 10% to income taxes. Another 4% to various state and local taxes. You're paying about 36% of income in taxes. It could easily be more like 40%. The millionaire a few neighborhoods over? He pays about 3% in sales taxes because he only spends about 500k of his annual income. 20% in income taxes because most of it is capital gains. 5% in state taxes and 4% in SSI/Medicare because he doesn't have to pay much after around $120k. That's right: 32%. Also, his company may be getting tax breaks for "staying in the area" or investing in solar or whatever else he can finagle out of the local and state governments. So that's it for taxes.
Now, lets also look at how income is distributed. We already know that basically, right now, the rich get richer and the poor tread water or get poorer. How come? It pretty much flows naturally. Capitalism is mostly about competition. In nature, competition produces winners and losers. The alpha male lion does most of the mating (hence the "lion's share"). The most well adapted species survive and take over. The rest go extinct. There's a direct parallel between our economic system of unequal gains and the fact that we, as a species, are winning the competition for survival so thoroughly against every other species that we're presently causing the greatest mass extinction event in the history of the world.
Nature is really just an extension of physics whereby biology governs a set of complex chemical interactions that collect, store and expend energy in endlessly varying eddies, pools and swales. Life surfs on the energy gradient that exists between the sun and the vast cold emptiness of space. We are fractal perturbations of the otherwise straight forward march of entropy in the universe. Evolution is the process whereby life develops ever-more efficient and complex means of subsisting on smaller portions and more exotic locales in the energy landscape. This demands that the least efficient competitors die off to make room for more advanced ones.
We are transitioning out of the existing system, riding the phase-change whereby evolution is no longer being playing out exclusively in the biome, but also in memes manifested as technolo
the government actually calculates my taxes for me, sends the details and asks if any corrections are needed, and in the last 21(!) years I didn't need to send any. Did once, just to see that it works.
If the IRS were run by technically knowledgeable people, all taxes would be done online.
Libraries would have bootable DVD copies of a version of Linux, allowing even people with malware-infected computers to do their taxes securely. Records could be saved on USB drives, or burned to a DVD from a RAM drive. If there were mistakes in the calculation of taxes, fixing the problem would be the responsibility of the IRS.
Buying tax software would then be completely unnecessary. I dislike how the tax software tries to trick people into paying more and into giving information to the tax software companies. I would like to avoid paying the full price for tax software every year, when there are very full changes in the new versions.
There would be no need for the IRS to supply new DVDs each year, because all calculations would be done by IRS computers. The IRS Linux DVDs would have holograms printed on them; any counterfeit DVDs would cause the same kind of prosecution applied to counterfeit money.
I would love to be director in charge of that effort. I love the U.S., feel really bad about the defects in government, and would like to help the government in a way that benefits everyone.
At present the enormous complexity of dealing with taxes tends to discourage people from starting new businesses.
If you're claiming to be a former employee regarding "what do you use to pay your taxes?" (which is implicit NOW, not in the past) it's relevant to know WHEN you were an employee. Were you a phone/online chat technician, a meet-in-person tax consultant, or something else?
I don't understand why most people should pay for a software for income tax, or any income at all by the way. Richest people with many sources of income or independent workers who are a firm as well as a person may need some consulting, but this is service, not software.
:-) Paid amounts, other taxes, and the way they are spent are other topics...
As a French, I'll do this in the next weeks:
Go to the website of government where I can pay all my taxes.
Enter my credentials (I got them my snail mail years ago).
Answer a few basic questions about marital status, address, spouse, age and number of children (very quick, the Fisc (our IRS) know everything and it has not changed).
All incomes from the family (employers, stocks...) are already known and pre-filled. I just have to check that it is in sync with all the summary papers that my employer or my banks have sent me these last weeks ("you must declare XX € in field XY, and YY € in field YZ"). If I want to check, I'll have to make some additions (hard!). I don't remember many mistakes since all this is already filled.
Tax deductions have their own fields. I must sum the numbers from the papers sent from by charities. The nanny for my daughter is already subsidized, so they know how much I've paid and can deduct.
The biggest challenge was tax deduction for the heating system and some insulation in the house. The problem is knowing if and how I'm allowed to deduct these expenses, not computing them. If I think that the 10% default for professional expenses is not enough, I can count all kilometers to work and a few other things. You need Excel to track all this, not more.
At the end the website tells me how much I'll have to pay, or how much I'll get back. If I want to calculate myself, the rules are simple enough that Excel should suffice. My grand father, whose situation was much more complicated, did all of this himself without computer.
So, French administration is on this rather simple and effective. Well, 500 years ago, foreign ambassadors were stunned by the efficiency of our tax system
I see comments from Switzerland or Finland telling this is not more complicated there. I read German newspapers and every year the tax sofware is a hot topic - but these people never knew how to make things simple (not a surprise that SAP was born there but I digress) (said as Germand-friendly Frenchie).
Christophe (Don't hesitate to point out my spelling and grammar mistakes, I want to learn - Thanks).
I'm quite happy not to be from your country. There are other variations of what we do elsewhere but in the UK, tax is deducted by my employer and sent to the "tax man". There are fairly simple ways of calculating how its done but basically, I pay 1/12 of my tax each month. Other deductions aside, I get about £10k tax free per year and pay 23% on the rest. If I was higher paid, some would be at the higher rate. If I was self employed, I would need to do what you have to do but even a tiny business can deal with PAYE (Pay As You Earn). I ran a payroll once and it took less than 2 days work per month to do about 350 peoples pay & deductions. Your system seems very complicated/labourious.
I'll see your Constitution and raise you a Queen.
True, but the parent point was on not feelign the burn of paying that money. I assume, that when you buy something, you acknoledge how much it costs and don't just swipe your CC blindly.
You won't know how much FICA you pay until you start to make money that's not under a W-2. That's an eye-opener.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
I have had K-1's for several years, I consider myself pretty financially savvy, figuring out a handful of K-1's by hand is not a simple task. I use turbotax because of them. Otherwise I would probably be able to so a free e-file or do it by hand. The other good thing about turbotax (or others I am sure) is I wait til the end of the year to contribute to an IRA, that way I can play around with numbers to get the most out of it. Obviously I wouldn't need to submit it, but it is handy.
In Estonia, the employer takes care of paying your taxes. When it's time for tax returns, you just log into the Estonian Tax and Customs Board website, it shows you exactly how much money has been withheld in taxes and how much you are eligible to get back. Then press "Confirm", wait for a day or two and the money is transferred to your bank account. The US just seems backwards in comparison.
Again, if you are a typical W-2 wage earner, those things CANNOT be deducted, unless you enjoy trying to explain them to your friendly IRS auditor (and having them denied). You can't be a business owner without a business, which most wage earners don't have. If you try to invent one, or even have a legit side business but attempt writing off non-business things to it, you are just asking for a very expensive trip to tax court and possibly prison for tax fraud. The IRS publications are pretty clear on what is and is not deductible for an employee. Your email example, just to cite one case, is explicitly excluded if we are talking about an employee checking email at home (see the example on page 4 of Pub 529).
AC you will never see this, but here goes. You have no idea how taxes work. 12% wasn't my bracket. That was what I actually paid (plus the one time deal that got me a nice penalty to make it 15%). You know tax/income = percent. My bracket was 25, but effective was 15 and with some credits and junk it came down to an actual 12%.
I don't use AGI to calculate how much I pay in taxes, but the total of all income. I brought in x. I paid y. That's z percent. It was 12%.
I finally updated my sig, but now it's lame.