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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.
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.
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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.
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
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 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.
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
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 :)
Yep all taxed at the lower rate of tax unless you declare that you are not a tax payer. If you are a higher rate tax payer you will be doing a tax return and have to pay the extra.
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.
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!
I have always wondered why it's not like that in Canada too...oh wait because the government can't keep track of simple things like where 1 billion dollars goes for a cancelled gas plant....
Germany here, but PAYE applies here too. It's similar for capital gains: The bank automatically sends your estimated taxes to the tax office. At the end of the year, you get a report. Exactly as you PAYE report, it contains a transaction ID which can be used to refer to those advance payments when you want or have to actually file your taxes. (If you can expect a refund, you may file one, if you have other income besides the advanced-taxed income, you have to)
bickerdyke
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
Not all higher rate tax payers have to do a return either. (Then again with gift aid and pension contributions relief even defining a higher rate tax payer can get complex - there was a big fuss recently over child benefit and the fact a particular claw back only applied to net relevant earnings rather than all earnings)
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.
True but if you have any sort of investment, or get any interest from savings (that is not in a tax free savings account) then in reality you should. That's means most higher rate tax payers should be doing tax returns.
IRS has the ability to do something similar, for those with relatively simple financial situations (not for real estate tycoons). However, Intuit has lobbied against allowing them to do so, as it would kill their parasitic business. A couple of articles:
http://www.republicreport.org/2012/corruption-taxes-fivemins/
http://techcrunch.com/2013/03/27/turbotax-maker-funnels-millions-to-lobby-against-easier-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.
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
"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.
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.
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
Better that taxes cause a little pain. It reminds me once a year how screwed up our tax system is. If they make it too eay, people wil forget about how much is beng skimmed off their paychecks.
We have automatic witholding as well. And the system could be made simpler. But I like the fact that once a year, I'm getting pissed off at a seriously broken system.
IRS Motto: We've got what it takes to take what you've got.
Have gnu, will travel.
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 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?
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
You are correct, there is no best choice for everyone. I have used an accountant since shortly after leaving school. I think I spent $50-$75 more than TurboTax would cost, however I spend about 10 minutes the night before my appointment gathering my forms, and typically 45 minutes in his office filling out and signing the electronic documents. I have too many friends that spend 3+ hours on a weekend trying to do it on their own. I consider that extra amount spent worth my time, and peace of mind.
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
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.
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.
It's not exactly the IRS's service; it's offered by the Free File Alliance, "a nonprofit coalition of industry-leading tax software companies partnered with the IRS to provide free electronic tax services."
I use them too... definitely beats driving to the main post office at midnight to make sure the return (or extension) is postmarked in time. :)
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.
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.
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.
so you never get tempted to spend the government's money.
You know, I really don't object to having to pay taxes, but I have never considered it to be "the government's money", because they wouldn't get any of it unless I worked hard to have it available for them in the first place. The annual tax-filing fiesta is really the only time I get a meaningful look at how much I pay for the government services I receive. Well, mostly the government services received by those less fortunate than me, but that's OK; I'd rather be paying for services I don't use than be dependent on those services. I'd rather go through the filing process and be aware of the total bill, than to have it done automatically and be blissfully unaware. Looking at the deductions on my paycheck just don't have the same impact as crunching the numbers and looking at the annual total.
...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.
Better that taxes cause a little pain. It reminds me once a year how screwed up our tax system is. If they make it too easy, people will forget about how much is being skimmed off their paychecks.
I'd mod you up if I hadn't already commented. Turbo Tax makes the process pretty painless, but looking at that "total taxes paid" figure is always an eye-opener.
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.
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
"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.
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
Personally I wish they would move tax day to October 31st. Talk about a scary byzantine nightmare, so it would be a fitting day. I thought I had complex taxes but I guess there are a few circles of hell that are still worse than the one I am stuck in.
This also puts tax day right before election day so maybe something could be done about it. I would prefer a much simple cleaner system that doesn't play favorites. On this topic this is one of my personal favorite editorial cartoons which happens to be the venerable Dr. Seuss.
Time to offend someone
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
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.
Personally I wish they would move tax day to October 31st.
Let's see: Full moon, lunar eclipse, tax day. I'm thinking of dropping my return off wearing a werewolf mask.
This also puts tax day right before election day so maybe something could be done about it.
I think some thought went into keeping the two dates far apart. They say you have to discipline a dog as soon as you catch them doing something or they won't learn. Smacking Congress with a rolled up ballot comes to mind.
Have gnu, will travel.
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
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
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)
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
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.
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
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.
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
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.
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
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.