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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.
Suck it tax man, Accept my bitcoins!
Do not look at laser with remaining good eye.
The majority of people in the UK who work for an employer (rather than self-employed), and don't have other income to declare (e.g. part time self-employed in their own hobby business, renting out a property, or rich enough to be generating significant income from investments or savings) don't fill in tax returns, it is managed by their employer through Pay-As-You-Earn. As wikipedia says "because the tax code reflects other income (including the state pension), the PAYE system typically results in the correct amount of tax being paid on all the income of a taxpayer, making a tax return redundant".
Let the flamewar begin :-)
I like the UK system - if you're an employee and you're happy with the tax your employer has withheld on your behalf, you don't have to do anything. You get a statement at the end of the year telling you how much you've been paid and how much tax has been withheld - if you think they've got it wrong, or you want to claim deductions, you file a tax return saying so.
Slashdot - News for Nerds, Stuff that Matters, in ISO-8859-1 Has just realised that beta makes this signature redundant
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.
"Tax returns and their computations are merely a simple mathematical puzzle, which I easily solve."
None of the operations are very complex (add, subtract, multiply, divide), but knowing which numbers to perform those computations on, is sometimes far from simple. Get some K-1 income at some point, and see if you think taxes are still a "simple" puzzle.
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.
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.