As in, does a normal person who is an employee have to 'file taxes'?
I was just watching a thing about TurboTax ending free tax filing, through lobbying, forcing people to use their system.
I seem to see a lot more about 'filing taxes' in the US than I do where I'm from (UK). So does everyone who has a job have to 'file taxes' in the US?
In the UK it's only if you have a business or additional income over a set amount (such as rent).
36 comments
There are some exceptions but pretty much anyone with a job has to file taxes.
Yes we have to do it. We can hire someone else to do it too. Most countries just have the government do it for the people. It’s stupid in the US.
Yes. If you don’t you might get away with it for a while. But eventually they will get you.
I have done my taxes since I was 15 making $8.25
Filing taxes can vary. It’s quite simple for me, I’m in a single income household and there is a calculator online from the IRS. We add our income and any deductions, check a few boxes for demographic data, and pay electronically.
My grandparents have assets, investments, and multiple sources of income. They have an accountant.
Yeah. If you’re just working a job and don’t have kids, it’s pretty easy. If you own a business, have kids, or have a lot of income, it gets trickier.
Essentially, anyone making around $15,000 or more has to file taxes. There are different thresholds for couples, retired people, etc.
Yes, most people fill out an incredibly simple form online once a year which imports their income from their employer, prompts for any special circumstances the government wouldn’t know about (charitable donations, childcare expenses, mortgage interest) and then tells you how much of a refund you’ll be receiving. It takes like 30 minutes maximum annually.
For people who have complicated stock sales, own their own business or rental property, etc, it can be much more complicated, and you might end up owing additional money.
Yes. Pretty much everyone has to file. For a lot of people, it’s very easy – they have income from a single source and use the standard deduction, so it’s simple arithmetic. For others it can be more complicated, but overall it’s not a huge deal for most people. It’s still a backwards system though.
The United States has several large businesses that lobby (also known as legally bribing) lawmakers to vote no on any proposal that would have the IRS calculate your taxes for you and tell you how much you owe.
The IRS does actually know how much you owe… But they aren’t going to tell you because billion dollar businesses make their money from having low and middle income earners needing help navigating the intentionally obtuse tax code.
Yes. You guys do the same thing in the UK.
Pretty much anyone with a job has to do their taxes.
For most cases it is pretty simple, and you can hire a tax preparer for not too much money (like- they set up booths at Walmart to help you…)
Or if it is complicated, you can hire an accountant to prepare your taxes, and that costs more.
Or you can buy software, like TurboTax to walk you through it yourself.
It used to take me about 30 minutes to do my taxes on my own. Now it takes pretty much a full day, and I need to run it all through various scenarios to see what is the best approach, standard deduction, or itemize; married and file jointly or married and file seperately, etc.
Yes, unfortunately. It’s stupid, because any organization that sends you money – jobs, banks, etc. already send that information to the government. But there are certain things you pay for (like charities, work expenses, children, healthcare) that can be deducted from your taxes, so you can get a return sometimes.
Yes and it’s incredibly simple. I learned in an afternoon at the local library when I was about 13. It gets slightly (slightly) more complicated when you start having investments and whatnot.
How much work is it? Where I’m from all the data is automatically sent to the IRS so the most common scenario is that you just go to the app, confirm that the numbers look ok and sign. If you have deductions it’s usually easy to add. If you run your own business or something like that it’s a bit more work
The federal government gives incentives and tax deductions. They don’t know what you qualify for, so you have to tell them.
Installing solar panels on your house might have a tax incentive. Buying an electric vehicle could have a tax deduction, for example.
If you don’t qualify for anything, you pay the full amount. If you don’t make enough, you get some money back.
Most Americans work for an employer that pays taxes based on their wages and also withholds taxes that are due by the employee. The employer will file this information with the government and send the employee a summary of this information. These are part of the data that we use to determine how much we owe in yearly income taxes. Submitting this paperwork is the “doing your taxes” part. Officially it is called a “tax return.” Sometimes we have not had enough withheld during the year and must submit a balance payment. Sometimes we have overpaid and are due a “tax refund.” Nobody is forced to use TurboTax. You can get the forms for free and fill them out yourself.
Unfortunately yes. Whats even worse is we have to calculate or have someone calculate how much we owe the govt, and the govt already knows how much we owe but leaves it up to us to do it right, or else we get fined.
Each person with income above a certain threshold has to file a tax return, and it’s up to each of us to prepare it or have it prepared by someone.
Yes. As an employee, your company withholds your income taxes with each pay period and sends them to the government. Once a year (with some caveats), you basically true up your withholdings with the government and either submit any outstanding money not withheld for some reason, or request a reimbursement for anything you may have overpaid.
The especially annoying thing is that the government doesn’t send you an amount and then you either owe or expect a refund based on their accounting. Instead, you’re expected to do your own accounting and submit your number to the government. And if your math on your audit was wrong, you’ve broken the law and will now have to pay a penalty.
The Turbo Tax of it all is because moneyed interests have now decided that in addition to that back-asswards way of paying and auditing, everyone should also have to pay to do said annual auditing. Pre internet, there was a paper form you’d get from your local library or post office, manually do the math with a calculator, and write everything on there by hand and mail it in. But now most people e-file, and we’ve apparently decided that should cost money. Even though the paper forms aren’t even available anymore AFAIK.
Yes unless you have no income.
everyone who earns more than pocket change does yes
Yup. We all gotta do it. Even the president of the United States has to cheat on his taxes by April 15th.
Wow, lots of replies very quickly.
Too many to thank individually (but all upvoted). Thanks folks!
There’s a legal duty to file your taxes, if you have income.
That being said, it’s normally pretty a pretty straightforward task for most Americans. Due to what is called the “standard deduction”, if you make below a certain income, you have no taxes due at all, even if you didn’t have taxes withheld from your salary. Normally, tax income is withheld from paychecks at employers and forwarded, along with employment information, to the IRS. Most people don’t have to pay anything, they’re simply filing a statement about how much they’ve earned, and how much is due back to them as a refund.
There had been suggestions on ways to streamline the process, to the point that most Americans wouldn’t need to file (the IRS generally knows how much people owe or are due, so they’d just send a notice of what your tax bill is, and if you disagreed you could file taxes). . .but heavy lobbying from the tax preparation industry killed those proposals.
The entire tax filing system exists at this point to support the tax filing industry.
Yes.
The US tax system has been made extremely complicated by decades of deductions & credits – it’s essentially an end-around the Constitution’s limits on federal power, that while the government may not be able to ban or promote something they can give you a tax-break to influence your behavior indirectly…. It’s also often more politically viable to ‘give someone a tax break’ than it is to ‘give them free money’….
The government has no idea which ‘desirable behaviors’ you may have engaged in (like buying an electric car, going to college, paying for childcare – it’s a really long list) and thus which breaks you qualify for…
Beyond that, *ALL* income is taxable, and the government only knows about the income you made from ‘regular’ jobs (vs renting out a spare room, or selling stuff on eBay, or any number of cash-only side gigs)….
This means that everyone has to file taxes.
There is a simplified form (1040EZ) for those who don’t qualify for lots of deductions & don’t have multiple sources of income….
If you’re a very simple person – 1 job, all income from that source, nothing exceptional – taxes take maybe 10 minutes.
A typical middle class person with some investments will spend more time. I’m not sure how this could be avoided in other countries (other than all being merely wage workers).
I have 1 job, about 8 different investment accounts that have modest taxable returns, a rental property. I then have deductions against my earnings – mortgage interest, charitable deductions, contributions to my kid’s college fund, wife’s retirement. These are sometimes decisions we make literally while doing taxes – how much do we have available to put in these accounts.
My question for you would be – how do you *not* do taxes in this middle class scenario?
It takes 20-60 minutes once a year for most people to handle. It isn’t that big of a deal
Stuff like the Earned Income Tax Credit has been credited as reducing poverty, and has been expanded under both Republican and Democratic administrations.
Everyone has to file taxes. Even a little actor kid, and even that old lady.
Not if you don’t make enough money, or if I’m wrong, I’m fucked and the IRS is coming to get me RIGHT NOW
If you work or are over 18 you should be filing, it’s not super complicated though until/unless you have non-standard stuff going on. Even having a house, school loans, and retirement funds through work don’t make it very hard.
Some things that it harder are non-standard investments that most people don’t have. My kids have to file because their grandparents opened Illinois Uniform Transfers to Minors Act (UTMA) accounts for them and they have to pay the “kiddie tax” on the income from those accounts. Before that, we’ve basically only ever used the EZ (easy, get it?) form that covers most things that most people have to worry about.
Unless you’re really determined to do it on paper, it’s pretty easy to open an account with one of the services and import your data and answer a few questions.
Yes, we sure do.
Yes, I have to file taxes.
Yep. And the lobbying of Intuit to kill free filing is just the latest bit of corporate welfare: instead of taxing companies, we give them handouts by forcing Americans to use their shitty software to perform an annual administrative chore.
Important context I haven’t seen specifically mentioned: when you start working most jobs you fill out a simple form to guess the percentage they should withhomd from your income and set aside for taxes. When you “do your taxes,” you’re making sure the guess was right. This adds complication to enforcement, because most people are already paying what they need to, and if they don’t do their taxes to check, the government isnt missing any money (and in fact may be saving on something they would otherwise be giving back).
Some people “get away with” not doing them because they’re essentially giving up their refunds every year.
English immigrant here: yes, and it sucks and is tedious and TurboTax suck for lobbying the government so they can provide a solution for a problem they create. Fortunately, my American wife does mine for me.