Just tell me what I owe or what my refund is (or since I use a standard deduction, just take out the right amount to begin with) and allow me to contest it if I disagree.
there is a few exceptions for this rule like self employed and individual contractors and sometimes if you work for a very small business however they are exceptions, for almost everyone else it should just be a bill that can be contested if there is issues.
It’s tricky to take out the right amount even with just the standard deduction because of how tax brackets work, as they need to know all the income you have earned for the year up until that point along with any taxes paid in (all jobs, interest on a bank account, etc) and then they need to know how much money one will make in the current year (will they get a pay bump, put in some over time, take unpaid time off?). Or if you are going to have a kid or get married that year.
There are also credits that can be taken with the standard deduction like for tuition or say an EV purchase.
I think they could probably get pretty close with most people. And, I think those tax credits would get reported to the government anyway (otherwise how could they verify it). Regardless that part was more of a wish. Just sending me a bill would be a marked improvement.
I’d argue they get pretty close for most people right now if they have everything setup properly.
And even if credits get reported unless they are reported at the beginning of the year pay check with holding couldn’t be changed.
But yes just sort of auto generating a return with either a refund or bill that someone could choose to dispute or accept would be much easier of a task and I think a reasonable ask.
For the majority of people out there, all their income is going to have digital records. A cash only store still deposits money in a bank, after all. For the people that don’t… chances are their income without a digital footprint isn’t being reported, and is small enough that no one is worried about that in the first place.
If the IRS is being told by a person’s work how much they’re paid, by their bank how much interest they got, by any Etsy-esque services how much they were paid… then the IRS has every bit of information it needs to get automatic withholding correct.
Right now withholding systems default to taking too much money out, because it’s easier for the government to send you money than it is for them to request money from you. It also avoids the headache of most people being hit with surprise IRS bills. The IRS could keep that default, and then as the year goes on it could shift that withholding down until it’s laser close. The negative there is that variability is bad for budgeting too, but with some work they could make it start close enough that it shouldn’t be all that variable.
If the IRS is being told by a person’s work how much they’re paid, by their bank how much interest they got, by any Etsy-esque services how much they were paid… then the IRS has every bit of information it needs to get automatic withholding correct.
Unless you just want to just keep withholding on the marginal tax rate a person is currently in, thus starting your withholding super low in the start of the year and increasing it throughout the year so that come December they have way more withheld per paycheck than in January, it’s not simple.
Future income is unknown, you could maybe design a system a system that assumes you will adjust your withholding amounts especially in the last quarter of the year to either catch up or slow down with holdings to try to best get you close to zero by the end of the year, but even then to be dead on still is a wild bar to clear as that requires that last source of income to know it’s the last income for the year.
You’re also making the implicit and incorrect assumption that this assumption of future income is not already the status quo. It is. The IRS already does this with your automatic withholding. It just does it at a higher level than necessary, due to what I mentioned above. Withholding basically assumes that a person will continue to earn whatever their paycheck was in every future payment period (weekly, semimonthly, whatever).
Your assumptions on how this would be dealt with are not realistic. The outlines of how to implement this not only already exist, they are already used and have been used for decades. All the IRS needs to do is glue together its knowledge of your income sources and lower the withholding amount based on being able to predict an individual’s income far more accurately.
Data on seasonal income is known too, for the record. Consistent trends in income changes with parts of the year are not a surprise to the government agencies that care about it.
Kind of, there are free services and the IRS is working on their free filing website/software. However, the easiest product to use TurboTax is focused on upselling. I believe it’s free for basic taxes but the minute you need to add something like contractor income it’s $120.
Yeah, they also try to upsell you on having a real person look over your taxes and lobby against any form of free tax software.
I hope they get the ease of use right. Part of the reason I still use TurboTax is because it asks questions and walks me through the process. Even though my tax situation is a little complicated I can figure it out with minimal googling.
You are not logged in. However you can subscribe from another Fediverse account, for example Lemmy or Mastodon. To do this, paste the following into the search field of your instance: !technology@lemmy.world
This is a most excellent place for technology news and articles.
English
Just tell me what I owe or what my refund is (or since I use a standard deduction, just take out the right amount to begin with) and allow me to contest it if I disagree.
there is a few exceptions for this rule like self employed and individual contractors and sometimes if you work for a very small business however they are exceptions, for almost everyone else it should just be a bill that can be contested if there is issues.
It’s tricky to take out the right amount even with just the standard deduction because of how tax brackets work, as they need to know all the income you have earned for the year up until that point along with any taxes paid in (all jobs, interest on a bank account, etc) and then they need to know how much money one will make in the current year (will they get a pay bump, put in some over time, take unpaid time off?). Or if you are going to have a kid or get married that year.
There are also credits that can be taken with the standard deduction like for tuition or say an EV purchase.
I think they could probably get pretty close with most people. And, I think those tax credits would get reported to the government anyway (otherwise how could they verify it). Regardless that part was more of a wish. Just sending me a bill would be a marked improvement.
I’d argue they get pretty close for most people right now if they have everything setup properly.
And even if credits get reported unless they are reported at the beginning of the year pay check with holding couldn’t be changed.
But yes just sort of auto generating a return with either a refund or bill that someone could choose to dispute or accept would be much easier of a task and I think a reasonable ask.
For the majority of people out there, all their income is going to have digital records. A cash only store still deposits money in a bank, after all. For the people that don’t… chances are their income without a digital footprint isn’t being reported, and is small enough that no one is worried about that in the first place.
If the IRS is being told by a person’s work how much they’re paid, by their bank how much interest they got, by any Etsy-esque services how much they were paid… then the IRS has every bit of information it needs to get automatic withholding correct.
Right now withholding systems default to taking too much money out, because it’s easier for the government to send you money than it is for them to request money from you. It also avoids the headache of most people being hit with surprise IRS bills. The IRS could keep that default, and then as the year goes on it could shift that withholding down until it’s laser close. The negative there is that variability is bad for budgeting too, but with some work they could make it start close enough that it shouldn’t be all that variable.
Unless you just want to just keep withholding on the marginal tax rate a person is currently in, thus starting your withholding super low in the start of the year and increasing it throughout the year so that come December they have way more withheld per paycheck than in January, it’s not simple.
Future income is unknown, you could maybe design a system a system that assumes you will adjust your withholding amounts especially in the last quarter of the year to either catch up or slow down with holdings to try to best get you close to zero by the end of the year, but even then to be dead on still is a wild bar to clear as that requires that last source of income to know it’s the last income for the year.
You’re also making the implicit and incorrect assumption that this assumption of future income is not already the status quo. It is. The IRS already does this with your automatic withholding. It just does it at a higher level than necessary, due to what I mentioned above. Withholding basically assumes that a person will continue to earn whatever their paycheck was in every future payment period (weekly, semimonthly, whatever).
Your assumptions on how this would be dealt with are not realistic. The outlines of how to implement this not only already exist, they are already used and have been used for decades. All the IRS needs to do is glue together its knowledge of your income sources and lower the withholding amount based on being able to predict an individual’s income far more accurately.
Data on seasonal income is known too, for the record. Consistent trends in income changes with parts of the year are not a surprise to the government agencies that care about it.
deleted by creator
Your post is almost exactly what I was going to write as well.
The government knows how much I make.
They know how much I’ve paid in taxes.
Why the fuck do I have to go through the bullshit of entering all that information that they already know about me? It’s absolutely nonsense.
Fuck Intuit and their political lobbyists who are perpetuating this bullshit of needing to file every year. It should be a 5 minutes process.
Your post is almost exactly what I was going to write as well.
The government knows how much I make.
They know how much I’ve paid in taxes.
Why the fuck do I have to go through the bullshit of entering all that information that they already know about me? It’s absolutely nonsense.
Fuck Intuit and their political lobbyists who are perpetuating this bullshit of needing to file every year. It should be a 5 minutes process.
Crazy how they’re able to do this but the taxpayers still need to ‘prepare’ their taxes themselves. What a fucking joke of a government we have.
deleted by creator
Kind of, there are free services and the IRS is working on their free filing website/software. However, the easiest product to use TurboTax is focused on upselling. I believe it’s free for basic taxes but the minute you need to add something like contractor income it’s $120.
deleted by creator
Yeah, they also try to upsell you on having a real person look over your taxes and lobby against any form of free tax software.
I hope they get the ease of use right. Part of the reason I still use TurboTax is because it asks questions and walks me through the process. Even though my tax situation is a little complicated I can figure it out with minimal googling.
deleted by creator
I’ve used FreeTaxUSA for the last 5 years and it’s very good with very minimal upselling (and they make it very clear when payment is optional).
Yes. It’s terrible for 99% of people. 1% can do the easy return.
Freefilefillableforms.com
Free for everyone, has links to all the necessary forms and literature, etc. Linked by the IRS on their how to file webpage.
You do NOT have to pay a service, despite tax preparation services acting like you have to.
It definitely involves a lot of reading and work, though.
As always, the tradeoff that money buys, as in almost every case, is time.
Once you do it the first time though it’s pretty easy to do it the next time.
Fuck taxes!
Did hell just freeze over?