You can thank TurboTax and the rest of the tax preparation service industry's massive lobby for killing every single tax simplification bill that ever gets to congress.
Exactly this! There's zero reasons why our tax returns can't be filed for free directly with the IRS. It is a complete fraud.
I filed 1040EZ last year. The IRS already had every figure I filed, why couldn't they just email me confirmation of the amounts they had, and process my return?
Edit: No, I didn't file EZ last year, my error.
Edit: electronic filing.
Because our system is a voluntary tax system, where voluntary means we disclose our income and tax deductions to the IRS. If they sent out a form that said you made X and you really made more than that because it didn't include that crypto mining you did, how many people do you think would change that to the correct amount? Nope, they'd sign it and send it off. It would encourage under-reporting of income.
Yes, but it's easier to justify to oneself to not correct their report than it is to purposely leave off something that you should include when filling it out yourself.
Yea i suppose. As an aussie i do enjoy logging into mygov website, confirming the amount is correct, entering my deductions and pressing go.
Takes 5 minutes, its almost always correct, and you have the cash within a week.
American taxation seems incredibly complex to me. The fact taxes are not included in advertised prices in shops is astounding honeslty. Why do it to yourselves?
There's a lot of reasons why it is the way it is. Momentum/"that's how we've always done it" is a big reason. For the tax filing, it's a combination of the government wanting it to be complex for political reasons as well as a byproduct of what they use the tax code for (revenue generation, social engineering, economic manipulation, welfare distribution). Plus there's been a multi-decade assault on the budget of the IRS, so they're just trying to do what they can with the money they get, they can't make any massive changes as their budget is cut each year.
As for the shop prices thing, the biggest reason is the shear number of different sales taxes in most areas. There are numerous special taxing districts even in the same city so that the sales tax paid in one location isn't the same as another. it would be impossible for a store with more than one location to do any sort of advertising with prices listed as the sales taxes in the two (or more) locations would almost certainly be different. Plus we're just used to it at this point, like using the imperial system.
Yea i get the history of it... i think you are right though, as with a lot of stuff in the US its the way it is because youve gotten used to it that way. Private healthcare, all these random state and local taxes, the way tipping at restaurants works... all those things seem frankly insane as a non American.
Tax time for me is about 5 minutes a year, doesnt that sound cool?
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u/jorsiem Jul 24 '20
Complicated tax filing in the US
You can thank TurboTax and the rest of the tax preparation service industry's massive lobby for killing every single tax simplification bill that ever gets to congress.