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Paying taxes.

P

Peter

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I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...

With a single employer (and getting a W-2) it is usually just as simple in the US - one only has to file if they seek a refund or had failed to have enough withheld.
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...

It can be a nightmare if you own stocks, rental property or have a business
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...

I did mine and my wife’s today, took about 30 minutes
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...
With software like Turbo-Tax, Taxes are fairly simple, My own takes less than an hour, or so depending if I sold any stock.
I do my Dad's with several rental properties, and it takes about 4 hours.
For the average person with a single employer and basic things like a mortgage, I would say under an hour.
 
It's easy if your finances are relatively simple.

It's also easy if you do it online and use the same tax software every year. Previous year information is already there and auto-filled in the appropriate spaces.

If your finances are complex and you are not a tax accountant, then let a tax firm do your taxes for a fee. No headaches, but you do need to supply all necessary documents.
 
My finances though massively large are quite complex so I use an accountant. When I retire I will simplify everything and go back to doing it myself
 
Rogue Valley said:
It's easy if your finances are relatively simple.

It's also easy if you do it online and use the same tax software every year. Previous year information is already there and auto-filled in the appropriate spaces.

If your finances are complex and you are not a tax accountant, then let a tax firm do your taxes for a fee. No headaches, but you do need to supply all necessary documents.
Click to expand...

Yeah this
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...

Yes, Yes, Yes, and Yes.
 
Rogue Valley said:
It's easy if your finances are relatively simple.

It's also easy if you do it online and use the same tax software every year. Previous year information is already there and auto-filled in the appropriate spaces.

If your finances are complex and you are not a tax accountant, then let a tax firm do your taxes for a fee. No headaches, but you do need to supply all necessary documents.
Click to expand...
Good point! I forgot to mention, with most of the reoccurring data carried over from earlier years, the bits of data needed for the normal
person is quite small.
 
Boy, reading through this thread, it paints the wrong picture.

1. You do have to collect a bunch of forms and keep track of them - whether it's interest, dividends, kids daycare payments (for kid related deductions), stock transactions, W2 from your employer, health related expenses (if you claim that credit), retirement account contributions / distributions, etc.

2. You do have to enter it all correctly. Some tax software DOES have problems but sure most people will ignore those (won't even know how to find it).

3. You have to know which deductions you qualify for. For example, unless you know amount of your medical expenses (only in some but not other categories) vs your income, you would not know whether that applies to you. Software can ask you about it and you can skip that question, but then you are just overpaying for convenience.

4. State and local taxes (where applicable) have all the same issues

5. Tax planning can be complex if you dig in. E.g. one state allows up to $2k deduction for 529 plan to be tax deductible per beneficiary. So you can setup 20 beneficiaries at $2k each to get a $40k deduction instead and later change beneficiaries to the one you really wanted. All that requires thinking and understanding taxes and planning and various operations to maximize those sorts of deductions.

In short, I'd love to have a simple system like they do in many countries - just auto-deduct stuff from pay and be done with it.
 
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Crovax said:
Wouldn’t that just be the same tax you would pay if you kept the dividends? I keep mine and just enter a 1099 form.
Click to expand...

Yes the same. I buy and sell though
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...

Much depends on whether you itemize. It is a pain for me because I do my business taxes myself first and one of those is rather time consuming for the simple fact of how you report payroll expenses. In my personal taxes I have W-2, K-1, and 1099 income and some deductions I have to provide documentation for, but by the time I get to that point, I can plug into the software, scan the documents as a PDF and be done with it in 15 minutes. The business taxes usually take me a few hours.
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...

The big problem is the growing number of bedwetters, crybabies and domestic terrorists who insist that "all taxation is theft by force".
You can't reason with them, and some of them (not all but a surprising number) are violent.

The other big problem is the fact that we do have a very bloated bureaucracy which could do with better efficiency.

The other big problem is that the wealthiest among us pay little or NO TAX at all...it is the disappearing middle class who shoulder the largest burden.

The other big problem is that a large number of states are takers, they take IN MUCH MORE Federal tax dollars than their residents pay IN.
Other states, known as "donor states" are always hit with the burden of making up the shortfall.
These taker states are always on record as hostile to not only paying taxes but hostile to the donor states. The current president has heightened that to near civil war levels in just there and a half short years.

And the last big problem is the fact that a growing number of working Americans are now stuck in low paying jobs that offer no future and do not put them IN a tax bracket to begin with, and the solution is NOT a flat tax but a more inclusive progressive system where "everyone pays SOMETHING". But in order for that to work, we still must offer better training and education and offer a better variety of jobs.
But still, that said, even the low paid and minimum wagers would then have skin in the game and would be more motivated to do things like VOTING!
 
Peter said:
I live in the UK and have a standard job with an employer so all my taxes are done automatically and I've never had to deal with tax returns or tax forms so I'm curious how much time and effort it takes for Americans to sort out tax?
Do you all have accountants and do you have to keeps receipts and stuff? Is it as stressful as I imagine trying to work out what is and isn't tax exempt and other oddities?
Would you like the US to adopt the UK Pay as you earn system and if not why?
Click to expand...

I'm working on a return right now for a client that has a small business. His wife works a normal job. He has a rental property that he sold and some basic investment stuff. It isn't an overly complicated return but it will take me at least three hours to put together and I do this stuff for a living.

The most complex return I do for anyone takes me nearly a full day just for the data entry. Compiling all the data and checking to be sure it's accurate and complete takes me the better part of a week.

If you work one or two jobs and maybe earn a little interest on your bank account or some dividends on mutual funds then you're return is a breeze and should take you maybe half an hour to put together. Self-employment, rentals, certain investments, income from "pass through" entities and various tax credits can add a LOT of complexity to a tax return. This is kind of why I laugh when people say they want to see Trump's tax return. It would likely take a professional a week to go through it and months to do a respectable examination of it.
 
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