God, I would hate to have to work out my taxes every year laughs in British
Hey, some of us do have to do taxes, but you pretty much follow a questionnaire on the gov.uk website then fill out some numbers from paperwork you’ll already have (P60, payslips, etc). I had to whip out the calculator once to add up 12 numbers for my student loan.
Could probably do it in under an hour if you’re not doing anything unusual.
The American system sounds very much not that.
For many Americans it’s actually pretty simple as long as they’re working with a standard W-2 (form you get from your employer with the year’s wages and taxes and stuff filled out). Many tax prep services will even import these numbers automatically and all you have to do is click through the questions and optional things like if you want to donate your returns to anything or pay estimated taxes for the next year - mostly stuff that most people aren’t concerned with anyway.
Taxes here start getting complicated when you are an independent contractor (you’re responsible for holding out taxes from your income since you don’t have an employer to do it for you) and/or have non-standard sources of income like stocks, shares, real estate holdings, etc. which the IRS may or may not have information on, thus why you need to provide the info.
Most of what has made calculating taxes and paying/getting returns a pain in the ass is tax prep companies like TurboTax lobbying to make and keep the tax filing process a confusing one, with the goal of steering you into paying for the non-free filing options.
I was shocked how easy it was to do my taxes when I was poor (back before the online services even). Just went to the library and spent half an hour filling out a 1040EZ form and dropping it in a mailbox.
It’s harder now that I actually have contributions to retirement, back when I owned a house, make considerably more, have two kids and a wife that’s going to school, etc. But still took me less than an hour.
And I would argue that if it takes you more than an hour to do taxes, you both should and can afford someone to do taxes for you.
Even then buying and selling stocks, having a 401k, IRA, etc. doesn’t even make it complicated. You just have to fill out a 1099-B/DIV/INT and then list your contributions to your retirement accounts.
I don’t know why people pretend it’s so hard. You spend 30 minutes every year answering a few questions and punching numbers into boxes from a few documents that are sent to you by your broker/bank/employer. It’s also only $15 at FreeTaxUSA.
Opening the accounts you report to the IRS is arguably more difficult than filing them on your taxes.
Oh interesting yeah, so doesn’t actually sound too complex for most people then.
I’m a little confused about the last part, what are the main differences between paid and free services if it’s as simple as you describe with the W-2 form?
You guys have to fill in numbers? The Australian Tax Office pre-fills your tax return with the data they get from your bank and employer, so most people can do it in 5 minutes by clicking next a bunch of times.
To be fair the vast majority have it fully automated PAYE and don’t even have to file. Though it’s a good point, I’m pretty sure the tax forms you get the numbers from are a standard format, I wonder why they haven’t got something like that in place here.
At the very least you should be able to upload the PDFs from your work payroll as the end of year forms and it could pull the details from those
