What they don't know is your income from sources like rental income or crypto. They also don't know deductions you are going to claim. In this case you will have to provide the details. Still free to lodge your returns online.
The U.S is unique in forcing its citizens to waste countless hours and pay hundreds/thousands of dollars every year doing the useless unnecessary work of "filing taxes". Why is the system still this backwards? Either plain ignorance of there being a superior alternative, or a broken political system that can't get anything done. My guess is it's a combination of both.
I’m a South African citizen, I get an SMS that a pre-filled-in tax return is available online.
I can then log in to their online portal and accept it or amend it and submit it electronically.
Currently I can usually just accept and submit it.
Some years I might need to add or tweak income and expenses, but broadly speaking they are pretty correct.
They have all the income and benefit details from standard corporate employers, expense and contribution info from medical aids (something like medical insurance, but a bit more sane as far as I can tell), investment and banking contributions from financial service providers, etc.
You can opt for extra deductions which require extra paperwork from your side. And they don’t always have income info from side hustles or correct expense info from “unusual” arrangements between you and your spouse. Sometimes your $BIGCORP’s finance department can declare your benefits incorrectly which needs fixing.
But for most middle-class income earners I suspect they can just log in and click accept.
You can pay money and use a tax consultant to see if they can navigate the current rules for a better result, but unless you have a complicated setup you don’t need to.
Intuit lobbying hard to keep tax rules complex.
(copy and pasted from another comment)
If you are not getting a VAT refund then you are paying VAT and it is in your interest that everyone does, so most consumers would select the box. The transfer is recorded, consumers would be complicit in the fraud if they didn't tick the box and that's enough excuse for both sides to want to play ball.
cries in German
If you do end up filing your taxes, you can access the prefilled tax statements. Software to do that is free and easy. If you want software advising you on how to get a bigger refund, you'll have to pay maybe $10-20, though the $5 software from Aldi works fine for me.
It may be unusual, but it's certainly not unique; I have to fill in a tax-return every year, because I receive rental income. Anyone in the UK that receives income that isn't taxed at source by their employer has to complete one.
The last one I completed was 21 pages long, with notes for each page; a lot of the time I spent was scrabbling through my filing cabinet searching for my evidence.
That rental income plus my state pension and bank interest are the only taxable income I receive.
At one time I was a company director, and had to fill in personal tax returns. I folded the company, and returned to salaried employment, taxed at source; it took me a decade to get the tax authorities to stop sending me tax return forms that I was required by law to complete.
The first £1,000 is tax free (presumably the cost of admin makes it easier to let that go).
And up to £2,500 you just have to phone / email HMRC.
Of course, TurboTax/Intuit also lobbies to keep taxes more difficult to protect their profits.
https://www.washingtonpost.com/blogs/post-partisan/wp/2015/0...
Until or unless everything is centralized and cash ceases to exist, I don't know how they'd really do it. In South Korea do waiters live on tips? Because in the US, almost all money made in the restaurant service industry comes from unrecorded cash tips; the actual wages are extremely low. The restaurant will attempt to estimate their workers tips and cover the taxes out of the fixed wages, but... this doesn't even get into all the other cash industries like stripping or moonlighting as a dominatrix. The US's tax attitude seems to be: You're on your honor, and most of the time we won't catch you, but not even Jesus can help if we do.
I should be a pretty typical middle-class example. Two salaries (me + spouse), a mortgage, limited other deductions. Yet every year I have to wait for various forms that the government already has, enter the values on paper or pay for tax software, hope I don’t fat finger a value, and wait 7-10 years for an audit. Heck, since Trump increased the standard deduction, I’ll probably be taking that soon (mortgage interest is near that threshold now), but still can’t just click a button at irs.gov that says “yup, that’s right, here’s my bank info for refund/payment”
Neither. There is awareness of the alternatives, and the political system can get things done for it's real constituents. The problem is a malevolent political system that primarily serves a class whose interests are opposed to the mass of the citizenry, to wit, a narrow capitalist elite.
(People will point to the tax prep industry, it's lobbying, etc., and that is part of the problem; an bigger part, however, is the political faction favoring lower taxes in general for the elites that likes to maximize the perceived pain of taxes for the masses to generate support for elite-favoring tax cuts; they are adamantly opposed to procedural simplification that minimizes the pain they leverage.)
At the beginning of the year, you get a bill for that year based on what they think you will owe. This bill is due on October 31, i.e. you need to pay your estimated income tax before you have earned all that income. This is especially strange because most people will get a 13th month salary at the end of October (your annual salary is split into 13 months, the extra comes in time for Christms presents?). You are expected to save adequately to be able by the end of October.
Banking secrecy is not dead in Switzerland. There are no longer anonymous accounts, and banks share information with foreign governments. However, there is banking secrecy between the banks and the government. On the other hand, we pay a wealth tax each year (it's small), so you need to declare each account and how much you had in it on December 31.
To create an equal playing field between house owners and renters, house owners pay an imputed rent cost for how much they would have paid in rent for their house. This is added to their income before taxes are calculated. In my case, this means my assessed income is around 25k higher than it otherwise would be.
There is no automatic form filling in my state, but there is free tax software (Java app which runs everywhere), and it is pretty easy to use. If you have questions, the local tax office will nicely respond via "secure email" in 1-2 days.
Taxes are very progressive and family friendly. With 4 kids and one income we pay 6.5% combined local/state/federal on income of around 120k (plus imputed rent).
There are no property taxes. For the wealth tax, most people who own houses never pay off their mortgages. They will typically have a mortgage for 50% of the house value (which can be quite high, a typical house where I live is between 800k and 1000k, and more in bigger cities). The interest can be deducted, and the mortgage amount from the wealth tax.
wait, I thought this only applied to US citizens, not Green Card holders
