In the country where you don’t know what you ll end up paying unless you go to the counter, because the taxes are not included, its only “logical” to not have your taxes deducted from your payslio because reasons
I’m not sure what country you’re talking about, but I assume the U.S. We do have taxes deducted from payroll, and you fill out a form telling the employer (and the IRS) what amount to deduct based on estimated income, family size, and a couple of other factors. Then in April we have to file our official tax form declaring actual income, and if we owe less than what was deducted from our paychecks we receive that back as a refund, but if we underestimated we have to pay whatever taxes are remaining. The reason that filing taxes is so complicated is the sheer volume of deductions, exemptions, credits, etc that have been piled on top of the tax code over the years (plus lobbying by the tax prep industry). It’s a stupid system, but it’s not as stupid as some people seem to be assuming in this thread. If you set up your withholding right, you shouldn’t ever owe taxes when it’s time to file.
Now, if you’re self-employed or a contractor (and considered self-employed) the whole thing kind of falls apart and it’s a lot easier to wind up owning a bunch of money. Like I said, it is a stupid system, just not quite as crazy as some people seem to be assuming.
I can’t agree with this enough, though I think part of the problem is that it isn’t what’s easy to complete your W-4 accurately, there is an entire worksheet to use if you file jointly that is sorta difficult to do well, especially if both people make fairly different amounts. If you just choose the basic withholding it’s very likely the bigger breadwinner isn’t withholding enough and you’ll end up owing about what the comic shows (at least that is my experience, as well as some friends).
I think the real problem in the US is that everyone is left to do their tax paperwork from scratch every year when the IRS could send you a personalized return prefilled that you then claim the deductions and credits you’re due and account for any descrpenices (which sure, is what your W-2 is supposed to be, but it isn’t really that, you still need to use the worksheets on the 1040 or pay someone/some software to do it for you; a prefilled 1040 would be a way better system).
It also doesn’t account for the huge variations in state taxes. Many states have income taxes, some are reciprocal with nearby states and others aren’t, the deductions and credits and even what is taxable is all different. The whole thing is a mess. Then lord help you if you live in a state with local income taxes or one where your local taxes are different than school taxes(like PA) and the whole thing is a half day exercise in frustration to complete and you’re still left wondering if you did it right.
If you set up your withholding right, you shouldn’t ever owe taxes when it’s time to file.
Thing is, here in Germany you don’t even get to make the mistake of setting up your withholdings wrong if you’re a regular employee. I don’t think it’s even possible to end up owing the state money if you’re not self-employed or have considerable capital investments (which is rare for regular employees, which is probably its own issue …).
In the country where you don’t know what you ll end up paying unless you go to the counter, because the taxes are not included, its only “logical” to not have your taxes deducted from your payslio because reasons
I ll never understand this shit, smh
I’m not sure what country you’re talking about, but I assume the U.S. We do have taxes deducted from payroll, and you fill out a form telling the employer (and the IRS) what amount to deduct based on estimated income, family size, and a couple of other factors. Then in April we have to file our official tax form declaring actual income, and if we owe less than what was deducted from our paychecks we receive that back as a refund, but if we underestimated we have to pay whatever taxes are remaining. The reason that filing taxes is so complicated is the sheer volume of deductions, exemptions, credits, etc that have been piled on top of the tax code over the years (plus lobbying by the tax prep industry). It’s a stupid system, but it’s not as stupid as some people seem to be assuming in this thread. If you set up your withholding right, you shouldn’t ever owe taxes when it’s time to file.
Now, if you’re self-employed or a contractor (and considered self-employed) the whole thing kind of falls apart and it’s a lot easier to wind up owning a bunch of money. Like I said, it is a stupid system, just not quite as crazy as some people seem to be assuming.
I can’t agree with this enough, though I think part of the problem is that it isn’t what’s easy to complete your W-4 accurately, there is an entire worksheet to use if you file jointly that is sorta difficult to do well, especially if both people make fairly different amounts. If you just choose the basic withholding it’s very likely the bigger breadwinner isn’t withholding enough and you’ll end up owing about what the comic shows (at least that is my experience, as well as some friends).
I think the real problem in the US is that everyone is left to do their tax paperwork from scratch every year when the IRS could send you a personalized return prefilled that you then claim the deductions and credits you’re due and account for any descrpenices (which sure, is what your W-2 is supposed to be, but it isn’t really that, you still need to use the worksheets on the 1040 or pay someone/some software to do it for you; a prefilled 1040 would be a way better system).
It also doesn’t account for the huge variations in state taxes. Many states have income taxes, some are reciprocal with nearby states and others aren’t, the deductions and credits and even what is taxable is all different. The whole thing is a mess. Then lord help you if you live in a state with local income taxes or one where your local taxes are different than school taxes(like PA) and the whole thing is a half day exercise in frustration to complete and you’re still left wondering if you did it right.
Thing is, here in Germany you don’t even get to make the mistake of setting up your withholdings wrong if you’re a regular employee. I don’t think it’s even possible to end up owing the state money if you’re not self-employed or have considerable capital investments (which is rare for regular employees, which is probably its own issue …).