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I appreciated this description of the difference between American and Swedish tax preparation by some who files both: Our US federal and state forms tax forms

by nkurz 11y ago

I appreciated this description of the difference between American and Swedish tax preparation by some who files both: Our US federal and state forms tax forms were more than 30 pages long last year, downloaded completely blank. During the two weeks we'll spend in Wisconsin this summer, our main job will be to get our taxes done. I'll wade through stacks of bank and credit card records line by line, documenting all professional income beyond our wages and scanning for every possible business or charitable deduction. Once this is done, we — like the majority of US taxpayers — will hire a tax professional who charges us $500 to review and co-sign our work. Tax-preparation services cost American taxpayers more than $32 billion per year. My wife, Betty, and I each have a PhD, but that's not enough to understand IRS instructions. Finally, with a great sigh of relief, our marriage still intact, we'll sign the forms and send them to the IRS. Of course, despite our great efforts, we don't know whether the IRS is going to be happy or not. We might get audited and have to dig up all this stuff again, because the government has three years to check and revise our returns. In Sweden, the four-page tax form comes in the mail already filled out. On a Saturday morning, Betty and I take our coffee to the couch and review the forms. Seeing they look reasonable, as they always do, we "sign" with a text from our phones. In 15 minutes we are done. We don't have to hire a tax consultant, and we avoid fights about whether a print cartridge bought at the drugstore is a business expense or not. http://www.vox.com/2016/4/8/11380356/swedish-taxes-love http://www.vox.com/2016/4/8/11380356/swedish-taxes-love

SilasX 11y ago
In fairness, that's a lot of information that Americans would consider private, going out through the mail in clearly marked envelopes. They can only be so casual about it in Sweden because they also have the social practice of being less secretive about how much they make. With that said, if we could nail down the authentication process, we could do here (and should). It wouldn't improve everyone's situation -- e.g. if you have a lot of income from hard-to-track sources -- but for most people it would be a godsend.
- tormeh 11y ago
  Alternatively, you could do it over the internet. Not totally unprecedented that ;) As a Norwegian, I think sending a text is a little too much work. Here, silence is a confirmation in itself. That said, if you have foreign bank accounts or own foreign shares then you still have to do your taxes here too. I think they should get an information sharing agreement with other governments in place to get rid of that. Should be doable within the EU at least.
- icebraining 11y ago
  Don't you have to submit them by mail anyway? By the way, in Portugal we download a cross-platform Java app that fetches the data over HTTPS and lets you fix it (if needed) and submit. Of course, that has its own problems, so paper submissions are still allowed.
  - cortesoft 11y ago
    Most people file online these days, and no forms are sent. However, many people still send in their forms by mail.
- cortesoft 11y ago
  W-2s are usually sent in the mail currently, which have all the stuff you would want to keep private. I have never heard anyone complain that W-2s in the mail are dangerous. In fact, what extra information would be on this pre-filled form that isn't already being sent via mail? Bank statements, retirement statements, pretty much all financial info is sent in the mail every day.
  - enraged_camel 11y ago
    >>W-2s are usually sent in the mail currently, which have all the stuff you would want to keep private. I have never heard anyone complain that W-2s in the mail are dangerous. That's because opening someone else's mail is a federal felony. https://www.law.cornell.edu/uscode/text/18/1708 https://www.law.cornell.edu/uscode/text/18/1708
Spooky23 11y ago
I'm not a fan of income tax, but this is a bizarre quote. I don't think that the Swedes track his ink consumption -- nobody forced the guy to deduct his print cartridge expenses. I have a reasonably complex return. I think it's like 10 pages long if printed. I pay about $30 for software and spend 2-3 hours, unless I've had a year with an unusual volume of capital gains/losses or some weird delay in getting partnership forms.
- sliverstorm 11y ago
  Presumably the idea is Swedish taxes are simpler, but also reasonably fair, such that how many ink cartridges you bought doesn't matter. Like itemizing vs the standard deduction in the USA.
  - rayiner 11y ago
    Is it fair? If I'm running a business, money I spend on consumables is not income--it's a cost of generating revenue. Why shouldn't I be able to deduct it?
    - sliverstorm 11y ago
      Perhaps your tax system gives you a standard deduction for your business. Perhaps it scales with the size of the business. Who knows, but itemizing isn't the only way.
    - TheCoelacanth 11y ago
      But the whole concept of business expenses being deductible is just another set of special cases in the tax code. Why does a business not have to pay taxes on the money that it spends to maintain its existence but a person does? Why is one way for an individual person to generate income a business but another way for an individual person to generate income not a business?
      - harryh 11y ago
        Taxing revenues instead of profits would privilege high margin businesses over low margin ones which would implicitly mean that customers would pay a much higher tax rate on their groceries than on an iPhone. Literally no one thinks that would be a good idea.
ubernostrum 11y ago
To be completely fair, most Americans can fill out either the 1040A or 1040EZ, which are short (the 1040A is two pages, the 1040EZ is one page). And while they don't come pre-filled, these forms are extremely simple ("look at the form your employer gave you; fill in the value from this box"-type instructions). The complexity doesn't kick in unless you hit higher income brackets, need to declare income from a business you run, or want to itemize rather than take the standard deduction.
- matt_wulfeck 11y ago
  With Health care requirements even that is becoming harder. Besides, if it's so easy why doesn't the government just do it automatically for you?
  - ubernostrum 11y ago
    The usual explanation cited is lobbying by tax-preparation companies to prevent moves which would cut their business. Also, on the short form there's just a box you check to say "I had health insurance all year".
westward 11y ago
Ugh. What kind of business person waits until their personal taxes are due to find their expenses? This should be done quarterly if not monthly. Use a separate account for business expenses. Hire a bookkeeper.

by nkurz 11y ago

SilasX 11y ago

In fairness, that's a lot of information that Americans would consider private, going out through the mail in clearly marked envelopes. They can only be so casual about it in Sweden because they also have the social practice of being less secretive about how much they make. With that said, if we could nail down the authentication process, we could do here (and should). It wouldn't improve everyone's situation -- e.g. if you have a lot of income from hard-to-track sources -- but for most people it would be a godsend.

tormeh 11y ago
Alternatively, you could do it over the internet. Not totally unprecedented that ;) As a Norwegian, I think sending a text is a little too much work. Here, silence is a confirmation in itself. That said, if you have foreign bank accounts or own foreign shares then you still have to do your taxes here too. I think they should get an information sharing agreement with other governments in place to get rid of that. Should be doable within the EU at least.
icebraining 11y ago
Don't you have to submit them by mail anyway? By the way, in Portugal we download a cross-platform Java app that fetches the data over HTTPS and lets you fix it (if needed) and submit. Of course, that has its own problems, so paper submissions are still allowed.
- cortesoft 11y ago
  Most people file online these days, and no forms are sent. However, many people still send in their forms by mail.
cortesoft 11y ago
W-2s are usually sent in the mail currently, which have all the stuff you would want to keep private. I have never heard anyone complain that W-2s in the mail are dangerous. In fact, what extra information would be on this pre-filled form that isn't already being sent via mail? Bank statements, retirement statements, pretty much all financial info is sent in the mail every day.
- enraged_camel 11y ago
  >>W-2s are usually sent in the mail currently, which have all the stuff you would want to keep private. I have never heard anyone complain that W-2s in the mail are dangerous. That's because opening someone else's mail is a federal felony. https://www.law.cornell.edu/uscode/text/18/1708 https://www.law.cornell.edu/uscode/text/18/1708

Spooky23 11y ago

I'm not a fan of income tax, but this is a bizarre quote. I don't think that the Swedes track his ink consumption -- nobody forced the guy to deduct his print cartridge expenses. I have a reasonably complex return. I think it's like 10 pages long if printed. I pay about $30 for software and spend 2-3 hours, unless I've had a year with an unusual volume of capital gains/losses or some weird delay in getting partnership forms.

sliverstorm 11y ago
Presumably the idea is Swedish taxes are simpler, but also reasonably fair, such that how many ink cartridges you bought doesn't matter. Like itemizing vs the standard deduction in the USA.
- rayiner 11y ago
  Is it fair? If I'm running a business, money I spend on consumables is not income--it's a cost of generating revenue. Why shouldn't I be able to deduct it?
  - sliverstorm 11y ago
    Perhaps your tax system gives you a standard deduction for your business. Perhaps it scales with the size of the business. Who knows, but itemizing isn't the only way.
  - TheCoelacanth 11y ago
    But the whole concept of business expenses being deductible is just another set of special cases in the tax code. Why does a business not have to pay taxes on the money that it spends to maintain its existence but a person does? Why is one way for an individual person to generate income a business but another way for an individual person to generate income not a business?
    - harryh 11y ago
      Taxing revenues instead of profits would privilege high margin businesses over low margin ones which would implicitly mean that customers would pay a much higher tax rate on their groceries than on an iPhone. Literally no one thinks that would be a good idea.

ubernostrum 11y ago

To be completely fair, most Americans can fill out either the 1040A or 1040EZ, which are short (the 1040A is two pages, the 1040EZ is one page). And while they don't come pre-filled, these forms are extremely simple ("look at the form your employer gave you; fill in the value from this box"-type instructions). The complexity doesn't kick in unless you hit higher income brackets, need to declare income from a business you run, or want to itemize rather than take the standard deduction.

matt_wulfeck 11y ago
With Health care requirements even that is becoming harder. Besides, if it's so easy why doesn't the government just do it automatically for you?
- ubernostrum 11y ago
  The usual explanation cited is lobbying by tax-preparation companies to prevent moves which would cut their business. Also, on the short form there's just a box you check to say "I had health insurance all year".

westward 11y ago

Ugh. What kind of business person waits until their personal taxes are due to find their expenses? This should be done quarterly if not monthly. Use a separate account for business expenses. Hire a bookkeeper.