16 ms·

The NTA (National Tax Authority, cited as the Kokuzeicho in the article) doesn't figure out your taxes for you. Your employer does, as one of the (many!) ways i

• feld 10y ago
  $3k??! How is that possible? I get personal and business taxes done for $200
  • patio11 10y ago
    Well it could be that my accountants just totally lucked out and presented a proposal to someone whose motto is Charge More For Professional Services, but it's mostly "I have a number of factors which make writing my tax return complicated", many alluded to here: https://news.ycombinator.com/item?id=10810367 https://news.ycombinator.com/item?id=10810367
  • bemmu 10y ago
    As another data point, I also pay $2k - $3k / year for help to file taxes in Japan. But I also know many people who just do it themselves. My justifications for paying: - We've done the return ourselves once, but it was stressful to worry about not completely understanding everything and making some expensive mistake. - Service in English. - If tax officials ever wanted to ask me something, they would get responses in Japanese from a person who actually knows what they are talking about. - Nice for making sure I get every deduction. - Probably just doing the "blue form" return is already worth the expense because of deduction benefits. I probably wouldn't ever get around to figuring out how to do that. The process in Japan seems reasonable, but seems to me more convoluted than in Finland. I was particularly surprised how you have to pay many different fees which in Finland would have been bundled together. Namely having separate bills coming on varying payment schedules for income tax, municipal tax, entrepreneur tax (5%) and health insurance. This seems inefficient and confusing to me.
    • jacquesm 10y ago
      > I was particularly surprised how you have to pay many different fees which in Finland would have been bundled together. Namely having separate bills coming on varying payment schedules for income tax, municipal tax, entrepreneur tax (5%) and health insurance. This seems inefficient and confusing to me. That's how it is in most countries because they're all different entities collecting.
      • chimeracoder 10y ago
        > That's how it is in most countries because they're all different entities collecting. Exactly. I pay city, state, and federal income tax in the US. My city is about 1.5 times the population of Finland, and that's only one of the three different forms of income tax I have to pay. At least that goes through the state, so it's only two departments, but that's again separate from the federal IRS. And that's just income tax, not other taxes I have to account for and pay as well. The reason it's more complicated in countries like the US, Japan, India, etc. is because they're much, much larger, which requires more complexity to manage - both the size of the government itself and the revenue-collecting departments that need to support it. If I only had to pay taxes to my city's revenue department and there were no state or federal tax in the US, I can guarantee that the process would be a lot smoother for me as well.
        • krzyk 10y ago
          In Poland municipal, state and federal income taxes are paid as a single entry on the tax form. The government then transfers the money to the appropriate lower level of authorities. So I wouldn't say that most countries differentiate like in the states. Maybe it is a Europe - USA difference?
          • uiri 10y ago
            As an additional data point: provincial income taxes in Canada are collected along with federal income taxes by Revenue Canada and then remitted down to the provinces. The sole exception to this being Quebec. Definitely a peculiarity of the US system being less cohesive than some other countries - and also dealing with far more people and jurisdictions.
  • fierarul 10y ago
    It's close to $1.5k in Romania so $3k for a US-Japan tax accountant doesn't seem bad at all actually.
    • 77pt77 10y ago
      Isn't that like much more than 3K USD in the USA if you consider purchasing power in Romania?
      • fierarul 10y ago
        Oh, yes, definitely!
  • edwhitesell 10y ago
    I'm with you here. I never spent more than $600 having a few W2s, some 1099s, the usual interest-bearing accounts, a C corp and a schedule C. Granted, I could have spent a LOT more if I didn't keep track of everything (i.e. needing a bookkeeping service too). Maybe that's where the additional expense came in.
    • syncsynchalt 10y ago
      You seem to be talking about US tax forms while the post you're replying to is talking about Japanese tax prep.
  • blizkreeg 10y ago
    combined $200?? Who's your tax guy? :) I'm being quoted $1K+ for my Corporation taxes.
    • cmurf 10y ago
      1120S? $1500 is a reasonable price once you accept the world of asinine information returns costing this much to prepare and file. For a simple schedule C, $200 is suspiciously cheap but I hear this all the time, even from people with rental property and I'm like - ok whatever good luck with that. If you go to H&R Block for a simple schedule C, of course they do the whole return and it's a charge per return. I think it's about $500-$600 for a 1040 that also includes A, B, C, D, E and SE, last time I had it done. These days I'm just using TurboTax with numbers plugged in from accounting software.
  • dasil003 10y ago
    I paid $2k for US/UK taxes when I moved to London. I had always done it myself up to that point, including freelance Schedule C work, I definitely knew my way around the US tax code. But then I move to the UK which has a different tax year, with a lot of subtleties over where my money was physically located, and what kind of expenses I could claim, and it got crazy complicated crazy fast. Paying $2k probably saved me $10k/year.
  • sokoloff 10y ago
    I pay very close to that for our US taxes. We have to file 5 federal returns and one state return: an MFJ 1040 with supporting schedules (A, C, and D primarily), 2 kiddie returns, 2 gift tax returns, and a state return. Throughout the year, we file quarterly estimated taxes and 4868s. Our total filing packet runs to nearly 100 pages and our annual bill is between $1800 and $2500, depending on the exact complexity, whether we have any amended filings to make, etc. I DIY'd my taxes for many years, and once the kids came and brought the additional complexity (some of which is cyclic), I tried a professional one year. Literally in the first year, he looked over my prior DIY'd returns [that I was certain I'd done correctly] and found an error in one year where I'd overpaid $29K by miscalculating the basis of some employee RSUs and it was still within the statute of limitations where I could amend that year. He saved me 10 years' worth of his fees before he'd filed my first full year of taxes.
    • copperx 10y ago
      Do you run a multinational company? Or how did you afford throwing away $29K for a simple arithmetic error?
      • mercutio2 10y ago
        He didn't say arithmetic error, he said miscalculated basis. Very different. Here's how it happens to lots of people. 1. Vest RSUs worth $25k-500k, depending on how senior you are and what BigCo you work for 2. Employer sells 40% of your shares instantly upon vesting, for taxes 3. Employer remits that 40% to the government 4. You sell all your shares, because you realize concentrating your risk of investment loss with the risk of unemployment is a bad idea. Basis should be approximately 60% of that year's vesting 5. Employer correctly reports the full pre-tax vested RSU value as income on your W2 6. Broker, for incredibly Byzantine and unfortunate legal reasons, reports basis of vested-then-sold stock as zero If you miss step 6. when filing your taxes and just naively enter the numbers your broker gives you in your tax forms, you will be double taxed, capital gains on the full value of your sale, instead of ~$0 gain for your vested-then-sold stock. Your employer already covered that income on your W2. So, sokoloff may have just inappropriately paid capital gains on a $300k vest. Sizable, but fairly normal for a high performing senior engineer or manager at a BigCo. Alternatively, the same logic applies (and it's even easier to screw up) if you held on to your shares from multiple years of vesting, and sold them all at once, so the original grants may have been smaller. If they appreciated, you owe tax on the adjusted basis, not the zero basis reported by the broker. Side note: you need to check this particular failure even if you take your return to a place like H&R Block. H&R Block specifically has repeatedly screwed this up for many different coworkers of mine. And then they didn't help with the necessary amended return. Stear clear of H&R Block.
  • wwalser 10y ago
    > How is that possible? I paid just shy of $3k for tax prep last year. The package of information that I sent to the IRS was more than 50 pages of documentation. I joke with friends that you'd think I was an international oil baron but in my mind I'm a pretty regular person. Judging from Patio11's writing I would guess that his situation is similar to mine (though he seems more confident in grocking IRS rules and doing his own accounting and taxation than me). Here are a few of the complicating factors that make me want to pay to make the problem go away instead of reading IRS documentation for literal weeks to learn how to do it properly: * Income in two countries. * Tax treaty between those two countries. * RSUs from two companies. * Options from one company. * Difference between what stock events are taxable in the two countries. * 401k and similar account in other country. * Vanguard ETFs with some sells for loss harvesting purposes. * Running a company into which I've put some personal cash. I did my taxes myself using Turbo Tax for around $60/year for years. Until suddenly I didn't and started paying what seems like a lot of money. Once you leave W-2 land, things get complicated more quickly that seems reasonable.
• koolba 10y ago
  How much of that $5K is fixed and how much is variable (on number of employees)?
• outside1234 10y ago
  How does your employer compute your taxes without knowing your outside income in interest, dividends, etc? Or do you have to share that with your employer in Japan?
  • sfifs 10y ago
    Not in Japan but live in India which follows essentially a similar system. In India at least, the short answer is the employer doesn't. However, every financial institution that deals with you deducts and prepays some taxes on your behalf and also reports the income. So at the end of the year, it shows up in a report which shows tax deposited and you just have to fill in the sum of that income as "other income". This system is good enough that if you are a salaried person with some investments and some tax deductibles like housing loan, tax filing takes about an hour and also normally doesn't have any surprise element of "you owe the taxman X" It becomes complex only for business owners which is a small minority of the population of any country.
  • anuraaga 10y ago
    Japanese securities companies have special accounts which automatically report tax-related information to the tax agency and withdraw taxes appropriately. So you'd be able to do standard stock and currency trading without being required to file a return. It's quite nice being able to work at a company and participate in the market, and still not have to worry about filing. Doing rarer activities such as investing in startups brings you into return-filing territory though, but I guess that's unavoidable since it's private investing, and not a concern for most people. Reading many comments on this post, it's clear hackers generally aren't "most people" ;)
• csomar 10y ago
  yeah I was not too convinced when I read the article. The government can easily figure out the taxes for your wage (which your employer did actually figure out) but they can't figure out the taxes on your real estate revenue, and maybe other activities (traded cryptocurrency? freelanced on the side? Airbnb"ing" some of your estate)
  • s73ver 10y ago
    So you have a good start, one which is enough for the vast majority of people. Those that do have those things have to do a little extra work. I'm not seeing an argument against doing this.
    • ghaff 10y ago
      There are two simpler IRS forms (1040EZ and 1040A) for people with simpler tax situations which are used by something like 40% of filers. People with simple tax situations really just need to transfer a few numbers to a form and send it in. I guess the process could be even simpler but it's already pretty straightforward if your income streams and deductions are simple.
  • obstinate 10y ago
    I am not able to find a citation for this, but I would be surprised if more than a small fraction of Americans had significant non-wage, non-financial institution investment income to report. A solution doesn't have to solve a problem for everyone to be useful.
    • vonmoltke 10y ago
      That's just income. There is also the issue of deductions and credits, which covers many more people. The income portion of my taxes takes me about 5 minutes. Most of my time is spent on the deductions and credits portion.
      • obstinate 10y ago
        Seventy percent of households take the standard deduction or have no income: https://taxfoundation.org/who-itemizes-deductions/ https://taxfoundation.org/who-itemizes-deductions/
• II2II 10y ago
  Wouldn't American employers also be spending a fair bit of money figuring out taxes for their employees prior to handing off the data and money to the IRS? And wouldn't financial institutions be doing something similar for their clients? The systems described by the article seem to be using the data submitted by employers and financial institutions to generate a tax return, which the tax payer verifies or adds to (in the case of self-reported income). For the majority, filing taxes would either be a simple confirmation that the government has complete data or vastly simplified because a great deal of the work has already been done for them.
  • fredophile 10y ago
    Not really. I don't have first hand experience but my understanding is that if you're employed as a salaryman in Japan then your employer will file your taxes for you. That is very different from your employer sending a form saying how much they paid you and what was already deducted for taxes.
    • the_mitsuhiko 10y ago
      I don't know how it's in Japan but in Austria neither the company nor the employee file taxes. There is a general tax withholding that you do as an employer for your employees but the taxes are filed automatically by the state. You can then retroactively go in and modify that by doing a "Arbeitnehmerveranlagung" where you can claim modifications to your automatic tax filings. This is a different process for when you are self employed and you actually file taxes from "scratch" which however is also a significantly simplified process.
      • code_duck 10y ago
        This is effectively not very different than how it works for most people in the US. Yhe employer sends the government forms and funds for your estimated taxes, and at the end of the year the taxpayer files a return and gets a refund based on varying deductions.
  • rayiner 10y ago
• Angostura 10y ago
  In the U.K. If you are employed, your tax is worked out for your through the Pay as You Earn system. If you are self employed you fill in the rather good self-assessment form online and your tax is calculated for you.
  • genericpseudo 10y ago
    If you have to file UK tax from outside the UK, then you have to do it on paper or use commercial software, but it costs from about $30 a year, so no big deal.
  • mino 10y ago
    The UK web-based procedure for self-employed tax return is very easy to use. I did it for years with no need for an accountant, despite my business was complicated by special circumstances (non-UK customers, tax-exempt research funds, etc). The one year I was in credit, they wired me the money within days.
  • malza 10y ago
    They are currently doing a big redesign for self employment. Basically moving from a yearly overview of accounts to an on-demand system - where you pay taxes as they are charged. I hope they don't force people to use the new method.
  • gadders 10y ago
    Most self-employed IT Contractors I know all have accountants.
• jonathankoren 10y ago
  > Your employer does, as one of the (many!) ways in which they exercise paternalistic control of your life. That's an odd characterization. Most people would think getting the equivalent of pre-filled 1040EZ as controlling.