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Most countries have this "automagical tax filing process". And what kills me the most is that America actually secretly has this same system too. Yet every year

Most countries have this "automagical tax filing process". And what kills me the most is that America actually secretly has this same system too. Yet every year we have to go through the charade of filing taxes ourselves, when the governemnt already knows what we owe without us needing to round up paperwork, W2 forms, 1099 forms, and so forth. Yet they make us do it anyway. Don't believe me? Simply don't file your taxes next year. You will get a letter from the IRS sent to you that literally tells you what you owe. They know all of your income down to the cent, they know what you owe. This automagical system exists. Yet the only way to "use" it is to either not pay your taxes, or to pay them wrong. Yet every year, the IRS makes us go through the charade of putting our taxes together and all the work (and money) that it entails, when the whole time they know what we owe already and expects us to pay that unless we can prove them otherwise.

dehrmann 7y ago
> They know all of your income down to the cent If you have a W-2 job and all your investments are in a bank or brokerage, but they still don't know your filing situation, dependents, other income, or deductions. Not that I'm justifying the current system. It's just that the IRS only knows the big picture for most people. The rest is complicated.
- redisman 7y ago
  Don't they know that from the W-4? Or does that not go to the IRS
  - dehrmann 7y ago
    I'm not sure if it does or not, but you can have one W-4 per paycheck, so I thought it was just used to figure out your withholding. The amount withheld shows up on your W-2.
  - deleted 7y ago
    [deleted]
  - zrail 7y ago
    W-4s are not filled with the IRS. Employers are required to maintain them for inspection whenever the IRS wants though.
    - kelnos 7y ago
      There's no reason why they couldn't go to the IRS though. They could quite easily maintain this information and make it easy for you to update it come tax time if it's changed.
- torgian 7y ago
  Or if you work overseas and send regular payments to your bank account in the States, you need to make sure you file your Foreign Exclusion Tax form. Which is even more complicated. -.-
burfog 7y ago
If it was automatic, income would be missed. The government would be revealing what it doesn't know about, and people would not supply the missing information. Under the current system, people aren't sure what the government is aware of. Because we get in trouble for leaving things off, we are more likely to report everything.
- deleted 7y ago
  [deleted]
- rockinghigh 7y ago
  We know what the IRS knows because the majority of people get the same forms as the IRS as far as income goes: W2, 1099, 1098, ... Unless you’re self-employed, the IRS only misses some deductions or foreign income.
  - adventured 7y ago
    Ever performed a lot of stock trades in a single year and had the IRS believe that you owe them $5 million in income taxes because they assume every sale you made was all profit? That's always fun, especially when they think they're right and they're entirely wrong. The IRS information is at times comically incorrect in fact.
    - fountainofage 7y ago
      If you're trading more than $20 million a year in stocks, you are in the vast minority that everyone here acknowledges would need to adjust and file your taxes manually. 99.999% of the US population is not trading $20 million a year in stocks, and everyone else here is merely talking about the 95% of the population that has straightforward tax returns.
    - azinman2 7y ago
      Which is why most countries have a system that shows you what they think, and you can accept or not. It’s not like the majority of people are in such a situation, and likely over time that will become less common as its often a byproduct of legacy systems / mergers that lose the original transaction.
rs23296008n1 7y ago
Completely agree. Tax preparation is actually work the government should pre-fill. Australia does this. You can do your taxes online free and/or get an accountant or an army of accountants if your affairs are that complex. Frankly, the government should do the initial assessment for you generated automatically from the many, many existing surveillance systems already in place. They are watching all financial transactions and you might as well assume they are. To even imply otherwise, and I've seen other comments say they shouldn't / don't have this already in place... even when social media companies are slurping data every way they can... seems absurd. All that said, you should go through each item and correct their mistakes. Those matching systems aren't perfect.
irrational 7y ago
What they don't know is my charitable deductions. My charitable deductions greatly reduce my taxes. If I went with their automagical tax filing process I'd lose out on those deductions.
- the_mitsuhiko 7y ago
  That could be automated too largely. In Austria charities submit this information to the government and it automatically gets added to your prefilled tax filings.
  - samus 7y ago
    True, this was a very nice suprise on my last tax filing. I had even almost forgotten myself about those donations!
  - irrational 7y ago
    Things don’t really work that way in the USA. I can take a bunch of stuff to a place like Goodwill. They will give me a little slip of paper that is “proof” that I donated, but they don’t keep records of my donation. The only way the government could know about it is if I tell them at tax time.
jdsully 7y ago
The IRS will intentionally not give you any deductions and the cost basis for any capital gains will be $0 regardless of what you paid. The intent of the "return" they file for you is to get you to file a real once since their version will say you owe a lot of money. This is all explained in the letter they send you should you fail to file.
thw0rted 7y ago
Everyone who replied to this with "But what if...?": we are not talking to you. To a first approximation, literally everybody else does not have your problem -- they have W2 income and their filing status is very probably the same as it was last year. If you got married you filed a marriage license; if you had a kid your name was likely on the birth certificate. The IRS could guess everybody's taxes and be right at least 80% of the time, quite probably more like 95%. It really would be an existential threat to H&R Block, and good riddance.

dehrmann 7y ago

> They know all of your income down to the cent If you have a W-2 job and all your investments are in a bank or brokerage, but they still don't know your filing situation, dependents, other income, or deductions. Not that I'm justifying the current system. It's just that the IRS only knows the big picture for most people. The rest is complicated.

redisman 7y ago
Don't they know that from the W-4? Or does that not go to the IRS
- dehrmann 7y ago
  I'm not sure if it does or not, but you can have one W-4 per paycheck, so I thought it was just used to figure out your withholding. The amount withheld shows up on your W-2.
- deleted 7y ago
  [deleted]
- zrail 7y ago
  W-4s are not filled with the IRS. Employers are required to maintain them for inspection whenever the IRS wants though.
  - kelnos 7y ago
    There's no reason why they couldn't go to the IRS though. They could quite easily maintain this information and make it easy for you to update it come tax time if it's changed.
torgian 7y ago
Or if you work overseas and send regular payments to your bank account in the States, you need to make sure you file your Foreign Exclusion Tax form. Which is even more complicated. -.-

burfog 7y ago

If it was automatic, income would be missed. The government would be revealing what it doesn't know about, and people would not supply the missing information. Under the current system, people aren't sure what the government is aware of. Because we get in trouble for leaving things off, we are more likely to report everything.

deleted 7y ago
[deleted]
rockinghigh 7y ago
We know what the IRS knows because the majority of people get the same forms as the IRS as far as income goes: W2, 1099, 1098, ... Unless you’re self-employed, the IRS only misses some deductions or foreign income.
- adventured 7y ago
  Ever performed a lot of stock trades in a single year and had the IRS believe that you owe them $5 million in income taxes because they assume every sale you made was all profit? That's always fun, especially when they think they're right and they're entirely wrong. The IRS information is at times comically incorrect in fact.
  - fountainofage 7y ago
    If you're trading more than $20 million a year in stocks, you are in the vast minority that everyone here acknowledges would need to adjust and file your taxes manually. 99.999% of the US population is not trading $20 million a year in stocks, and everyone else here is merely talking about the 95% of the population that has straightforward tax returns.
  - azinman2 7y ago
    Which is why most countries have a system that shows you what they think, and you can accept or not. It’s not like the majority of people are in such a situation, and likely over time that will become less common as its often a byproduct of legacy systems / mergers that lose the original transaction.

rs23296008n1 7y ago

Completely agree. Tax preparation is actually work the government should pre-fill. Australia does this. You can do your taxes online free and/or get an accountant or an army of accountants if your affairs are that complex. Frankly, the government should do the initial assessment for you generated automatically from the many, many existing surveillance systems already in place. They are watching all financial transactions and you might as well assume they are. To even imply otherwise, and I've seen other comments say they shouldn't / don't have this already in place... even when social media companies are slurping data every way they can... seems absurd. All that said, you should go through each item and correct their mistakes. Those matching systems aren't perfect.

irrational 7y ago

What they don't know is my charitable deductions. My charitable deductions greatly reduce my taxes. If I went with their automagical tax filing process I'd lose out on those deductions.

the_mitsuhiko 7y ago
That could be automated too largely. In Austria charities submit this information to the government and it automatically gets added to your prefilled tax filings.
- samus 7y ago
  True, this was a very nice suprise on my last tax filing. I had even almost forgotten myself about those donations!
- irrational 7y ago
  Things don’t really work that way in the USA. I can take a bunch of stuff to a place like Goodwill. They will give me a little slip of paper that is “proof” that I donated, but they don’t keep records of my donation. The only way the government could know about it is if I tell them at tax time.

jdsully 7y ago

The IRS will intentionally not give you any deductions and the cost basis for any capital gains will be $0 regardless of what you paid. The intent of the "return" they file for you is to get you to file a real once since their version will say you owe a lot of money. This is all explained in the letter they send you should you fail to file.

thw0rted 7y ago

Everyone who replied to this with "But what if...?": we are not talking to you. To a first approximation, literally everybody else does not have your problem -- they have W2 income and their filing status is very probably the same as it was last year. If you got married you filed a marriage license; if you had a kid your name was likely on the birth certificate. The IRS could guess everybody's taxes and be right at least 80% of the time, quite probably more like 95%. It really would be an existential threat to H&R Block, and good riddance.