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I've seen this so many times. US Tax law is far too nuanced and complex for this. Just simple things like donations create issues. Donations to registered 501
by sathackr 5y ago
I've seen this so many times.
US Tax law is far too nuanced and complex for this. Just simple things like donations create issues.
Donations to registered 501(c)(3) charities are tax exempt. But how does the IRS know if you gave the Salvation Army bell ringer $20? You have to tell them. On your tax return.
Medical expenses in excess of 7.5% of your income are also exempt. And the IRS has no clue which of your expenses were medical. So you have to tell them.
It's far more involved and complex than even just this. Did you move? Are you a member of the military? Costs related to your move are not taxable.
There are probably thousands of potential exemptions. Few of which could be automatically identified and credited without massive privacy issues. And even then couldn't be perfect.
That cardboard box you bought at the local big-box store? Was it a tax exempt moving expense?
Oh, and the IRS has been sitting on my return for 2 months now and I did all the work for them. Could only imagine what it would look like if they had to track all of this.
- sseagull 5y agoThere are many possible deductions, however a lot of people can’t/shouldn’t use them because of the large standard deduction. The question is how many people file taxes which are basically W2 plus standard deduction? My bet is quite a lot. Don’t let the perfect be the enemy of the good.
- acdha 5y agoThe figures I’ve seen have around 80% of taxpayers taking the standard deduction: https://taxfoundation.org/standard-deduction-itemized-deductions-current-law-2019/ https://taxfoundation.org/standard-deduction-itemized-deduct...
- sseagull 5y agoI feel like that is about right, especially with the higher standard deduction. I bought a house early last year for 250k. Including all the interest, fees, taxes, etc, plus all my family's medical expenses, and even things that I'm not sure I could include, I still couldn't reach the standard deduction. It really is a lot of money for most people.
- viraptor 5y agoIt's not that hard really. You can get everything prefilled as if none of those points applied. Then you make changes which apply to you. Various levels of deduction exist in other countries too - for example in Australia. But I get 95% of the form prefilled from employers/banks/insurance and only add what's missing.
- ip26 5y ago1040EZ is basically what you describe. It may not be pre filled but it’s something like two pages, and there’s not much to it.
- colinmhayes 5y agoThe vast majority of Americans take the standard deduction. Those that don't can afford an accountant.