4 ms·

I lived in four countries before moving to the USA and none of them required me to file at all. As an ordinary employee, taxes were PAYE (Pay as you Earn) and t

I lived in four countries before moving to the USA and none of them required me to file at all. As an ordinary employee, taxes were PAYE (Pay as you Earn) and there was no complicated system of tax exemptions that aren't either handled directly at source, or as separate rebates (like child allowance payments). I long for that day in the USA.

jeffwask 3y ago
It seems especially ridiculous since the US raised the standard deduction in 2017 fewer and fewer of us can itemize enough to meet it.
- jandrese 3y ago
  Not only did they raise the standard deduction, but there's that $10k limit that you slam into when trying to itemize. My total tax burden went up about 2% after that change, but it does make filing theoretically easier, except that my wife is always holding out hope so we go through all the work to itemize only to discover yet again that we're over the cap and wouldn't benefit.
  - bubbleRefuge 3y ago
    10K limit on mortgage interest from primary residence , right ?
    - jandrese 3y ago
      It's a $10k limit on deductions so dependents, charitable contributions, mortgage interest, and probably some more stuff has to stay under that cap or it doesn't count. Since that change went in we've never been able to even match the standard deduction. It increased our tax bill by about 2% and my wife has still never forgiven Trump. I think we are directly in the middle of "squeeze the middle class" part of that tax change.
      - gamblor956 3y ago
        That's simply wrong. The I.R.S. specifically notes that there is no limit on overall deductions, and hasn't been for years. https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023#:~:text=For%202023%2C%20as%20in%202022,Tax%20Cuts%20and%20Jobs%20Act https://www.irs.gov/newsroom/irs-provides-tax-inflation-adju.... However, there are now limits on individual deductions that didn't previously exist, like the SALT cap of $10,000. It also appears you were affected by the cap on the (loan) value of homes which for which you could take the mortgage interest deduction, which was lowered to $750k from $1m by the TCJA (meaning, if your home is worth more than $750k for loan purposes you can only deduct the mortgage interest attributable to the first $750k of the loan), or by the elimination of a number of 2% items (items that pre-TCJA could be deducted only if they exceeded 2% of your AGI).
      - jandrese 3y ago
        My home is nowhere near $750k, not even half of that. But every tax filing solution I've used has capped me at $10k deductions ever since the change.
  - gamblor956 3y ago
    there's that $10k limit that you slam into when trying to itemize This is...incompletely stated...the only $10,000 limit when itemizing is on SALT taxes (state and local income and property taxes). There is no $10,000 limit on deductions in general. And indeed, the IRS itself states "For 2023, as in 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act." (https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023#:~:text=For%202023%2C%20as%20in%202022,Tax%20Cuts%20and%20Jobs%20Act https://www.irs.gov/newsroom/irs-provides-tax-inflation-adju....) The increase in the standard deduction means that it became more beneficial for many taxpayers that used to itemize. But many things that could be itemized in the past can no longer be itemized, which is probably what affected you (however, due to the way the TCJA was written, that prohibition only applies until 2025 unless extended by Congress, which will depend on who wins the 2024 election).
dboreham 3y ago
"...do the right thing, after exhausting all possible alternatives"
elicash 3y ago
Does that work when the percent you're supposed to pay depends on income bracket? (Genuine question!)
- rsynnott 3y ago
  Yes. Now, there are edge-cases; in particular, things get messy when you move job and you may end up temporarily overpaying. But it works.

jeffwask 3y ago

It seems especially ridiculous since the US raised the standard deduction in 2017 fewer and fewer of us can itemize enough to meet it.

jandrese 3y ago
Not only did they raise the standard deduction, but there's that $10k limit that you slam into when trying to itemize. My total tax burden went up about 2% after that change, but it does make filing theoretically easier, except that my wife is always holding out hope so we go through all the work to itemize only to discover yet again that we're over the cap and wouldn't benefit.
- bubbleRefuge 3y ago
  10K limit on mortgage interest from primary residence , right ?
  - jandrese 3y ago
    It's a $10k limit on deductions so dependents, charitable contributions, mortgage interest, and probably some more stuff has to stay under that cap or it doesn't count. Since that change went in we've never been able to even match the standard deduction. It increased our tax bill by about 2% and my wife has still never forgiven Trump. I think we are directly in the middle of "squeeze the middle class" part of that tax change.
    - gamblor956 3y ago
      That's simply wrong. The I.R.S. specifically notes that there is no limit on overall deductions, and hasn't been for years. https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023#:~:text=For%202023%2C%20as%20in%202022,Tax%20Cuts%20and%20Jobs%20Act https://www.irs.gov/newsroom/irs-provides-tax-inflation-adju.... However, there are now limits on individual deductions that didn't previously exist, like the SALT cap of $10,000. It also appears you were affected by the cap on the (loan) value of homes which for which you could take the mortgage interest deduction, which was lowered to $750k from $1m by the TCJA (meaning, if your home is worth more than $750k for loan purposes you can only deduct the mortgage interest attributable to the first $750k of the loan), or by the elimination of a number of 2% items (items that pre-TCJA could be deducted only if they exceeded 2% of your AGI).
    - jandrese 3y ago
      My home is nowhere near $750k, not even half of that. But every tax filing solution I've used has capped me at $10k deductions ever since the change.
- gamblor956 3y ago
  there's that $10k limit that you slam into when trying to itemize This is...incompletely stated...the only $10,000 limit when itemizing is on SALT taxes (state and local income and property taxes). There is no $10,000 limit on deductions in general. And indeed, the IRS itself states "For 2023, as in 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act." (https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023#:~:text=For%202023%2C%20as%20in%202022,Tax%20Cuts%20and%20Jobs%20Act https://www.irs.gov/newsroom/irs-provides-tax-inflation-adju....) The increase in the standard deduction means that it became more beneficial for many taxpayers that used to itemize. But many things that could be itemized in the past can no longer be itemized, which is probably what affected you (however, due to the way the TCJA was written, that prohibition only applies until 2025 unless extended by Congress, which will depend on who wins the 2024 election).

dboreham 3y ago

"...do the right thing, after exhausting all possible alternatives"

elicash 3y ago

Does that work when the percent you're supposed to pay depends on income bracket? (Genuine question!)

rsynnott 3y ago
Yes. Now, there are edge-cases; in particular, things get messy when you move job and you may end up temporarily overpaying. But it works.