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When you get a new job, you fill out some forms that tells the government how much money to withhold from your paycheck based on your expected earnings, deducti

When you get a new job, you fill out some forms that tells the government how much money to withhold from your paycheck based on your expected earnings, deductions, etc. Later, at the end of the year, you file your return of what you actually made, what your actual deductions were, etc. And then the government will either pay you if you paid too much or they will ask you to pay if you did not pay enough.

andyjohnson0 3y ago
Thanks. Presumably such a person wouldn't need tax-return software? The system here in the UK is similar, except that "regular workers" don't file a tax return. Work-related deductions/additions (e.g. private health plans) are reported by the employer and are automatically accounted for. Non-work stuff like capital gains on personal property sales are mostly dealt with as part of the transaction.
- yurishimo 3y ago
  The user you're replying to simplified the process some. There is no government website that will tell you exactly what you owe. You always are doing the math yourself and then hoping that you did the math correctly. Even for a refund, it's up to you to tell the government that you overpaid. The reason you might have heard a lot of fuss around hiring more IRS agents, is that the only way to validate these numbers if to be audited (broadly speaking). There might be some automated checks for very obvious things but much of the process is self-reported. The software is largely there to help people with the math and accounting for all of the deductions that the average person may be eligible for (mortgage interest being the largest and most common).
- oefrha 3y ago
  > Presumably such a person wouldn't need tax-return software? Wrong. I did my first tax return by manually filling out the PDF form. Even though I only had a single income and was filing the EZ form, it took at least an hour or two. Then there were state taxes.
- ImPleadThe5th 3y ago
  Sorry I don't think I clarified enough. To fill out your expected taxes you have to do calculations to determine the proper deductions. So very often you do end up owing because your original paperwork wasn't quite right. The software is not necessarily "required" you could fill out all of these forms by hand and the IRS also provides online software to aide in filling some of the forms. Many people do do this if they have very simple tax situations and they don't mind dedicating some time to it. However, due to the complexity of the filing it often is just easier to pay turbotax, HR block, etc to ask some questions and auto-populate the forms for you. There is also weirdly specific forms you sometimes need for certain deductions/situations (foreign income, foreign bank accounts, investments, crypto, living on a college campus, school supply tax reductions, etc) and its not always obvious when you need to fill these forms out, you could read the IRS website but that's excruciating. So often times these tax softwares also ask questions to help you determine what forms are necessary to have a complete return or help you maximize your deductions by finding the ones you qualify for.
- coldpie 3y ago
  > Presumably such a person wouldn't need tax-return software? Correct. Part of the tax prep scam is convincing people that they will get the death penalty if they screw up their taxes, so they need an accountant or all these fancy software gizmos to do it right. If you can use a calculator, and aren't a SBO or have a massively complicated investment scheme, then you can do your own taxes in an hour or two. The IRS will send you a polite letter letting you know if you screwed up.

andyjohnson0 3y ago

Thanks. Presumably such a person wouldn't need tax-return software? The system here in the UK is similar, except that "regular workers" don't file a tax return. Work-related deductions/additions (e.g. private health plans) are reported by the employer and are automatically accounted for. Non-work stuff like capital gains on personal property sales are mostly dealt with as part of the transaction.

yurishimo 3y ago
The user you're replying to simplified the process some. There is no government website that will tell you exactly what you owe. You always are doing the math yourself and then hoping that you did the math correctly. Even for a refund, it's up to you to tell the government that you overpaid. The reason you might have heard a lot of fuss around hiring more IRS agents, is that the only way to validate these numbers if to be audited (broadly speaking). There might be some automated checks for very obvious things but much of the process is self-reported. The software is largely there to help people with the math and accounting for all of the deductions that the average person may be eligible for (mortgage interest being the largest and most common).
oefrha 3y ago
> Presumably such a person wouldn't need tax-return software? Wrong. I did my first tax return by manually filling out the PDF form. Even though I only had a single income and was filing the EZ form, it took at least an hour or two. Then there were state taxes.
ImPleadThe5th 3y ago
Sorry I don't think I clarified enough. To fill out your expected taxes you have to do calculations to determine the proper deductions. So very often you do end up owing because your original paperwork wasn't quite right. The software is not necessarily "required" you could fill out all of these forms by hand and the IRS also provides online software to aide in filling some of the forms. Many people do do this if they have very simple tax situations and they don't mind dedicating some time to it. However, due to the complexity of the filing it often is just easier to pay turbotax, HR block, etc to ask some questions and auto-populate the forms for you. There is also weirdly specific forms you sometimes need for certain deductions/situations (foreign income, foreign bank accounts, investments, crypto, living on a college campus, school supply tax reductions, etc) and its not always obvious when you need to fill these forms out, you could read the IRS website but that's excruciating. So often times these tax softwares also ask questions to help you determine what forms are necessary to have a complete return or help you maximize your deductions by finding the ones you qualify for.
coldpie 3y ago
> Presumably such a person wouldn't need tax-return software? Correct. Part of the tax prep scam is convincing people that they will get the death penalty if they screw up their taxes, so they need an accountant or all these fancy software gizmos to do it right. If you can use a calculator, and aren't a SBO or have a massively complicated investment scheme, then you can do your own taxes in an hour or two. The IRS will send you a polite letter letting you know if you screwed up.