The submission of taxes here compared to its home country of Sweden could no longer be a divergent experience for Jens Peter de Pedro.
There de Pedro receives a tax return with everything the government has fulfilled. He can sign and return it by mail or app. Can call and enter the code to accept it. Or may send the text of his tax law and answer that, similarly to the restaurant reservation confirmation.
But in the United States, his American wife “disappears for a few days to deal with taxes,” he said, the time of the year De Pedro describes as “pain in our family.”
“I don’t know what’s going on. It’s like a black box,” he said. “I don’t understand what makes him so complicated in the US.”
Welcome to the USA in the United States, where the average American consumes 13 hours and $ 270 to submit the most basic federal tax form. The tax code of our country covers 4 million words, and its complexity contributes to why fifths of Americans who fulfill the conditions do not require one of the most respected tax reliefs available.
“The current system was not consciously designed from top to bottom,” said Alex Muresiana, a senior analyst of politics in the Tax Foundation, Yahoo Finance said. “The story of income tax is individual changes in several decades, and then he pushed into what we have today.”
To be sure, other countries have yet to come up with how to simplify taxes among self-employed, but when it comes to workers from 9 to 5, they are far ahead of the US. To simplify the procedure here, they would require some congress acts and our willingness to indulge in the benefits of which we believe that this complicated tax system provides.
In the UK, Alex Kircley does not have to do anything to match the tax on the money he earns from his employer throughout the year. No return. Hope.
“The employer has quite solved the Government,” said Kircley, who lives in Manchester, England. “They can check regularly if you are in the correct tax class if you had a promotion. This is all automatically classified by salary teams.”
The UK uses a salary while earning a system, where taxes are taken from your salary, much like it was done in the USA. But the British system “aims to be more precisely deducting” than what is possible in the US “because of different complexities,” said Janet Holtzblatt, a senior associate at the Urban-Brookings Center for Tax Policy.
One of the greatest is married tax status. In the UK – together with many other countries around the world – each individual is taxed separately, regardless of their marital status. This facilitates the assessment of precise tax deductions because your spouse’s earnings should not be taken into account to determine your tax rate. For married couples in the United States, their combined income is what determines which tax circle they fall into.
Another factor that bothers our tax system are different loans and deductions we can request.
“We take a lot of social policy through the tax law for various reasons,” Murasian told.
While other countries could determine the government agencies for managing social welfare programs that have expelled from tax dollars, now they provide assistance in the form of return tax reliefs.
For example, many countries have universal health systems. But in the United States, health insurance for working age from people is privately initiated. In order to help taxpayers with these costs, there is a tax deduction for contributing to health savings accounts, a tax loan for those registered in the market coverage under the Law on High Care and a tax deduction for medical costs from the pocket.
Take and Income tax earned (Eitc), introduced in 1975 to provide assistance to citizens with lower income.
People who meet the conditions for EITC may have no reason to file a tax return because they earn so little that they do not have a tax liability. This tax benefit can literally put money in the pockets of poor people, but the loan must be demanded through the tax system.
“Although the tax law has become increasingly complex, in some ways it becomes more useful for taxpayers,” Holtzblatt said. “There are more types of help at your disposal.”
Even this additional help is not targeted just people with lower incomes.
Many legislators and special interest groups have encouraged tax breaks to encourage certain types of behaviors such as retirement (Saver’s loan and deduction for traditional IRA -E), possession of the home (deduction of hypothecular interest) and a charity organization (charity deduction) .
In many cases, they became holy cows.
Just look at the restriction of the sales and local taxes or salt deduction under the Law on Tax and Jobs Law in 2017. Politicians representing countries with high property taxes, whose residents have received the greatest benefit of deduction, are still trying to limit.
“We would all like the simpler tax code to reduce the burden, expenses and mental anxiety of taxes,” Holtzblatt said. “On the other hand, simplification may require the loss of some benefits you receive through the tax law.”
And the tax companies are similarly interested in continuing to make money from our complex tax system.
This photo shows the building of the Internal Revenue (IRS) headquarters in Washington, April 13, 2014 (AP Photo/J. David Ake, File) ·Associated Press
One area where it is simplified – even around the world – is around a free or gig.
In Sweden, De Pedro used accountants to carry out taxes when he worked as a freelancer. The process sounds familiar to our self -employed workers. He had to collect his receipts and invoices to determine how much taxes should be paid to his government.
“It’s a lot of handmade procedure,” De Pedro said.
The same thing for Kircley in the UK, who is the announcer of the Manchester City football club, a contractual job. He also uses an accountant to submit a tax return for income that earns from that secondary job, as well as what his wife earns from his own job.
“I pay for someone to do it right because I would be useless in that,” he said.
Kircley also holds money during the year to make sure he can cover all the taxes he can reach, just like many Americans who are self -employed or have side crowds.
“The possibility of pre -completed refunding from the Government with deductions, capital gains or self -employment incomes, it is a very difficult obstacle that countries can overcome because this information is not independent available to the tax authorities,” Holtzblatt said.
“This will always create a request for third paid preparations,” she added.
However, I can now simplify my tax system in ways in which other countries have already succeeded. And the steps were recently made for that.
In 2017, Tcja doubled the standard deduction and suppressed several detailed deductions that “dramatically reduced the number of taxpayers who would decide to collect from about 30% to 10%,” Murasian said.
We do not have to simplify the experience of taxpayers of taxes by themselves. In addition, many of these taxpayers may also be among the 30.3 million Americans who have the right to use IRS -O’s Direct File Programwhich allows you to return uncle on its own at no cost.
The program made his debut last year in 13 countries and spread to 25 countries for this tax season. It can now automatically introduce some of your W-2 data directly from the IRS and process a refund that requires more tax breaks. Still, this is far from what Sweden provides.
“We are talking about different layers of simplifying the application system and the direct file is at that first level,” Holtzblatt said.
The next step would be to send taxpayers to a pre -filled tax return, and the third and highest level of simplification would be to calculate the IRS how much taxpayers owe. To do this some legislative changes, Holtzblatt said, binding companies to give 1099 patterns that report interest, dividends and other revenues much earlier than now.
“We are far from the second step and really far from the third step,” Holtzblatt said. “But the first step is a big step over where we were before.”
Janna Herron is an older columnist at Yahoo Finance. Follow her on x @Jannaherron.
