I can’t agree with this enough, though I think part of the problem is that it isn’t what’s easy to complete your W-4 accurately, there is an entire worksheet to use if you file jointly that is sorta difficult to do well, especially if both people make fairly different amounts. If you just choose the basic withholding it’s very likely the bigger breadwinner isn’t withholding enough and you’ll end up owing about what the comic shows (at least that is my experience, as well as some friends).
I think the real problem in the US is that everyone is left to do their tax paperwork from scratch every year when the IRS could send you a personalized return prefilled that you then claim the deductions and credits you’re due and account for any descrpenices (which sure, is what your W-2 is supposed to be, but it isn’t really that, you still need to use the worksheets on the 1040 or pay someone/some software to do it for you; a prefilled 1040 would be a way better system).
It also doesn’t account for the huge variations in state taxes. Many states have income taxes, some are reciprocal with nearby states and others aren’t, the deductions and credits and even what is taxable is all different. The whole thing is a mess. Then lord help you if you live in a state with local income taxes or one where your local taxes are different than school taxes(like PA) and the whole thing is a half day exercise in frustration to complete and you’re still left wondering if you did it right.
Yeah, I’m not by any means trying to say that the American system is the best way of doing things. It’s definitely not, and to be honest I’ve never quite managed to get my state withholding right - I almost always owe a little bit (usually a hundred dollars or so). But some folks seem to have gotten some strange ideas about how bad it actually is.
Yeah, we almost always owe a tiny bit (usually less than $100, often less than $50) to the state. I don’t really understand how I can get so close but still miss it every year but overpay federal taxes when it’s all based on the same W-4 I give to my employer.
The school districts get part of our local income taxes which is separate from what municipalities get (technically municipalities run wholly on property taxes, and the schools get a portion of that plus a portion of local income taxes that are split with the county. It’s convoluted IMO). It depends on where you are employed and where you live, since your employer remits taxes to the municipality you work in and that municipality remits taxes to school districts based on where each employee lives (at least that’s how I understand it, it all is mostly transparent other than needing to include various location codes on forms for your employer and for your local tax return).
I can’t agree with this enough, though I think part of the problem is that it isn’t what’s easy to complete your W-4 accurately, there is an entire worksheet to use if you file jointly that is sorta difficult to do well, especially if both people make fairly different amounts. If you just choose the basic withholding it’s very likely the bigger breadwinner isn’t withholding enough and you’ll end up owing about what the comic shows (at least that is my experience, as well as some friends).
I think the real problem in the US is that everyone is left to do their tax paperwork from scratch every year when the IRS could send you a personalized return prefilled that you then claim the deductions and credits you’re due and account for any descrpenices (which sure, is what your W-2 is supposed to be, but it isn’t really that, you still need to use the worksheets on the 1040 or pay someone/some software to do it for you; a prefilled 1040 would be a way better system).
It also doesn’t account for the huge variations in state taxes. Many states have income taxes, some are reciprocal with nearby states and others aren’t, the deductions and credits and even what is taxable is all different. The whole thing is a mess. Then lord help you if you live in a state with local income taxes or one where your local taxes are different than school taxes(like PA) and the whole thing is a half day exercise in frustration to complete and you’re still left wondering if you did it right.
Yeah, I’m not by any means trying to say that the American system is the best way of doing things. It’s definitely not, and to be honest I’ve never quite managed to get my state withholding right - I almost always owe a little bit (usually a hundred dollars or so). But some folks seem to have gotten some strange ideas about how bad it actually is.
Yeah, we almost always owe a tiny bit (usually less than $100, often less than $50) to the state. I don’t really understand how I can get so close but still miss it every year but overpay federal taxes when it’s all based on the same W-4 I give to my employer.
School taxes? What is that?
The school districts get part of our local income taxes which is separate from what municipalities get (technically municipalities run wholly on property taxes, and the schools get a portion of that plus a portion of local income taxes that are split with the county. It’s convoluted IMO). It depends on where you are employed and where you live, since your employer remits taxes to the municipality you work in and that municipality remits taxes to school districts based on where each employee lives (at least that’s how I understand it, it all is mostly transparent other than needing to include various location codes on forms for your employer and for your local tax return).
I look like that mouth-hanging-open emoji right now. Convoluted for sure!
Our municipal taxes are paid directly to the local council. Education is funded by central government.