Can I ask the Americans something?
Why do they all hate April 15th so much?
I love doing my taxes. I always get a tax refund, and I usually do it earlier to get it sooner.
Does everyone have to pay taxes? Don't some people get money back? Why does everyone talk about with such disdain???
A follow-up question from Jo's...
How many of you automatically get taxes deducted from your pay?
Everywhere I worked, I had the taxes deducted from my initial pay. So, when it came to tax time, I was either guaranteed to break even or possibly get something back (for example I got $150 last year for taking public transit every month).
If you are a consultant (work for yourself) or work for a really small company then they won't be deducted automatically, but I think most people here have that advantage.
LOL and even more follow up...
When I do my taxes, it's a VERY simple process. I have one slip from my place of employment (we call them T4s) that lists all the deductions. I transfer those numbers to the tax form. Done. It's next to no effort whatsoever. When I was in college I had some added deductions/slips, if I donate to charities/political parties, etc., there would be more... if I had investments, there would be some added paperwork. But on the whole, you don't here me bitch about tax time. On the contrary, I get really excited at tax time, as I usually get a nice fat return (cash back).
Is it because Americans have those 401Ks and things, and there is more paperwork? Also, you guys get to deduct mortgage interest, don't you? That's more math, but not much. Plus, there is software you can use that eliminates all the thinking.
I also don't actually mind paying taxes. I like to think I get a big bang for my tax buck (national health care, good roads, police, schools, etc.) so I don't complain about how much I pay.
MHO.
I think most Americans don't want to pay taxes because we don't want to give their hard-earned money to the government. Personally, I don't get why people get so upset about Tax Day either. Maybe they think they feel they are getting ripped off because it seems like we pay and pay, and we don't see much in return. I know when I talk to certain people about national health care - their eyes get big and they say, "you mean like socialism," as if the idea of everyone paying even more taxes is absurd.
I don't like filling out the forms at all. I am not a numbers kind of person, but I do it without too much whining. Usually I get a little bit back, but not much.
By the time tax day comes around, we have already paid ours. I always get a refund. The worst thing about taxes is the paperwork you have to collect all year, and then BJ hauls all this to the tax accountant. BJ does some of the preliminary work, simpler forms and such, but some of the investment issues are so complex, we just can't. So we hate January because that's when we must organize. As to the money itself, pffft. We get a lot for our tax dollars. It doesn't go into our pockets, but it pays for police, fire, county hospitals, schools, libraries and absolutely essential infrastructure. And if we could get national health care, we'd pay up for that, too, even though neither of us uses it, or ever will, since we are both war-time veterans.
It doesn't bother me at all. It's just another day. We always file ours ASAP, like February, and we get back around $2000 so April 15th means nothing to me.
Doesn't bother me.
But yes, it's the paperwork (and yes, the general feeling that's we're paying too much, which is ludicrous). My DH is an example. Because he owns our house, he takes the mortgage interest deduction. Because he was job searching, he took the job search deduction. Ditto for the medical bills, the capital gains (he sold some Coke stock he'd had since he was a teenager), the capital losses (other stocks tanked), the carryover loss from our business that closed 8 years ago (you can only take $3k a year plus offset any other gains like the capital gains), and I don't even know what else. Oh, and he has a share of a farm with his father and cousins, so he has VERY intricate farm ownership/profit/loss paperwork.
Me? -- I have my income (W-2s we call them), my bank interest, and my student loan interest deduction. I did my taxes in half an hour. DH sends his out to a professional and it takes two months.
I haven't received a refund in years until this year, because I always set my withholdings to closely match what I owe -- why give the government an interest-free loan of YOUR money? My refund was big enough this year that I'm adjusting my withholdings again.
Quote:I always set my withholdings to closely match what I owe -- why give the government an interest-free loan of YOUR money?"
This is the first time in my life I have ever heard this perspective. Many people I know get their employers to take off EXTRA taxes so that they don't get dinged at tax time. They would rather get a pleasant surprise of extra money in the mail than a bill to pay.
I would imagine the interest is so negligible on usually <1000 that it wouldn't be worth worrying about.
***
I'm still unclear as to why people get all ansty about the date though. If they dislike paying taxes, wouldn't they bitch throughout the year, every time they see their paystub? Is it that the vast majority of people are procrastinators and wait until the very last day to do it, that's why it's such a mad rush? I still don't get it. I hear the comedians on TV make jokes about April 15th, they all roll their eyes, the whole audience laughs, and I have NO idea why it's such a big deal.
Jo Wrote:Quote:I always set my withholdings to closely match what I owe -- why give the government an interest-free loan of YOUR money?"
This is the first time in my life I have ever heard this perspective. Many people I know get their employers to take off EXTRA taxes so that they don't get dinged at tax time. They would rather get a pleasant surprise of extra money in the mail than a bill to pay.
I would imagine the interest is so negligible on usually <1000 that it wouldn't be worth worrying about.
All right, if you don't like to save money, how about spending it? A refund of $1000 is $83 a month. How many times have people wished they had just $50 extra at the end of the month? -- well, there it is, and you're giving it to the government for them to use for free!
$83 is a really nice dinner for two at a nice restaurant (or for one with lots of liquor and dessert!). It's a day-spa trip. It's a massage or facial. It's a full tank of gas in an SUV, or three fill-ups in my hybrid. It's ten paperback books to read. It's five magazine subscriptions to enjoy all year long. It's the electric bill, the cell phone bill, or the cable bill.
Sorry, it's YOUR attitude I can't comprehend. It's much easier and much more cost efficient to pay at the end of the year (the most I have ever paid was $120), than to lose out on the use and enjoyment of MY money. And if paying even $120 is a hardship, perhaps you should adjust your withholdings and take your money every month instead of looking for that refund -- With a $1000 refund, I could pay off that tax debt of $120 in a month and a half, and still have the rest to use for myself. Hence the eye on the date -- by the time you get all your documents and do your taxes early (mid-February), you have two months to get the money to pay any tax bill. Can you amass $120 in two months? -- if you can't, letting the government hold on to your money is self-defeating, since you clearly need that money every month to balance your budget!
Tax day doesn't bother me one way or another.
I'm with PG on the withholding - I set my allowances high - my goal is to owe $0-$100. You have to be careful, if you owe too much they charge you. But I also see no need to give an interest-free loan to the government, even though interest rates are low now. If I get a refund of over $100 I've screwed up.
The conservatives try to whip up people's anger over tax day, which is really a bunch of crap. We have to pay taxes to fund things like fire fighters, police, roads, garbage pick-up, water, etc. But the right-wingers get their underwear in a twist over all that.
Just to put it into perspective here... and I don't mind using myself as an example, because I'm an open book anyhow...
I just got my paystub today for two weeks.
Deductions:
Income tax: 320.58
CPP (Canada Pension Plan) : 91.62
EI (Employment Insurance premiums): 34.25
Union dues: 25.74
Union levy: 5.50
OMERS (Ontaio Municipal Employees pension) 131.64
Optional Life insurance: 5.83
Dental: 3.22
Long Term Disability: 19.18
Total deductions for two week pay period: 637.56
That's roughly a third of my pay. $20 or $40 or $60 would make no real difference at all *to me* as I'm the type of person who does better with a lump sum once a year, than a few extra bucks every pay day.
They say we Canadians are highly taxed, but like I said, I'm used to it. I don't ever really look at the gross pay, just the net pay, as *that* is what I earn, the rest is all allocated to various things that I have no control over. I don't think I could opt out of being taxed at that rate even if I wanted to. Plus the majority of the deductions are not tax at all but rather things like CPP (national pension), pension (company pension), EI and incidentals. Years that I've had a lot of refundable tax credits (when I took the trucking course, for example, or ran for parliament and donated money to my own campaign), those refundable tax credits are what garnered me the larger return. I'm taxed at the correct rate for what I earn, and theoretically, it should equal out to zero owed if I did nothing and declared no credits. Last year, I was taxed as if I earned $50K but I only 'earned' $35K as I took a leave of absence and lived off my untaxed inheritance (ahh, benefit of being Canadian!! LOL). That's why I got $1400 back this year. All of which went to repair my stolen van, so I was grateful it came when it did.
As I said, in all my years, the lunch table chatter has ALWAYS been wondering if you can get HR to deduct MORE so that you get a bigger tax return at the end of the year. Several people I know do it. I've done it in the past. It's just the gestalt around here, I guess.
Another option is to have the approximate taxation amount automatically deducted from the paycheck and **put into your own account**. That way you get the benefit of the interest instead of the government and the money is there for the end of the year when you have to pay.
I only allowed the government the use of my money for free the first couple of years I was working and then changed to withhold the money myself.
Jo -- If you pay a third of your salary toward various deductions/taxes, then you are NOT "highly taxed", and now I'm doubly miffed that we don't have universal health care! I pay 30-35% of my salary in various withholdings, including over $150 a month in health insurance premiums (and my employer pays another $280/mo on my behalf). What a load of crap, that universal health care will lead to "50% taxation rate, just like the Canadians!" I could stomp through the city like Godzilla, hearing I pay the same rate as Jo, and don't get the same benefits.
Our tax code here is extremely complicated for many people, which is why they hate Tax Day so much. It is a lot of paperwork, and the laws change every year, thus keeping the tax preparation companies in business.
Everyone who works for a company or non-profit or government agency gets certain taxes deducted (federal and state withholding, Medicare, Social Security at most), but a lot of that is based on an exemption form you have to fill out periodically. If you guess wrong about how much to have withheld based on exemptions or other personal circumstances, you will end up owing.
DH and I get a big tax refund each year, and I make no apologies for doing that. The first year we were married, we filed separately so my father could claim me. (He hadn't planned on my getting married in his tax withholding despite the fact that I'd been engaged for a year and a half and had a firm wedding date.) We ended up owing, but he paid what we owed since it was less than what he would have paid if he didn't claim me.
The second year was George H. W. Bush's famous "let's change withholding so everyone can have a little extra in their paychecks" year. I still have no idea how this happened, but we ended up owing almost $2000 even though we filed jointly and thought we had the proper number of exemptions. For a couple of newlyweds with one in grad school and another in a brand new teaching position, that was almost 10% of our gross income. It was Daddy to the rescue again. I was humiliated (as was DH, who now felt my dad thought DH could not provide for us).
Ever since then, we have always maxed out our withholding and have never been in the same position. The peace of mind I have in knowing I won't owe the government more than I can afford to pay is worth whatever interest I lose in letting Uncle Sam use my money for free. It has also put us in a budgeting cycle that allows us to take that money in February and use it for specific purposes. I don't care if it doesn't seem logical; it works for us.
If you want HR to deduct more, join a supplemental retirement program. I have $400 per two-week pay period taken out. At my old job I was up to $600/two weeks but that was back when I made more $ and had a lot lower expenses. Anyway, it's a "forced" savings program, except I don't get to use the money until I'm 55, which is fine for me.
Saving, like pretty much anything else, is about discipline. And self-discipline is like a muscle - the more you work it the easier it gets. Using a tax refund as an "emergency" savings plan isn't really effective, because you can only access the money in March or April. What happens if you have an emergency in January? If you set aside the funds along the way you can build up a nice emergency fund of say 3-months of your typical expenses, at a minimum. In these hard times people are saying emergency funds should be more like 6-months of expenses.
No way, PG, you pay the same as me but reap none of the benefits??? That's fucked. I thought I was highly taxed. Maybe I'm not. I'm in the middle tax bracket... richer people pay more, poorer people pay less.
I had heard that the problem with American health care is that the middle man (the insurance companies) suck up SOOOO much of the money, that it's quadruple the price for services there than they are actually worth. If the US nationalized health care, your costs would plunge and you would be paying way way way less for the services you now pay an arm and a leg for.
WAIT... I just remembered something. That's just income tax. We also have provincial sales tax on everything we buy (7%), GST (national tax) on all goods and services (5%) as well as property owners pay municipal taxes (property tax) through the wazoo.
Maybe that's where the money is coming from? Who knows.
I think the tax day jokes and just that; jokes.
I've never known anyone to do their taxes on April 15th. I usually do mine(or rather, pay to have them done) at the end of January, and most people I know are done with theirs by March. Many business owners have to do theirs every 3-4 months, so April 15th has no real significance anyway.
I don't like doing taxes because it's a pain in the ass to gather all the forms(work, house, loans, health care, retirement, stocks, charity, etc...I usually have a file of about 20 papers to take). All the form names confuse me and the 50 page booklet they give you to explain all of it is of no help, nor are the government tax webpages IMHO.
A few years back my health insurance changed and rather than a form 980A(or some random nonsense) I had to use a form 897T. This caused such a fiasco that I stopped doing taxes on my own and began paying others.
Maybe I'm stupid, but I find them really difficult to do on my own, so I have to pay a large fee to have them done. That of course also leads to setting up an appointment, driving across town and sitting bored out of my mind for up to 2 hours.
Every year I'm told that my employer is taking too much and I'm giving the government a loan, and every few years I attempt to change this. Nothing ever significantly changes and I don't really care what I'm giving Uncle Sam. I rather like getting a good chunk of change back after the X Mas holidays.
We pay property taxes and local/state sales taxes. We don't have a national sales tax, though.
Jo Wrote:Quote:I always set my withholdings to closely match what I owe -- why give the government an interest-free loan of YOUR money?"
This is the first time in my life I have ever heard this perspective. Many people I know get their employers to take off EXTRA taxes so that they don't get dinged at tax time. They would rather get a pleasant surprise of extra money in the mail than a bill to pay.
Really? I know A LOT of people who give the exact same reason why they do a lower withholding. A lot of people really hate that the government hangs onto their money all year and doesn't pay them interest for it. This is a very common viewpoint here. Personally I don't care either way, but I understand their point of view.
Why do I hate tax day?
1. My taxes are always complicated. For the past several years I have had all kinds of weird tax situations that require the long form. Back in my 20s when I filled out the short form and got refunds, I didn't mind doing my taxes, but they get harder every year. We hired a CPA this year for the first time, because of our hurricane losses.
2. Ever since DH and I got married, we don't get refunds anymore: we have to pay out the a$$. For the past 3 years we've had to pay in the 4 digits. And that's ON TOP of the insane amount that they withhold from our paychecks. Our CPA filed an extension for us this year, so I still don't know if we're getting a refund or not. If we do, it will be the first time since we got married.