Meanwhile in pretty much all other nations you go online to the free website, see your employer contributions already filled in and acknowledge they are correct for the year, add any extra income, check boxes for relevant deductions and you’re done.
I've had the misfortune of having to fill in a W8-BEN-E form [1] and the first time, I just gave up and refused to work with the client because it was too complicated. The 2nd time, I got an LLM to tell me how to fill it in. Just look at the dense jargon - nonparticipating FFI, deemed-compliant FFI, Restricted distributor, International organiztion (hint, that's the wrong answer), Excepted territory NFFE, Passive NFFE, Direct reporting NFFE. There are 32 of them! What the hell is all that? Well 99% of cases are just one of those buried among the rest but you wouldn't know which without some advice.
And even if you do have a lot of things to report, why not just report those things directly and let the IRS calculate your taxes, rather than you having to do it, fill out a complicated form, then the IRS does the calculation anyways to make sure you did it right?
For every form I've ever had to file with the IRS, there's a corresponding set of instructions. Those instructions inevitably have a definitions section and/or define the terms in-line.
The instructions for form W8-BEN-E are at [0]. The definitions section starts at printed page 4 and continues through to printed page 7. Some terms you mentioned (like "Excepted territory NFFE") are not in the definitions section, but are described in their own sections.
I'm definitely not going to claim that it's foolish to consult with a tax lawyer (or similar such thing) when one is significantly uncertain about one's taxes. I'm definitely going to object to your implied claim that the IRS dumps a bunch of jargon on you and leaves you to rely on general-purpose search engines to figure out what the fuck they're talking about.
> The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping, 12 hr., 40 min.; Learning about the law or the form, 4 hr., 17 min.; Preparing and sending the form, 8 hr., 16 min.
I spoke in objection to one very specific claim:
> [The] implied claim that the IRS dumps a bunch of jargon on you and leaves you to rely on general-purpose search engines to figure out what the fuck they're talking about.
Feel free to imagine that I was addressing something else. It's a free country and all.
You also might want to look at the estimated average time for a non-business taxpayer to complete a 1040. If the 1040 estimate methodology is typical, then those estimates are pretty pessimistic.
Nonparticipating FFI. A nonparticipating FFI means an FFI that is not a participating FFI, deemed-compliant FFI, or exempt beneficial owner.
OK, then what's an FFI, a participating FFI, a deemed-compliant FFI, and an exempt beneficial owner? That's 4 other definitions to look up just to learn you should not choose option 1 of 32. If you keep track of this intermediate knowledge, it can help you skip some other options but you have to look ahead and see that possibility and find a way to store all these intermediate conclusions so that when you wake up the next day you haven't forgotten if you're an exempt beneficial owner or not - and by the way, before you even begin, you have to work out if you're a beneficial owner - exempt or not.
Once you've decided you're not an FFI, you look to see if you're a "Certified Deemed-Compliant Sponsored, Closely Held Investment Vehicle", which doesn't have a definition in the guide! What now? Try to find it in the Internal Revenue code?
By the way, the one you called out - "Excepted Territory NFFE" doesn't actually have a definition at all in the guide either and it refers you to "Regulations section 1.1472-1(c)(1)(iii)". Maybe if you're clever, you can set aside these difficult ones in case you discover an easy right answer first, but that gets back to designing a system to manage the intermediate knowledge and design your search strategy. Yes, you can do it, but also it's stupidly burdensome.
> ...your implied claim that the IRS dumps a bunch of jargon on you and leaves you to rely on general-purpose search engines to figure out what the fuck they're talking about.
I never suggested that satisfying the requirements of complex parts of the tax code would -somehow- not be complex. I even indicated support for talking to a lawyer when confused:
> I'm definitely not going to claim that it's foolish to consult with a tax lawyer (or similar such thing) when one is significantly uncertain about one's taxes.
If you'd slowed down and thought carefully about what I wrote, you probably would have spent less time overall than it took to write up your comment.
Speaking of reading too quickly:
> ...you look to see if you're a "Certified Deemed-Compliant Sponsored, Closely Held Investment Vehicle", which doesn't have a definition in the guide!
Did you read the part of the form to which those instructions apply? Those checkboxes are part of the FATCA Status section. Isn't it clear that you are to look at the FATCA regs for additional definitions?
Don't forget that this is for a random one-man business in another country doing a $100 job for a US client. The cost of what you're suggesting is completely disproportionate to the value of the transaction.
> Isn't it clear that you are to look at the FATCA regs for additional definitions?
Not at all. The form tells you to look at the instructions, not the FATCA regs. I have no idea what FATCA regs are or what FATCA even is. That's just more obscene over-complication.
Yes, the IRS does dump a bunch of jargon on you and leave you to Google it. "Google" here means searching the laws and regulations but probably Google itself because it's easier.
The French tax system is pretty simple. Taxes are high, but simple. The website you use to file your taxes is also pretty simple, and every single field has a button that explains what it is about and in which cases you should write stuff inside.
The only annoying parts are if you have accounts outside of France, you have to declare them. And if you get dividends/capital gains in foreign currencies outside of the EU, you have to calculate yourself how much tax you owe using a bunch of tables per country and currency.
For details about why RSU vesting requires 4 years of MI taxes, see https://news.ycombinator.com/item?id=43676698
Decade later the US lost most of its soft power due to the abuse of its dominant military and economic position in the world and then lost its dominant position too with the rise of the economies around the world.
People now see the US as a strong state on the lands of native Americans on the continent called North America.
https://www.irs.gov/e-file-providers/free-file-fillable-form...
As for "having most of your tax information", they don't. They know your reported income. You see that on your W2s/1099s/etc. What they don't know is whether or not you had a kid this year, or whether you lost a kid this year, whether you got married or divorced, if your spouse is claiming the kids this year or not, the number or amount of your charitable contributions, whether you have deductible mileage expenses, or a million other things.
Would just relying on the information from your employers cover all possible edge-cases? No.
Would it dramatically simplify the process for (tens?) millions of people? Absolutely.
Countries like the U.S., Canada, the U.K. cannot easily do that without huge data-sharing reforms.
No? 2 more clicks and you are done.
Yes? 2 + nr of changes clicks and you are done. Took me an extra 5 seconds when my son left.
You can make your taxes as complcated as you want but for 95% of the population foling taxes takes a few minutes.
Another factor most people are ignoring is that state taxes are filed at the same time and each state has its own separate system. These third parties let you fill in and file both at the same time. It would be nice if the US gov did this too but it requires a total restructuring of the American system, and Intuit’s lobbying has nothing to do with why it hasn’t happened or for that matter why the tax codes looks like it does.
Not for most people. It’s a giant pain in the ass if you have bank accounts and want to file correctly.
If all you do is plug in your w-2 and pretend that’s your whole tax return and you don’t care about anything except the standard deduction, sure. That’s not correct for most people.
> state taxes are filed at the same time and each state has its own separate system
Can we stop pretending like this is a problem insurmountable for the federal government?
This idea that TurboTax can make this work but the government can’t is absurd.
Interest income from your bank account comes on a 1099 and it takes 30 seconds to add onto your 1040. I do it every year.
Again, you seem to simultaneously believe that nearly everyone has trivial taxes to file while believing that the government cannot reasonably support free direct filing for these people. I have to wonder how you reconcile these beliefs in your head. “I mean, this is so simple. Any moron can do it. But not the agency specifically responsible for handling trillions in tax revenue. Nah, too complex for them.”
> These aren’t wealthy people filing with CPAs. These are lower income folks who specifically benefited from the IRS direct file program.
Lower income people were not using IRS direct file. That’s would be the economically rational thing to do, but this is exactly the market the strip mall CPA target. They also offer advances. I have tried and tried and tried to get lower income people to use free or direct file. Virtually none are interested. They have “their guy” who is getting them a great refund.
I did not state otherwise. The point is that you are misstating the complexity of the typical tax return. It is not in fact “enter your W-2, take the standard deduction, and done” for most people, even for those with relatively straightforward taxes.
> Lower income people were not using IRS direct file.
I don’t think the IRS has released this data. I do know that direct file was specifically limited to simple cases though.
The web page has all this information, you say OK and you are done. There is not a single "figuring out" you need to do.
This is, of course, the case for 95% of the population. You can be in the 5% where your tax filing becomes very complicated. In that case, though, you give this to a CPA and the cost of this service is zero compared to the amount of euros you deal with.
In other countries there are such things as national citizen registries with domicile and familial information, this doesn’t exist in the US. If it did you could use that information to get much more of a start.
IRS should just have a public free filing solution for everyone. If you have complicated taxes or want to do your own filing, you can still do that.
That's not what we're talking about. What we're talking about is: "We did your tax return for you based on all the information reported to us. Please click 'OK' to complete your return for the year."
The US is not a county optimized to provide quality services inexpensively. It is a business optimized to maximize profits.
Also, Americans have to file both fed and state taxes (with different rules)
And if that weren't enough, you've go municipal taxes too, in a few places like New York and Detroit.
Basic taxes are trivial in the US if you just work to live, it is essentially one page. However, there is an extremely long and fat tail where the government has no way of knowing the correct details to compute your taxes. There are myriad subsidies and offsets that have to be accounted for, many of which depend on what State you live in.
If you earn a lot of money, like the tech people that frequent this website, you are much more likely to find yourself in that fat tail. It can become esoteric quite quickly. The Federal tax code has to accommodate the completely independent tax codes of all 50 States in a reasonable way.
Deductions can get esoteric if you sold a bunch of stock. Even then, not that bad.
There is a reason Americans spend staggering amounts of time and money on tax preparation. It is simple until it isn’t.
If you mostly have income from wages, interest, and dividends, your tax is hard to reduce using special provisions and your return is easy to file. If you have a lot of income from business investments, property, minerals, esoteric securities, gambling, etc., then you have more places where you can use these things, and your taxes are accordingly complex.
And options are worse.
Where I've worked, they withhold the necessary number of shares from RSU's and it just gets taxed as W-2 income. Then, it shows up with the taxed cost basis in Fidelity so you don't get double taxed when selling shares. It doesn't appear like they have to factor in travel into that equation - that's only for your salary.
As far as options, it was similar where I was receiving them. The only issue I ever had exercising options was when the company whose stock I was trading changed names, and then the IRS suddenly believed all those options were 0 cost basis and wanted a bunch of money. That took two rounds of letters and a call to HR to get sorted out. Granted - laws have changed since then - that fiasco was 18 years ago.
The same as where I work (Schwab though for me, not Fidelity). However, they don't track wash sales for me. Do they track wash sales for you? From what I understand, federal law tells brokers to track wash sales for regular stock purchases and sales, but not for stock from vested RSUs, but still requires the stock holder to track wash sales for stock from vested RSUs.
>It doesn't appear like they have to factor in travel into that equation - that's only for your salary.
My employer also doesn't generally track travel for the purposes of taxes. But the state laws say I need to do it and file taxes based on my tracking.
I definitely feel the RSU grantors are the customer here, not recipients like you or I.
Until it wasn’t.