💾 Archived View for tilde.team › ~michel › 2022-04-20-on-taxes.gmi captured on 2023-01-29 at 03:48:00. Gemini links have been rewritten to link to archived content
⬅️ Previous capture (2022-04-28)
-=-=-=-=-=-=-
This Monday was tax day here in the United States. It's normally April 15th, but since Washington, D.C. observes Emancipation Day, which got shifted from April 16th to 15th so it did not fall on a Saturday, the Internal Revenue Service was closed on Friday and everyone got a 3-day reprieve. Or was it really a reprieve?
I managed to file and also schedule payment for underwithholding on Friday anyway, which means I got to enjoy the weekend without procrastinating-while-worrying. The weather was nice for a change on Sunday, which allowed for a nice outing visiting friends.
The process really could be made simpler - at least for most taxpayers. The average time spent is a whopping 13 hours!
The Motley Fool: The Average American Spends This Much Time on Their Tax Return
(the grinding noise you hear is from all the taxpayers who are not citizens - lots of us around especially in tech hubs - at yet another headline lazily saying 'American'. Sigh).
Efforts to simplify this process, predictably, ran aground against active lobbying by the tax preparation industry:
Politico: Why filing taxes isn’t easy
So I guess we're stuck with this process. If you're a US citizen, even relocating outside the country does not help - your global income is taxed, though if you relocate to a higher-tax country with a tax treaty with the US, and only earn money in that country, you likely will end up owing the IRS $0; you still have to file (so your paperwork unfortunately will increase. Especially since under FATCA you have to report foreign assets over $50k!
IRS: FATCA Information for Individuals
Fun huh. The IRS is also really understaffed, which does not only mean large businesses and HNWIs find it even easier to dodge taxes, but also means there's a backlog of millions of unprocessed tax returns _from last year_. You really don't want to overpay, because your return might get delayed a long time.
So what would I do differently? Probably use the IRS' tax withholding estimator rigorously several every several months, and make sure we end up underpaying by a bit but not a large amount (so as to avoid a sticker shock when filing time comes round again).
Have a comment on one of my posts? Start a discussion in my public inbox by sending an email.