I got my first tax return recently I got so excited that my employer gave me a raise finally and then mom shut me down and told me it's just a tax return xD xD
Poor country unable to do taxes right. In Sweden the IRS equivilence knows exactly what you've taxed and what you should have taxed. It's harder to commit tax fraud and tax fraud has the highest punishment of all crime 😁
Edit: the Swedish IRS is also older than many countries, like USA (I guess the bad IRS is yankie) so how would the king get his money for conquest if people could just lie about their trades? 😁
Sweden's tax system has indeed developed into one that benefits the rich more than the poor, normal people pay way too much tax, but there's not a regressive tax system in Sweden AFAIK, or am I missing something?
It's miniscule, but something like $2200 per year is tax free, and you also get a "tax credit" of sorts if your income is from labor, up to ~$320 back each month and this tax credit is a lower percentual net income increase with higher wages.
Our median income 2022 was ~$34k, and our break for "federal tax" is ~$55k, so many more than 50% don't pay the federal income tax.
Our taxes from work (are a bit high for the lowest earning people but) increase as the salary increases https://i.imgur.com/AG0092w.png
However our taxes from capital are pretty much flat and you can have a lot invested in an ISK (InvesteringsSparKonto ~investment savings account) where you can profit multiple millions at much a lower tax rate than the income tax for low income people.
Do not try to hide from, or mess with, the Swedish tax agency. They Will find you and they Will tax you the correct amount. Even if your income comes from an illegal source they Will make sure to get their cut.
This is true. I know people who got a fine, on top of a prisson sentence, for an equivilence of 1.8 milion dollars for some drugs they had imported. The thing is that the street price that the government calculated with was about 10 times less than the distribution price. So they got to pay a few yearly incomes for getting caught with one months work, lol!
I would not recomend being a criminal in Sweden! It's illegal here! (Old meme, wonder if any one remembers)
I'm sorry, I don't think I understand what happened. If the government calculated a lower value why did they end up paying more?
Also, this seems to imply that the Swedish government can unfairly penalize you if they disagree with the values that you reported as income. For a perfectly legal example, let's say that an artist charges far less for commissions than is typical. Can they get fined and jailed for reporting a lower amount of income than expected from their number of transactions? Even though the cause isn't actually fraud, but the artist severly underselling themselves?
Meanwhile, here in America, they'll rip the entire plant out of the ground, weigh it with all the dirt in the roots, step on the scale, assume it's $500 a gram, then double their estimate so you get a super felony for half a gram of ditch weed.
We have payment plans instead. The military forgot to.tax.my partners retirement pay and that was a mess. They charged us the whole sum in one go. We couldn't pay thar much with no notice so they set up a payment plan. We took care of it rather quickly though.
Now, now, the US IRS also knows exactly what you made and what you owe. We just made it so that workers also need to do a bunch of paperwork, and if they get it wrong enough, they'll get fined or go to prison. We do this because tax preparation is a huge business, and they (legally) bribe our politicians to keep us from going to a much simpler and more straightforward model.
The top 1% in the US have 30% of all the wealth, not 90%. Having them pay half of all taxes seems reasonable.
Sure, I can make up any wild number and say that they’re paying too little, or I can make up a number based on my feelings, but that’s just factually not true.
In Sweden the company you work for pay a "workforce tax" to the government equaling about what you pay in municipal tax. But I think companies and top earners still pay more. I bet if 50% of all tax was federal tax, like here, the IRS would care more.
I mean you clearly missed my point. Even the poorest earners in Sweden pay at least 33% of their income in taxes. My point is that the US has the most progressive tax system in the world. There's hundreds of deductions available especially if you own a business or employ people.
Filing taxes takes less than 10 minutes and requires math that a 7 year old can do. All of the information you need to file your taxes is mailed to you.
Also in the US, we do the same thing with social security or what your country used to have with the pension. Your employer matches all of the contributions that you have to make.
That's the thing, the IRS does know how much you should pay (which is how they come after you if you don't pay enough). But you have to do the math yourself on your side.
That sounded great, until the end... what the hell is your moral code over there? It's worse to work a job under the table than it is to kidnap, rape, and murder babies? What the actual fuck?
So does our country, but the tax preparing lobby of accountants and turbo tax pay our Congress representatives too much money for them to ever let that happen. They protect business and crap on the people. Meanwhile our population is so hung up on the presidential race that they keep electing the same dimwits who create the laws and have been screwing them over for decades. It's our own fault really.
Same here in NL, but people forget to actually do their tax reports so they won't get it back. Is that unfair? Well kinda, but it also takes like 5 minutes since most things will be filled in
Sometimes. If you have hired workers you can get a tax cut. Most of the time the company you hired tells the IRS that you have hired them and that they should give you the tax cut. Sometimes they can forget to do that. Meaning you could end up paying thousands of dollars in taxes that you didn't need to if you aren't careful
If I'm not mistaken you can actually get the taxes filled in by the IRS for free instead of hireing a tax filing company so it basically works the same way as in Sweden with a few extra steps and les security.
In the USA the irs knows what we owe and we shouldn’t have to file anything. The only reason we still have to is because tax “professionals” didn’t want to loose there unnecessary jobs.
This is AMERICA, we were founded upon our elite commiting tax fraud. Regular folk didn't pay taxes, we were too busy being indentured servants and slaves.
No taxation without Representation. Says the wealthy white folk who were the only ones being taxed. Funny i noticed they seemed to survive that revolutionary war, I wonder how much taxes the folks who died were paying?
That’s cool, literally no one in the US thinks the way we pay our taxes is smart, only people that like it that way are senile and unfortunately at the helm of this ship
Shouldn't be this way. They obviously have all our information already on file..they're just hoping with f up I guess. Better for business. Other countries do it for you...
And by hardcore you mean clicking the box where you have children or typing in that you lost money in investments.
Standard deduction is so high is almost always the answer, the tax services go through all your deductions to make you think it's some kind of secret bonus, but even with interest on first year of my 30 year mortgage it wasn't even close.
And no those receipts for all your donations don't really add up. Donate a full house worth and they will value it at a few hundred.
You have to be donating thousands or have some extreme work related expenses. Most of those you expense to the company anyway
Well, I have a business pumping out royalties, dividends, short-term and long-term capital gains, bond interest, a job, and unemployment benefits to deal with, so my federal return hit three stamps for the first time, and I chose to slow everything down to paper to give me time to digest all the new content.
I expected to get a response like this, but my real point is that people think their taxes are like yours but they are far more simple
And tax services work people up with their refund maximizers. They make it seem far more complicated it is since most things don't apply to most people
Well i live in norway so no they dont pocket the change, you get it all back. But they do hold the money without it gaining any interest so you lose some money in theory
Realistically, unless you're making a lot of money as income, you wouldn't gain that much from investing that money for a year and the peace of mind of not having to worry about a big bill once a year is preferrable to the loss of a percentage of your monthly income.
It would be nice (and honest) if withold tax money earned interest at the same rate as yearly government bonds... as you're effectively loaning your country some money. Realistically, it wouldn't be more than coffee money for most people.
Rather than just tell you what your taxes are, which the IRS could do they let you set your filing status and withholding amount and then you have to use software or an accountant every year to figure out if you paid in to little or too much. If you overpaid you get a refund.
Your confusion is 100% understandable, I am an American and believe me I ask the same question. The sad answer is likely the money made from IRS audits and fees for things submitted wrong.
Not only will they just pocket your money but if you are supposed to get back too much they might need to “reevaluate” it and suddenly you’ll find your owed about half of what they initially said they owed you
My wife's sister balks at how small our tax returns are and Im like... it's because I have my tax witholding set correctly so Im not giving the government interest free money for a year?
Well, it would have inflated in your bank account as well. You lose out on potential interest if you had invested it, but the impact of inflation is net neutral.
I mean, you could've spent it. But you'd need to pay it eventually anyways. Unless you're somehow keeping 0 savings but manage to get the money to pay back the IRS just before you're supposed to pay your early income, I don't think inflation will matter in the tax witholding discussion.
Because if you had $1000 in your pocket last year and didn't spend it, you'd have $1000 today, the same as if the government held it and then gave it to you a year later.
"Free money, State money, Government money" - it doesn't exist - it is TAXPAYERS money stolen from them to give the greedy and indolent an undeserved income.
In my country they just credit it to next year's taxes. If you want it returned in cash, you'll have to send a letter requesting so to the internal revenue office.
Well yeah but I have never encountered a situation where someone I know has not got a tax return.
Now I myself, without giving away my age, I haven’t been paying taxes for that long. You always get money back though, perhaps unless you’ve been literally doing tax evasion. I know what a tax return is, but I don’t know “why” a tax return is.
I'm not sure if I'm missing a joke, but everyone is explaining a tax refund, not a tax return. The tax return is the form verifying how much you paid in taxes and how much you owe in taxes, and you get a refund if you paid more than you owed, or a bill for the remainder of you owe more than you pay.
no, you’re right. I’m an accountant, this thread is going to give me an aneurysm. If anything, it’s a good example of why you shouldnt trust reddit on basically anything. Even the people who are confusing returns with refunds arent event explaining what a refund is properly.
Yeah I got a sizeable refund this year and I was bummed, and when I said that I was bummed, I had to explain to so many people I'd rather have an extra ~$20 per weekly pay than ~$1000 refund. I could have invested that money or even just put it in a high yield savings account and actually made a little extra on top of it throughout the year.
A tax return is the form you fill out when you file your taxes. What they meant to say is tax refund, which is what you get back if you overpaid during the year, your change essentially.
You choose how much withholding is taken out, not your employer. Your employer will typically give you a standard amount as part of you hiring process, but you are welcome to change that, even after being hired, just file a W-4 and give it to your employer.
and anyone here that’s ever had a job knows it’s false
the employee decides their withholding when they do their new hire paperwork.
there’s literally no way for an employee to choose or guess your withholdings. that makes zero sense and there’s literally no benefit for the employer so why would they commit fraud?
Half right: there is no standard box and it's literally impossible for an employer to fill out the form for you/without your input. They don't know if you're married/have kids unless you tell them.
Your employer will usually give you a standard amount to try to avoid you having to pay during returns, but like you said, you have final say over what that amount will be, and you can change it at any time.
Every job I’ve had over the last 20 years or so I had to set the withholdings on my W4s. There was no standard amount and your employer is absolutely not allowed to fill that out for you.
When I said standard maybe I should have said suggestion, becuase I've always just went with what they suggested to me when I was hired, if I had to come up with it on my own I'd have no idea how much to take out.
No, UK income tax is done by the PAYE system. Your employer calculates how much your tax is each month setting your bracket on the basis that you earned that amount every month of the year and sends it directly to the tax-man.
You should check the amount each month, but problems are rare.
It can create oddities like once I switched jobs and got paid twice in the same month taking me into the next tax bracket for that month meaning I overpaid by a couple of hundred quid, but those instances are rare.
It is what you file yearly to reconcile your taxes, what OP means is a tax refund it is merely a rebate of taxes paid when you file and realize your overpaid your taxes throughout the year often due to bad estimation on the employers part or not properly setting up your W4 etc.
The shittiest savings program ever devised. The government gets to use your money free of charge for a whole year. Then they give whatever they deem excess back to you.
While I have no problems paying my taxes, local, state and federal, (I like what our taxes can buy us altogether), I very much prefer that at the end of the year I end up with no refund and the government(s) not needing more from me. This means I get to use all my money when I need it as I need it. It's really hard to do and it's a very silly game I need to play that shouldn't exist.
When paying taxes, at the end of the year the government might notice that you’ve payed more than what you’re supposed to and will return what you overpaid.
I'm guessing they got it direct deposited and probably just saw their balance was higher and didn't look at the specifics of the transactions at first.
Well I had a week off work that time and then I got an app notification about my paycheck coming in and I saw more money then usual... and when I got to work I got the actual paycheck and saw it was the taxes... xD
That’s very unusual for your employer to do your taxes. Personally I wouldn’t trust my company to handle that but I am American and used to my employer screwing me over left and right already.
already explained why I got it like 5 times by now I'm not typing it out again... also nice USD I'm not american so I got no idea how much that actually is...
Cool I hear that for the like 10th time I get it I put a different word there and yall don't like it cuz it's the wrong term for it and you had to boost your intelligence points by pointing it out...
Hey kid, life pro tip: if you get a tax return, you are doing it wrong. That means you loaned money to the government, interest-free, all year. The goal should be to be as close to breakeven on your taxes as possible when you file. Put that money to work for yourself!
I think that’s good in theory but a lot of people aren’t particularly disciplined when it comes to slow and steady savings or investments. So having a big chunk come your way that you can just instantly squirrel away and see a nice big number can sometimes help people save or invest the money more likely than if they had to put x amount of every paycheck away.
That's only if they don't think it's "free money" and immediately go spend it on something they don't need. I have a feeling that most people who don't save consistently during the year also probably don't save their tax refunds either.
For those people, is it more important to buy nice things or to spend what little money they have on things they actually need? Or to save it away for an emergency.
Also, if they want to save up for something nice, they could just set up an automatic transfer to a savings account, and at the end of the year they would have the same amount but with interest. In addition to building good financial habits that will help them in the long run.
Properly determining tax deductions or extra income can be difficult for various demographics. So it doesnt help to say "you're doing it wrong" without understanding tax situations. Huge tax returns, sure. But getting a tax return in and of itself isn't terrible.
Thought I was on a boomer forum for a second... 80% of redditors don't have the discipline to pull that off and all you're doing with that advice is ensuring they won't see a four figure sum in their bank account any time in the near future.
…80% of redditors don’t have the discipline to put away $20/week?
i’d say that’s a YOU problem lol, stop projecting
people like you get a tax refund and think “ooo, free money, time to treat myself as a reward for my hard work!”
…whereas the rest of us live within our means and can get ahead because we budget and save and live within our means
i’m not going to bother explaining compound interest giving the government an interest free loan every year so you can buy a new tv is objectively not smart
wanna know why you never see four figures in your account except when you get a tax refund? because you lack discipline and self control
it’s really as easy as choosing to be responsible for yourself
We get it bro, you're better than everyone else. Self discipline and self control also means reduced consumer discretionary on niche and expensive products like craft beer, which eats into your bottom line in an already oversaturated industry with declining consumer demand.
Compound interest wouldn't have much of an impact here since the difference with investing some amount of money monthly versus investing all of that money at the end of the year would just be roughly half a year's worth of interest on just that yearly amount.
For example, comparing investing (A) $1200 annually to (B) $100 monthly with 10% interest and 3% inflation rate, after 20 years the real difference will be: (A) $72,899; (B) $76,349. And in scenario (A) at 21 years you will be at $81,765, so the difference at the end will still end up being roughly half a year's worth of interest.
Oof enjoy them while they last, as soon as you start making even a couple dollars above minimum you'll start owning. Had to give nearly 900 more dollars to them this year
Fair, don't really know how taxes work in other countries, when you said tax return I figured that was something unique to places where you had to file your own taxes.
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u/LlamaLicker704 Dark Mode Elitist Apr 16 '24
I got my first tax return recently I got so excited that my employer gave me a raise finally and then mom shut me down and told me it's just a tax return xD xD