I have an Income Tax exam in the morning, so I can’t help wondering in what country would this be an easy A, if any. It certainly isnt in the US.
This might be more appropriate in IMHO, but how complicated are taxes in other countries? I’ve heard horror stories about how difficult it is to calculate value-added taxes (VAT) in Europe, but thats about it, and I have no idea how accurate the stories are.
And the worst part is that most of the minutiae in the tax code is there to help some interest group or another for (mostly) good reasons, but there is absolutely no rhyme or reason to it. Some deductions phase out at $100,000, some at $150,000. Some phase out at X percentage of AGI, some are tied to the CPI, and others appear to be based on what phase of the moon it is. And I am convinced that this was done on purpose to ensure job security for tax professionals. And that Congress hates us.
All of which is another reason I want to work in the non-profit sector. I definitely prefer 990s over 1040s and 1120s.
(And for everyone who has no idea what I am talking about, I apologize. And for those whom I reawakened their nightmares, I sympathize. I am so looking forward to the break.)
So are other countries as insane as ours when it comes to their tax code?
I am adamant that a flat tax would solve many, many problems. I’d be more than willing to pay a flat tax, knowing that Mr. $1,000,000 a year earner was also paying a similar percentage of his income to taxes. As it stands, those with money can afford tax diversions, whereas those living paycheque to paycheque cannot.
Hmm. My first post on here, and it’s about tax. Slightly disturbing; oh well! I’m actually a tax inpsector in the UK (and yes, i’ve heard them all already ) - I mainly do corporation tax, though I’m expected to know the ins and outs of income tax and capital gains tax stuff as well.
UK tax law is horrendous in its size and complexity. I joined the former Inland Revenue, now HM Revenue and Customs, back in 2003 after finishing uni. To become fully trained I spent half a week studying for three years (plus actual work applying it all, followed by 18 months proving I really can do it, honest. Still not finished that!)
I still have to look stuff up on a daily basis. Not surprising really, the volume of UK tax law has about doubled in the past 10 years (God bless Gordon Brown). There’s a stack of Taxes Acts printed on very thin paper on the shelf behind me which is about half a metre tall, and that’s just the legislation. There’s hundreds of years of case law, which occasionally gets consolidated into legislation, but usually not.
What makes our tax law so complex in recent years though is that a lot of the new stuff is specific anti-tax avoidance legislation, which sometimes works, oftentimes doesn’t.
So it wouldn’t be an easy ‘A’ in the UK either. (And I had to get 70% in all my exams just to pass them, no concept of grades! 70% at uni would’ve got me a first, dammit!)
I wish you luck in your exam… and my deepest sympathies!
I am British but now live in America. I find the US tax code much more complex than the UK one. In deference to richwilliamson I would point out that I left the UK over 10 years ago and have not had to fill in a “Gordon Brown form”.
An indication of the difference is that most people in the US use tax professionals to prepare their taxes, whereas I don’t recall any of my friends and colleagues in the UK doing that unless they were self-employed.
And in the UK you only have to calculate tax once, whereas the evil Alternative Minimum Tax in the US makes many of us calculate it twice (and you owe the higher amount of the two methods).
No joy in Australia either. Horrendous tax system here as well.
The only people that get out of it fairly lightily are individuals in full time employment, with minimal to no allowable deductions, and no investments. They can generally happily complete their tax return themselves each year.
If you even start to look sideways at investments, or workplace deductions & allowances, I would recommend a tax agent get involved.
This says nothing of the small businessman who must contend with GST (Goods & Services Tax), Payroll tax, Superannuation guarantee (not a tax per se but govt compliance required), etc, etc.
There are a few countries where the tax system is simple enough that most people don’t have to even file. The payroll deductions just match up to the actual tax due.
In the UK, the latter is the case for most people. I have private earnings to declare along with my regular salary, and I don’t have to do any of the calculations - provided I’ve submitted the self-assessment early enough, it’s all done by Inland Revenue, and the tax owed is deducted from the following year’s salary.
And yes, I’ve not heard of anybody using an accountant other than for full-time self-employment, or if they’ve got other complex and atypical situations.
Having seen more than a few US state and federal tax forms as part of my job, I actually agree our forms are simpler - hard to believe if you have to complete them for your own taxes, I’m sure, but I don’t thankfully, because I’m just an employee. IRS forms just look scary.
People can and do complete them without any professional advice though. Some of them even get it right too! But as has been said the main reason most people won’t need an accountant in the UK is that the majority don’t have to file a return at all cos it all comes in through their employer’s payroll. That has its own problems too though…
Anyway regardless of the forms, US tax law itself does seem just a tad complex to say the least, I’ve struggled badly to follow it on the rare occasions I’ve needed to refer to it. I guess it’s what you’re used to though - I also struggled to follow ours much more when I first started than I do now.
Dubai is crazy expensive (I am not renewing my residency when it expires). The traffic and the cost make it not worth being here any more. The tax situation however is good. But despite not having lived in the USA in over 5 years, I still have to fill out roughly 35 pages of tax forms each year… and it costs me over $2000 for a tax professional to do it.
1040, plus many schedules, S-Corp return, and a differnet foreign corp that has zero activity as it is a holding company for an apartment I own (only legal way to do it), plus foreign income forms - a total nightmare.
On top of that, I receive no services from the US gov’t.
) - I mainly do corporation tax, though I’m expected to know the ins and outs of income tax and capital gains tax stuff as well.