How many hidden deductions are out there (and no one really talked to me about them).
I was shocked by two. First, laundry expenses – if you wear a uniform for work and wash it yourself (and it’s not everyday clothing), it’s totally deductible. Second, mileage deduction – if you keep a log (from apps like Milekeeper/MileIQ or other mileage trackers), every business mile can save you ~$0.65 x your tax rate (eg 15% federal + state)
We don’t have to do taxes, the vast majority of paid employees are PAYE (where the employer directly pays your taxes from your salary to the government before you see anything).
When I was self-employed, I had to do my taxes, though.
As someone with a degree in Maths, just let me say:
What an obscure, incomplete, useless bunch of nonsense, with no advice, clear definitions or useful guidance whatsoever to fill out a bunch of forms only intended for large companies (even if a sole trader) and hold you responsible if you make a mistake.
In the end, I worked out that the time I was spending on it, it was cheaper to just put a figure in the income box, zero everywhere else, and then just send it off.
Sure, I could have claimed for a travelcard here or a lunch there… it just wasn’t worth the effort, and the risk of getting it wrong.
Nobody ever questioned or audited my tax forms, presumably because people scamming you don’t just claim nothing back each time.
I could have hired an accountant, kept years of receipts, tried to justify them all etc. but it honestly wasn’t worth the effort. Doing it yourself is near-impossible, I would posit, unless your finances are that simple (and I was a consultant so I charged clients – all of whom were official government entities – got income and my actual costs were near zero anyway).
It’s centuries of archaic tax law, case law, exemptions, definitions that aren’t simply written down anywhere, and doing weird stuff to try to cheat the system. And, to be honest, it just wasn’t worth the hassle of doing so.
Nowadays you wouldn’t be able to do what I did, because they’d argue you were subject to IR35 (a law which requires people like myself to prove that they are working for multiple clients and not just one client who could just employ them normally via PAYE) and that’s a nightmare to navigate on it’s own.
Nowadays, if I wasn’t already a full-time PAYE employee, I’d just use an umbrella company and make them do all that nonsense and then treat me as a PAYE employee. It’d mean you’d lose roughly the same amount as paying an accountant, doing it yourself, etc. but without the risk of doing either – PAYE employees do not assume the risk of making mistakes with their tax, that’s on the company that employees them.
Now I sit on the backend of IT in a company that has almost exclusively PAYE employees and/or licenced contractors, and their payroll is just outsourced to a payroll provider for the same reasons.
The complexity, archaity, and lack of any formal definitions or proper guidance, plus the assumption of all risk associated with any mistakes, means I would never bother doing taxes for myself ever again, even if I was a millionaire who spent nothing and got simple income. It’s just not worth it. I’d start a company, have them do it all, and just be a paid employee.
That if you’re in the right income bracket, like not so poor that you made no income, but you made less than the average person, the government will actually GIVE you money. Like your refund can be more than you paid in taxes.
I was shocked how incredibly easy and simple it was and how it only took like 30 minutes maximum. I was shocked that so many people complain about not being able to do it when there are literally millions of youtube videos and tutorials online for free. I was shocked that everyone always wishes that school taught them about taxes when anyone who can read at a third grade level can figure it out by themselves with no effort.
So I was self employed and attending college at the time. I made maybe $50k or $60k (which was a lot more back then – this was 25 years ago). I was expecting to have all these deductions and credits for being in school and wasn’t thinking that I would end up owing a lot. I was shocked to find myself owing $10,000. It was a real eyeopener.
My wife and I both work. The first time I did our taxes I thought I got it wrong, because it was a lot. Turns out if you’re married and both working you need to make sure you’re withholding enough. I don’t know if it’s because we hit a higher tax bracket or what, but that year hurt.
My first job out of college, I’d see my withholdings from my weekly check, and realize I could have a less gross apartment and a less shitty car if I could just keep half of what they took out. And in April, I realized I wasn’t getting enough back to make up the difference. I was simply being taxed from kind of poor, to actually poor.
It made me a bit of an economic conservative until I finally got a job that paid enough that I didn’t mind the tax hit.
How easy it is to do taxes on your own with TurboTax. Until two years ago where everyone lost money. My husband and I now use someone because we don’t want to owe 2k to the government again. Bunch of sheisters.
At the time I low key though socialism and light communism might work in the US. Doing my taxes for the first time was like walking around blindfolded in a room full of rakes. Just waiting for those handles to come smack me in the nose.
Seriously, no one ever told me about filing taxes. I think it was a year or two before I filed for the first time. I was a teenager, and I thought I was going to be in so much trouble.
When i got into the upper bracket how much i owed the IRS haha . So next year I ahd to take away more from my check to make up for it . Luckily it was only 5k difference.
Basically not rich enough to get tax breaks and loops holes or poor enough to get anything back .
in Canada and wasn’t my first time filing tax, but first time filing tax as a couple and first time filing with dependent.
turns out Canadian income tax doesn’t give you much benefit as double income couple. you practically file income tax like you’re single (no additional deduction) if you have no deduction to transfer, with the only exception being you can combine donation deduction together and have bigger deduction than doing it separately.
having a dependent don’t give you more deduction either.
As someone with basic taxes, it’s so fucking easy. I used to take it to TD and really wonder wtf they were doing because it takes me 10 minutes and took them an hour + $50 lol.
What shocked me and continues to shock me is how much bullshit there is to sift through, and doing it by myself I’m very unlikely to catch all of the bullshit. I need to hire someone to do it, I guess, so they can deal with the bullshit, which to them is nothing short of a little picnic.
How much money we got back. We had transitioned from graduate students to salary careers and I was shocked how living on $20k a year it was such a scramble to pay any amount in taxes. Then making $60k total as a family we go lots of return. Of course our withholdings were too high which we adjusted but it was still a shock to have paid our fair share in taxes, get some $ back, and still be able to afford a middle class lifestyle. Of course this was like 15 years ago but I still feel thankful for our middle class lives. I’m worried that will change drastically in the near future.
Comments
How much of the money I earn that I don’t get to keep.
A lot of companies will make you a 1099 without your consent and expect you to work as an employee.
How many hidden deductions are out there (and no one really talked to me about them).
I was shocked by two. First, laundry expenses – if you wear a uniform for work and wash it yourself (and it’s not everyday clothing), it’s totally deductible. Second, mileage deduction – if you keep a log (from apps like Milekeeper/MileIQ or other mileage trackers), every business mile can save you ~$0.65 x your tax rate (eg 15% federal + state)
I think having to figure out your gross monthly income for rental applications is more sobering than taxes because it reflects everything taken out.
Wait, we have to do our own taxes?
How easy it was compared to how big a deal people made of it.
I’m in the UK.
We don’t have to do taxes, the vast majority of paid employees are PAYE (where the employer directly pays your taxes from your salary to the government before you see anything).
When I was self-employed, I had to do my taxes, though.
As someone with a degree in Maths, just let me say:
In the end, I worked out that the time I was spending on it, it was cheaper to just put a figure in the income box, zero everywhere else, and then just send it off.
Sure, I could have claimed for a travelcard here or a lunch there… it just wasn’t worth the effort, and the risk of getting it wrong.
Nobody ever questioned or audited my tax forms, presumably because people scamming you don’t just claim nothing back each time.
I could have hired an accountant, kept years of receipts, tried to justify them all etc. but it honestly wasn’t worth the effort. Doing it yourself is near-impossible, I would posit, unless your finances are that simple (and I was a consultant so I charged clients – all of whom were official government entities – got income and my actual costs were near zero anyway).
It’s centuries of archaic tax law, case law, exemptions, definitions that aren’t simply written down anywhere, and doing weird stuff to try to cheat the system. And, to be honest, it just wasn’t worth the hassle of doing so.
Nowadays you wouldn’t be able to do what I did, because they’d argue you were subject to IR35 (a law which requires people like myself to prove that they are working for multiple clients and not just one client who could just employ them normally via PAYE) and that’s a nightmare to navigate on it’s own.
Nowadays, if I wasn’t already a full-time PAYE employee, I’d just use an umbrella company and make them do all that nonsense and then treat me as a PAYE employee. It’d mean you’d lose roughly the same amount as paying an accountant, doing it yourself, etc. but without the risk of doing either – PAYE employees do not assume the risk of making mistakes with their tax, that’s on the company that employees them.
Now I sit on the backend of IT in a company that has almost exclusively PAYE employees and/or licenced contractors, and their payroll is just outsourced to a payroll provider for the same reasons.
The complexity, archaity, and lack of any formal definitions or proper guidance, plus the assumption of all risk associated with any mistakes, means I would never bother doing taxes for myself ever again, even if I was a millionaire who spent nothing and got simple income. It’s just not worth it. I’d start a company, have them do it all, and just be a paid employee.
[deleted]
All the stuff i could buy with that money
That if you’re in the right income bracket, like not so poor that you made no income, but you made less than the average person, the government will actually GIVE you money. Like your refund can be more than you paid in taxes.
That i had only to pay £1 tax for the year as i was £5 over the minimum tax threshold. Seems to happen every year 🤪
I was shocked how incredibly easy and simple it was and how it only took like 30 minutes maximum. I was shocked that so many people complain about not being able to do it when there are literally millions of youtube videos and tutorials online for free. I was shocked that everyone always wishes that school taught them about taxes when anyone who can read at a third grade level can figure it out by themselves with no effort.
You basically get more money if you had kids, but the thing is I don’t want kids.
The amount of things that were interpretive/subjective instead of objective. God forbid you interpret something wrong…
How much we give it away to the government.
Really backed up my belief that taxation is legalized theft
My business did $200k, I took home $33k and my taxes were $6k. Setup to fail, but fuck em I wont.
The mere fact that I had to do them when the government already knows how much I owe them.or they owe me.
How stupid i was to pay someone. Then how outraged i was to pay to submit.
How stupid the entire tax filing process is.
The IRS knows the answer. Just process it all and give me back what I’m owed.
How much money they take. For my whole life they say people won’t get social security, but I still paid
So I was self employed and attending college at the time. I made maybe $50k or $60k (which was a lot more back then – this was 25 years ago). I was expecting to have all these deductions and credits for being in school and wasn’t thinking that I would end up owing a lot. I was shocked to find myself owing $10,000. It was a real eyeopener.
My wife and I both work. The first time I did our taxes I thought I got it wrong, because it was a lot. Turns out if you’re married and both working you need to make sure you’re withholding enough. I don’t know if it’s because we hit a higher tax bracket or what, but that year hurt.
My first job out of college, I’d see my withholdings from my weekly check, and realize I could have a less gross apartment and a less shitty car if I could just keep half of what they took out. And in April, I realized I wasn’t getting enough back to make up the difference. I was simply being taxed from kind of poor, to actually poor.
It made me a bit of an economic conservative until I finally got a job that paid enough that I didn’t mind the tax hit.
There’s something called “exempt” if you don’t make squat. Funny and depressing at the same time.
How easy it is to do taxes on your own with TurboTax. Until two years ago where everyone lost money. My husband and I now use someone because we don’t want to owe 2k to the government again. Bunch of sheisters.
That “standard deduction” always ends up what I take and trying to get cute with all my receipts doesn’t matter.
At the time I low key though socialism and light communism might work in the US. Doing my taxes for the first time was like walking around blindfolded in a room full of rakes. Just waiting for those handles to come smack me in the nose.
That I had to do them at all.
Seriously, no one ever told me about filing taxes. I think it was a year or two before I filed for the first time. I was a teenager, and I thought I was going to be in so much trouble.
The thing that shocks me the most is how many people on here act like they give a bunch of money to the government and get nothing back for it.
When i got into the upper bracket how much i owed the IRS haha . So next year I ahd to take away more from my check to make up for it . Luckily it was only 5k difference.
Basically not rich enough to get tax breaks and loops holes or poor enough to get anything back .
That they already had the information and I was essentially just double checking the work but as an amateur doing it for professionals.
in Canada and wasn’t my first time filing tax, but first time filing tax as a couple and first time filing with dependent.
turns out Canadian income tax doesn’t give you much benefit as double income couple. you practically file income tax like you’re single (no additional deduction) if you have no deduction to transfer, with the only exception being you can combine donation deduction together and have bigger deduction than doing it separately.
having a dependent don’t give you more deduction either.
As someone with basic taxes, it’s so fucking easy. I used to take it to TD and really wonder wtf they were doing because it takes me 10 minutes and took them an hour + $50 lol.
My first time was 1986. I went to the library and got a paper form. I was 16 in the entire process took me 30 minutes to fill it out and mail it in.
Then I got to check for something like $11 a few months later.
I thought the system would catch it if I made a mistake. Or that if I later caught it, I’d be given a chance to rectify it. Fuckers.
I don’t do my taxes bro, you must be Murican
That if you do it wrong the irs will let you know and give you a retry.
It’s a no brainer
What shocked me and continues to shock me is how much bullshit there is to sift through, and doing it by myself I’m very unlikely to catch all of the bullshit. I need to hire someone to do it, I guess, so they can deal with the bullshit, which to them is nothing short of a little picnic.
It’s so easy and so many criticisms about public school are like:
“Hey teacher can you teach me how to file taxes?”
“No, but… (insert useless thing you learned in school here)”
SO stupid. It’s so easy and uneventful. Hopefully teachers aren’t wasting my kids time teaching them to copy and paste numbers in boxes.
I mean, not shocked that I had nothing to pay
The fact that even though I was living and working in another country they still expected me to file.
The first time I did my taxes I was shocked at how many forms there were! It felt like a maze.
The fact that 14 year-old me didn’t make any mistakes when filing.
How much money we got back. We had transitioned from graduate students to salary careers and I was shocked how living on $20k a year it was such a scramble to pay any amount in taxes. Then making $60k total as a family we go lots of return. Of course our withholdings were too high which we adjusted but it was still a shock to have paid our fair share in taxes, get some $ back, and still be able to afford a middle class lifestyle. Of course this was like 15 years ago but I still feel thankful for our middle class lives. I’m worried that will change drastically in the near future.
How easy it was.
It was a sheet of paper to fill out. That was it.
When I was a tutor, I had to pay an additional “self employment” tax, even though I made very little.
how easy it was.