Author Topic: "Doing your taxes"  (Read 3665 times)

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MummyPumpkin83

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Re: "Doing your taxes"
« Reply #30 on: June 01, 2014, 07:21:56 AM »
So here in Australia we pay taxes to the federal govt. States don't tax your income.

You can pay an accountant to do your tax, or you can download the free Australian tax office e-tax software and do it yourself.

Tax is withheld from each pay and after the 30th June (last day of the financial year) you get a payment summary/group certificate from your employer/s that lists your income abd tax withheld for the previous 12 months. You enter these amounts, plus other figures as prompted by the software, then submit online. If you are entitled to a refund it will be deposited into your bank within 2 weeks. If you owe you get a few months to pay it back.

 Taxes are due by 31st October, but you can ask for an extension.
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iridaceae

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Re: "Doing your taxes"
« Reply #31 on: June 01, 2014, 07:39:09 AM »
You can ask for an extension in the US as well.

Although most people use April 15th as their income tax day you can set up a different day as long as you fill out all the paperwork and jump through all the hoops.

Margo

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Re: "Doing your taxes"
« Reply #32 on: June 01, 2014, 08:26:44 AM »

What happens in the UK and similar places if someone makes more money than predicted during the year? Or is the tax rate the same for everyone?

For PAYE (Pay As You Earn) the tax it deducted month by month. It is the employer's responsibility to work it out and pay the tax. Tax rates change at different levels of income, so if you have two jobs you have to make sure your employer knows so that only one of them takes into account you tax free allowances.

If you have filed a tax return then you pay the tax in installments, part of which is on account the new year and is estimated based on your last year's return - so if your income goes up then your payments on account will be low, and you'll pay more the following year.

Slartibartfast

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Re: "Doing your taxes"
« Reply #33 on: June 01, 2014, 02:02:28 PM »
There's also a mistaken belief that some percentage of Americans don't pay tax at all - the percentage changes depending on who's telling it, but it's really not true.  We have several different tax structures, so while it's true that some people don't owe net income taxes, everyone pays sales tax and taxes on utilities, phone bills, etc.  The confusing part is how the US government flat-out writes off a chunk of potential tax for everyone - if you have a low enough income, the part the government says "nah, it's cool" may be more than what you were supposed to owe.

Ceallach

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Re: "Doing your taxes"
« Reply #34 on: June 03, 2014, 02:30:52 AM »
There's also a mistaken belief that some percentage of Americans don't pay tax at all - the percentage changes depending on who's telling it, but it's really not true.  We have several different tax structures, so while it's true that some people don't owe net income taxes, everyone pays sales tax and taxes on utilities, phone bills, etc.  The confusing part is how the US government flat-out writes off a chunk of potential tax for everyone - if you have a low enough income, the part the government says "nah, it's cool" may be more than what you were supposed to owe.

Australia is kind of the same - there is a "tax free threshold" under which income is not taxed.   So the first $x amount of our earnings are tax-free.    And if you are earning under the $x amount then you don't get taxed at all, although yes of course you are still paying sales taxes and things like that, just not paying income tax!

You can actually choose not to claim the tax-free threshold as you go, meaning you get taxed a full/higher amount from each pay (the amount your employer is required to deduct), but then when you do your tax return at the end of the financial year you would get a big chunk back as you'd have been taxed on the income that didn't need to be taxed.   For most people this wouldn't make sense though, as best to have that money in your own pocket all year than let the government borrow it!   ;D
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Margo

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Re: "Doing your taxes"
« Reply #35 on: June 03, 2014, 03:39:48 AM »
Same here in the UK. The first 10,000 of income is not subject to income tax, then after that it is taxed at 20% on the next 30,00 or so, and at 40% above that. But those who don't earn enough to pay income tax are still paying VAT, tax on fuel etc.  No one pays nothing at all in tax.

paintpots

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Re: "Doing your taxes"
« Reply #36 on: June 03, 2014, 06:19:44 AM »
I'm in the UK and I do both - receive PAYE from my employer (which sorts out my pension contribs, student loan repayments and national insurance/income tax payment), and I fill in an annual tax return to declare some additional income I receive. PAYE on its own is worked out on a simple code based on information you provide to your employer. I don't qualify for any breaks so mine is quite simple.

I quite enjoy filling in the tax return! My additional income is quite straightforward and I don't find the forms too difficult, it's more getting all the paperwork together. All I need to do is declare everything I've 'earned' (including bank account interest, although this is all taxed at source by the banks, so it's just to check which tax band I pay at). I file online and they write to me to let me know how much additional tax I owe, which they take from my salary through the PAYE system by adjusting my tax code (essentially they reduce my tax free sum, 10k, by the amount I owe).

If you earn over a certain amount (I can't remember how much) you have to do a tax return in the UK, but for the most part (and for most people) they take tax at source:
VAT - sales tax
Council tax - paid monthly to council via direct debit
Income tax - taken from salary at source
Savings account interest/dividend income - all received post tax.

WolfWay

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Re: "Doing your taxes"
« Reply #37 on: June 03, 2014, 07:55:02 AM »
I'm in the UK and I do both - receive PAYE from my employer (which sorts out my pension contribs, student loan repayments and national insurance/income tax payment), and I fill in an annual tax return to declare some additional income I receive. PAYE on its own is worked out on a simple code based on information you provide to your employer. I don't qualify for any breaks so mine is quite simple.

I quite enjoy filling in the tax return! My additional income is quite straightforward and I don't find the forms too difficult, it's more getting all the paperwork together. All I need to do is declare everything I've 'earned' (including bank account interest, although this is all taxed at source by the banks, so it's just to check which tax band I pay at). I file online and they write to me to let me know how much additional tax I owe, which they take from my salary through the PAYE system by adjusting my tax code (essentially they reduce my tax free sum, 10k, by the amount I owe).

If you earn over a certain amount (I can't remember how much) you have to do a tax return in the UK, but for the most part (and for most people) they take tax at source:
VAT - sales tax
Council tax - paid monthly to council via direct debit
Income tax - taken from salary at source
Savings account interest/dividend income - all received post tax.
Pretty much the same system in South Africa as well. We have the option of doing our taxes entirely online and since mine are simple taxes, it takes me about 10 minutes to do it myself. I just log onto the tax system, check my statement is right with all the numbers supplied by my employer (as compared to the tax certificate my employer gives me to compare it against), put in how much I pay for health insurance (since a certain amount it tax deductable), and then submit it.

I usually get a certain amount paid back to me each year.
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Ms_Cellany

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Re: "Doing your taxes"
« Reply #38 on: June 03, 2014, 01:53:38 PM »
And for added complexity, there's same-sex marriage. After the recent Supreme Court decision that struck down part of the Defense of Marriage Act, the federal government completely recognizes same-sex marriage.

The Sweetie and I did a little dance when we submitted our first joint tax return this year.

But some states have their own state-level income tax, which is usually based off the federal return. I don't know how same-sex spouses handle it when their federal return is based on shared marital assets, but the state returns must be done individually. (We live in Texas, which doesn't recognize same-sex marriage but has no state income tax.)
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TootsNYC

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Re: "Doing your taxes"
« Reply #39 on: June 03, 2014, 02:40:43 PM »
Quote
I don't know how same-sex spouses handle it when their federal return is based on shared marital assets, but the state returns must be done individually.

I'd think you'd do it the way you'd handle it anytime two people who aren't married own a home. I knew a brother-sister pair who owned a home together as grownups. There had to be a way of working it out.

Ereine

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Re: "Doing your taxes"
« Reply #40 on: June 03, 2014, 11:57:33 PM »
I'm in the UK and I do both - receive PAYE from my employer (which sorts out my pension contribs, student loan repayments and national insurance/income tax payment), and I fill in an annual tax return to declare some additional income I receive. PAYE on its own is worked out on a simple code based on information you provide to your employer. I don't qualify for any breaks so mine is quite simple.

So do you have to give your financial details (if they affect taxes) to your employer? Here all the employer knows is the salary they pay me and though it's my responsibility to keep on top of my taxes (I work full time at the moment and do freelance work that's unpredictable so I should keep my tax rate limits in mind) I think that I prefer that.

WolfWay

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Re: "Doing your taxes"
« Reply #41 on: June 04, 2014, 12:30:04 AM »
I'm in the UK and I do both - receive PAYE from my employer (which sorts out my pension contribs, student loan repayments and national insurance/income tax payment), and I fill in an annual tax return to declare some additional income I receive. PAYE on its own is worked out on a simple code based on information you provide to your employer. I don't qualify for any breaks so mine is quite simple.

So do you have to give your financial details (if they affect taxes) to your employer? Here all the employer knows is the salary they pay me and though it's my responsibility to keep on top of my taxes (I work full time at the moment and do freelance work that's unpredictable so I should keep my tax rate limits in mind) I think that I prefer that.
I can't speak for the UK, but in SA, our employers takes the PAYE directly off our salaries and pays it to the government directly. So I get a payslip that lists my total gross salary,  the amount of PAYE tax I've had deducted, and then my net salary, which is what I actually get put into my bank account.

Then when tax season comes around, my employer gives me a tax certificate saying "We paid you this much gross salary, of which XXX amount was paid to the government in PAYE". Then I log onto the tax website, check that my numbers match up to the ones the government has, put in how much I pay for medical insurance each year and boom, that's my taxes done.
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veryfluffy

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Re: "Doing your taxes"
« Reply #42 on: June 04, 2014, 04:59:42 AM »
It seems that in some countries you can deduct quite a lot of things from your taxes. In the UK, that is fairly limited. For example, everyone is taxed individually: you don't have deductions for children, or spouses or any dependants (there may be one or two very small exceptions, I think for very elderly couples, but this is usually in the form of additional allowances). You don't get to deduct mortgage or other interest. Pension contributions or charitable giving take the form of the government topping up the amounts with the tax you paid, so you don't get a deduction for those. It's very difficult to claim any amounts for work-related expenses if you are an employee.

I'm self-employed, with a very small business run from home, so I do have to file a return. But it's not complicated -- I probably don't even deduct everything I could, but I don't think tweaking the amounts would save me as much as it would cost me to get an accountant to do it.
   

paintpots

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Re: "Doing your taxes"
« Reply #43 on: June 04, 2014, 05:55:31 AM »
I'm in the UK and I do both - receive PAYE from my employer (which sorts out my pension contribs, student loan repayments and national insurance/income tax payment), and I fill in an annual tax return to declare some additional income I receive. PAYE on its own is worked out on a simple code based on information you provide to your employer. I don't qualify for any breaks so mine is quite simple.

So do you have to give your financial details (if they affect taxes) to your employer? Here all the employer knows is the salary they pay me and though it's my responsibility to keep on top of my taxes (I work full time at the moment and do freelance work that's unpredictable so I should keep my tax rate limits in mind) I think that I prefer that.
I can't speak for the UK, but in SA, our employers takes the PAYE directly off our salaries and pays it to the government directly. So I get a payslip that lists my total gross salary,  the amount of PAYE tax I've had deducted, and then my net salary, which is what I actually get put into my bank account.

Then when tax season comes around, my employer gives me a tax certificate saying "We paid you this much gross salary, of which XXX amount was paid to the government in PAYE". Then I log onto the tax website, check that my numbers match up to the ones the government has, put in how much I pay for medical insurance each year and boom, that's my taxes done.

They're done independently. My employer takes tax out of my salary (after deducting my pension contribution), every month and I never see that money. At the end of every tax year I get a statement from my employer (called a P60), which summarises everything - how much I've earned, how much tax I've paid. I have until the end of January the following year to declare additional income via  tax return (so for the tax year ending April 2014 I have until January 2015 to submit my tax return for the 13/14 tax year), for which I need to collect various statements from the bank etc. which say how much interest I've earned so that I can declare 'true' income (i.e. not just salary) which enables them to work out how much tax I owe. I then get a letter from them about a month later telling me how much additional tax I owe and explaining how they have adjusted my tax code (which my employer uses to calculate my tax).

Margo

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Re: "Doing your taxes"
« Reply #44 on: June 04, 2014, 06:32:22 AM »
Jut to add to what others have said - employers don't have any other info - if your fiances are complex enough that you are claiming other allowances then you are likely going to need to do a tax return in any event.

I now count as self employed so I do a tax return. Before, when I was on PAYE I didn't - I didn't earn enough to be a higher rate tax payer, so my salary, interest on my bank accounts, and the dividends on my shares were all taxed at source, and my pension company claimed back the tax on my pension payments.

Now, I am self-employed and also (some years) a higher rate tax payer so it is more complex but all goes on my tax return. I don't complete my own, as the accountants who deal with our business tax return do it.  I do need to let them have the relevant information. I don't think I would have any problem completing the forms myself if I had to.