ONW
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so you want the IRS to somehow calculate the exact amount a person will owe over the course of year, for every person who pays taxes
Smaller Gubmint FTMFW!
so you want the IRS to somehow calculate the exact amount a person will owe over the course of year, for every person who pays taxes
Correct. Would it not be more accurate to use a withholding based of the actual taxpayer's tax to income ratio from the prior year as opposed a virtually arbitrary ratio purported to be the average of similarly situated people that doesn't take income or deductions into account in any way? Currently it is literally a wild guess.
Correct. Would it not be more accurate to use a withholding based of the actual taxpayer's tax to income ratio from the prior year as opposed a virtually arbitrary ratio purported to be the average of similarly situated people that doesn't take income or deductions into account in any way? Currently it is literally a wild guess.
Correct. Would it not be more accurate to use a withholding based of the actual taxpayer's tax to income ratio from the prior year as opposed a virtually arbitrary ratio purported to be the average of similarly situated people that doesn't take income or deductions into account in any way? Currently it is literally a wild guess.
so what about people on commissions or multiple jobs with overtime
It would be much more accurate for those types of jobs if the person's income was consistant from year to year. For those whose incomes aren't consistant from year to year, it wouldn't have any result that is different from what already happens now with respect to fluctuation, but the percentage utilized would be more accurate with respect to the person's deductions, so the impact should be less severe than what currently happens.
To clarify if you aren't following me, it would be a percentage taken out equal to the person's actual federal income tax obligation relative to their gross income, not a set dollar amount. So if their income dropped then their withholdings would drop as well, but using a more accurate percentage than the stab in the dark that is used currently.
How frequently would a change in income be calculated and the withholdings adjusted?
i think it's a noble goal, but 90% of people are idiots with respect ot money and taxes; this would just boil down to the IRS creating a bigger table that the taxpayer would have to babysit even more than they do now and would probably result in less taken than should be resulting in less refunds and more late tax payments
I think it would be easier. On each person's refund check or payment receipt from their tax prior year, print their withholding percentage for the current year. The person gives that to their employer, who adjusts the withholdings accordingly. To me that is easier than the "how many kids should I falsely claim I have even though it feels like I am lying" conversation that everyone has annually or when they start a new job. And the goal is to have everyone pay the appropriate amount, not give the IRS enough cushion so that they know they don't have to chase people.
At least as much as it does now (which is when you actually change jobs or income). But under my system you would also have an annual reconciliation with your reality, not just with an arbitrary table.
But I would have to notify the IRS if I get a promotion, have a kid, buy a house, get fired, etc. within what time frame?
Honest question.
to be honest, now that my wife finished her degree and got a real job we're in a situation where I owed taxes for the first time in our lives and I was pretty pissed off about the witholding situation. But I'm reading this discussion and have thought about it a bit and I don't really get the advantage to 2&2s system, other than the refund/amt owed would be smaller. I don't think the IRS would benefit in terms of less work and it seems like MORE work for the taxpayer. It might be more efficient, but I'm not seeing a ton of benefits.
My wife and I have owed taxes the last few years. Aside from having to spent a lot of time with our accountant, it's no big deal.
Pay your fair share, Doc.
It would appear he does so without complaining