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Comment by baxtr | Hacker News Reader

In Germany, many people don’t need to file taxes, as they’re deducted anyways. But you can and it usually saves you some money. If you do though, it’s about as complex as in the states, the only difference being that there is only one form you’d need to fill and not 2-3 (federal, state, city)

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This is true for employees without additional income on the side. If you have this, you are obligated to file and have a tighter deadline.

Also, the set of forms is a monster. There is a simple-looking main form with four pages, but you usually need two or three of the appendix forms as well (there are ~10 different appendices, some of which can be required multiple times). This still hides the true complexity of German tax law. Almost every field in every form has a stupidly long list of rules and exceptions attached.

Even as a single and empolyee, I need to fill out a few appendices (or rather my tax advisor does) plus a big set of of copies of proofs for the data in the forms (usually between 20 and 40 pages).

My impression is that "US taxes are complicated" arises from the fact that they have such a wide variety of possible tax deductions and tax credits, each with complicated conditions and rates. For medical expenses, moving expenses, training expenses, for various personal purchases that you use for work, for solar water heaters, and so on.

If you earned salary from one employer and used only a few standard deductions, then filing US taxes should be easy as well.

I’m a Canadian who has filed taxes in Canada (file like the US, but it’s simpler), the UK (no filing necessary if you only have interest and employment income) and the US.

One of the other complications with US taxes is that payroll systems and the exemption formula make it hard to get your deductions exactly right (this happens in Canada too), because you have to be able to exactly predict your annual income. In the UK the “Pay As You Earn” system deducts exactly what’s needed as you earn it. Even interest payments from the bank will have a line item for withheld taxes.

How do different entities determine your current tax rate for correct withholding? Say your interest payments from the bank — does the bank consult the tax authority to determine the correct rate? Similarly, how does it work if you have two employers?

Second, in a graduated income tax system, this would result in decreasing take-home pay over the course of the year. Does that not cause some confusion/strife? Seems like plenty of people struggle to budget beyond paycheck-to-paycheck as it is (in the US).

EU country: My employer reports my salary and already paid my taxes for me, deducted from my pay check. All banks report what I paid in interests on my loans and how much interest I got paid on my savings accounts. They also report what profits I made from funds and whether I sold any at a profit (in which case they deducted and paid the tax on those profits).

The rates are fixed for most kinds of income that entities other than employers are concerned with. So a bank can deduct the dividends tax easily. Tax brackets for salary taxes exist, but so long as you have one employer only, and don't suddenly get a massive pay hike/cut, they will know your yearly income and can deduct given the correct bracket. There is no decrease in take-home pay and no confusion (I honestly didn't quite understand where the confusion would arise?)

If too much or too little has been paid for the whole year, that's simply mentioned at the bottom line of your prefilled online tax return form.

> Tax brackets for salary taxes exist, but so long as you have one employer only, and don't suddenly get a massive pay hike/cut, they will know your yearly income and can deduct given the correct bracket. There is no decrease in take-home pay and no confusion (I honestly didn't quite understand where the confusion would arise?)

That's pretty much identical to US withholding. As long as your employer can easily predict your annual wage income, that part is withheld basically correctly. If you change jobs or experience an unusual bonus or hold multiple jobs, good luck.

> If too much or too little has been paid for the whole year, that's simply mentioned at the bottom line of your prefilled online tax return form.

Yeah, that's similar to the US, except the prefilled form isn't always online and is called a W-2. It is copied into the actual filed 1040 document and withholding is credited against your taxes owed.

The grandparent post claimed: "One of the other complications with US taxes is that payroll systems and the exemption formula make it hard to get your deductions exactly right (this happens in Canada too), because you have to be able to exactly predict your annual income. In the UK the “Pay As You Earn” system deducts exactly what’s needed as you earn it." (My emphasis added.)

That comment (and the name) suggests that — unlike the US — the UK withholds at the rate of your exact current tax bracket. If that's true (perhaps I am misreading it), your take-home pay would decrease as your tax rate increases over the year, assuming your gross pay is split evenly across pay statements.

That does seem confusing (unless the gp was formulated incorrectly). Most tax systems have some progressivity such as a large base deduction which could effectively make your first salary tax free and quite possibly make the last one of the year be taxed at over 50%. It would be confusing to say the least. I'm guessing the GP was just poorly formulated and that doesn't happen and "exactly what's needed as you earn it" is still involving at least a multiplication with 12 as the prediction for yearly income from monthly salary.

> If you earned salary from one employer and used only a few standard deductions, then filing US taxes should be easy as well.

And it is. Doing your taxes by hand on paper forms in that scenario would only take about 15 minutes.

Same in the UK. I think it's probably like that in most countries.

>Same in the UK. I think it's probably like that in most countries.

I can confirm for Italy, it is the same, for very, very simple situations (employee or retired) the government provides a pre-filled tax form, with the addition, since a couple years that some (not always correct though, yet) medical expenses (that can be subtracted) are already filled in.

As soon as you have some other source of income (or some extraordinary expenses) you actually need an accountant/consultant.

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