Comment on Why do people say "my taxes"

• netvor@lemmy.world ⁨6⁩ ⁨days⁩ ago

  Generally if you are employee and all your income comes from single employer, your taxes are done by the employer and simply withheld from your paycheck. Some are paid continuously and then balanced (excess returned, never the opposite) some time in the spring, but as employee you don’t have to fill any forms. (With small exceptions – IIRC we had to sign one “pink” form every year, I don’t recall what exactly it was for.)

  For long time when I was employee I also had income from stocks, so then my employer did not have to do taxes for me so I had to do it on my own (ie. I used advisor.)

  If you are self-employed then it depends on the type of business license / trade and turnover: you may need to track every expense and then compute & fill form in April (this term moves to June if you use accredited tax advisor).

  There are also license types where you don’t need to keep expenses, you only need to report yearly income and tax based on that number. The license has a percentage number assigned and it’s just assumed that your expenses was that % of your income. When I was freelancing as a programmer, I used this kind of license. It was pretty comfy for me, even though i still used advisor since I can’t come close than 2m to a tax paperwork or I’ll star panicking :D

  Once you get past some turnover (i think it’s 2 million CZK per year–about $100k) you need to use more complex system which requires you to do extra papers/taxes related to VAT, plus there’s more tracking. (You need to track expenses precisely and keep the invoices/bills for some amount of years.) The rules are probably also different for different kinds of corporations, for some regulated trades, etc. For even larger businesses some of these are done half-yearly or quarterly.

  Social & health insurance (both of these are mandatory, ie. they are basically taxes) is paid separately from the above (for businesses. for employees this is still done by employers) as advance payment and then balanced based on your reported income. (Then there are several small taxes like public broadcasting, land taxes or city taxes, but those are usually really easy to pay, they are either same per capita, or in case of land taxes you just report your land size and the burreau will compute it for you and send you the bill.

  Of course there are also deductions based on whether you have kids, spouse, mortgage, charity gifts, etc.

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  • Today@lemmy.world ⁨6⁩ ⁨days⁩ ago

    Similar to ours, but everyone fills out a form (does their taxes) unless you make less than $15k/yr. When you’re hired you fill out a w-4 to say how many dependents you have which determines your withholding. This should work out to make your amount returned or account due in the spring close to 0. Trump’s big tax change that was advertised to give people more money, really just changed these charts so that many people got more money on their paychecks but then had to pay more in the spring.

    Anyone who has investments, self employed, or had anything other than a simple W-2 (the form you get from your employer in January that tells your earnings for the year) fills out more and more forms. Each of these forms adds more opportunities to get screwed or to game the system. Deductions for business experiences might include dinners, trips, vehicles, homes/home offices, etc. for some people.

    We also pay 7.65% (up to $184k of income per year) into social security and Medicare (a small amount of money and mediocre not free healthcare that you receive after age 65 or if disabled) and employers match a portion of that.

    Here’s s pic of our current tax rates …

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