this post was submitted on 24 Aug 2023
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But that's only really makes sense in like the simplest of cases. The government doesn't know if you had a kid this year, or maybe you bought an EV, or maybe you started renting out a room in your home.
If all you have is a single W2 income; then by all means go to your local library, grab a 1040-EZ form, fill it out, and drop it in the mail. Will probably only take you 10 minutes or less.
In all but the most niche cases, they do in fact know that you had a kid. That being said, most things they have a pretty good idea about (or could) and they could easily adopt the system that they do in a lot of other countries where the government sends to a tax form all filled out that says, “we think you owe this much.” Then you just provide the exemptions you listed.
This would save a considerable amount of time when I file my taxes by just being able to double check they got cost basis correct on stocks sold and applied appropriate credits for mortgage interest and what not.
How would the IRS know that? The only way I could think of would be the Social Security department sharing the information with the IRS; and are they legally allowed to do that? But let's even say that's true; if the parents aren't married and filing jointly, who gets to claim the child as a dependent? That's a decision made by the parents (or local courts in case of custody battles), so not something the IRS would decide.
Basically what it seems to boil down to is that filing taxes is complicated because the tax law is complicated.
I was assuming social security could share that information since now there’s a new taxable citizen. The IRS could easily prepare tax amounts assuming married filing jointly, married filing separately, and single. You would just choose one. And like it currently is, if both people attempt to claim dependency, someone gets slapped with a fine.
Tax law is absolutely complicated, and I definitely won’t deny that, but the IRS can make things easier and could do the basic filings.
They don't share that information unless absolutely necessary. All government agencies hold their cards pretty close to themselves for legal and liability reasons. The IRS will complain that you've both claimed a dependent because you have to include that dependent's information and they can tell when you both try to claim the same one
HAHAHA yah, they don’t know those things about you…..sure……
You seem to have a very optimistic view of the efficiency of governments. I mean the IRS is basically running on a budget of table scraps after being defunded for decades.
It's not "governments", it's the "US government". Here in Europe, it just works.
It was more a statement about data mining. It’s cheap and easy and the government 100% does it
Maybe, and I really do mean maybe someone has a record somewhere that you have a child. That doesn't mean it is shared with the IRS.
That's my thinking.
Every large organization, private or public, that I've interacted has been basically just a bunch of different people in many different silos. I'm surprised to see so many people have this "well oiled machine" perspective of the government where apparently it is all seeing and all knowing.
So offer it for simple cases. If you don't like the way it's done, you can always go and do the simple process you're describing
Sure, that would be simple enough for them to mail you a letter with like "we're aware of these incomes from these employers" and any failure to file additional income on your part makes you liable. And of course not filing to claim any credits/deductions on your part just screws your out of your own money.
But then that also assumes the IRS knows your address. Does your employer even report your address when your taxes are withheld from your paycheck? And what if you move in the time between then?
I would be very surprised if they didn't know the address of every taxpayer, and I do believe it's reported by the companies you work for. If you move, you can fill out a change of address form with the postal service today, which makes the new address generally available. If they really don't have any way of knowing currently, it would be worth every penny of my taxes to just make an online portal available where you can enter that information yourself.
Pretty sure it was sarcasm.
They didn't have my new address until I filed my taxes with my new address.
Yes they do. See, scandinavian countries.
Okay but RIGHT NOW they don't know. Sure it's possible for them to track it, but they do not, and the infrastructure isn't set up to do that.
Okay. I concede to your point, Ithink you're more correct than I was.