Sometimes I see on American TV that once a year (I think) they try to figure out how much tax they owe and send off a cheque. How does this really work?

Id struggle very much to calculate this. Do you keep receipts for everything?

Is there no system where taxes are automatically taken out of your monthly wages? Id be interested to hear some examples of what you pay, and how you calculate it all if possible.

In the UK pretty much every has monthly tax taken automatically, unless you are self employed.

The way it works for me for example last month I made:

£2282.58 and £435.92 was deducted. £247 in tax and 98.77 national insurance. £90.15 went to my pension.

So what would your payslip look like? No deductions? Or am I just getting the wrong idea from America TV shows?

Thanks

  • atrielienz@lemmy.worldEnglish
    2·
    2 days ago

    At the end of the tax year you generally receive tax documentation forms (a W2 or 1099 etc). These tax forms detail your taxable income and possibly any tax credits or exemptions you might be eligible for.

    You fill out I9 forms detailing your status (single married etc) and what dependants you have when you start at your place of work and then update those forms as that status changes over time. This information is used by your employer to withhold taxes on your earnings from your pay checks and send that money along to the federal and state governments as necessary.

    When you receive your end of year tax forms you enter that tax information into a tax preparation service or paper form, sign it and send it off with what you owe in check form to the IRS, unless you have made accurate tax withholding in which case you have already paid. If you are owed money by the government for overpayment of taxes they will then mail you a check or direct deposit the amount owed to you into an account of your choosing.

    There are exceptions if you own a business or have other forms of income for the tax year which you may have to submit a more detailed filing to the IRS with documentation that can absolutely include receipts. But for the most part you use the tax forms you receive to submit your taxable income calculations to the federal or state government and pay or get paid accordingly depending on if you owe them money, or if you are owed money by them for overpayment.