marurun wrote:Well, that's $30,000/year for essentials. If his family is 2 people (no kids), that's less than double the poverty level for the US as a whole. He has the advantage that savings can be tapped for emergencies, something many families do not, but that's certainly on the frugal side. Median household income in the US last year was about $68,000/year. If this fellow is indeed managing to get by on only $30,000/year and makes median US income, his family is putting away more than 50% of their income for retirement. That's more than the majority of American families.
Now, there are a lot of US families that have to get by on a lot less than $30,000/year, so that's only frugal by by the averages, so to speak.
No he has a kid. This is the video if you are interested. Is the $68K/y before or after taxes?
But you still pay income taxes at the federal level.
That said, any time you see a "median income" statistic that is talking pre-tax. Because there are a ton of factors that affect your take-home pay (state taxes, pre-tax retirement contributions, tax credits like kids).
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With all this complicated taxes, who double checks on 300M Americans + organizations? What if someone makes an error and files less taxes, do they go to jail because he miscalculated, forgot, or didn't know? At what point its tax evasion?
RCBH928 wrote:With all this complicated taxes, who double checks on 300M Americans + organizations? What if someone makes an error and files less taxes, do they go to jail because he miscalculated, forgot, or didn't know? At what point its tax evasion?
I'm in Canada, but did tax returns before my mental health issues. Surprisingly, or maybe not, the people that get audited the most are the ones that make no sense. Seniors that died the year before get audited for their retirement home costs, or one client got audited for her donation amount when it was literally on her T4 (the slip showing employment income and benefits, forgot what the american version was called).
The rich people where I had to do illegal shit for them? Nothing never happens to them. Keep in mind that there's stuff like tax havens too which they tend to never regulate. My assumption is that they don't get audited because well respected accountants do it so they assume there's little to no error.
Rich people are rarely held accountable for tax evasion unless it is metric tons of money, because the American IRS is under-funded and under-resourced and rich people have lots of very expensive lawyers. The technicalities can drag out in court for years and years. It’s much easier to go after the common folk.
But interestingly enough, most taxable income and transactions are required to be reported to the IRS. Most Americans should never have to file taxes, but the government doesn’t want to basically gut the tax preparation industry (because lobbying!).
marurun wrote:Rich people are rarely held accountable for tax evasion unless it is metric tons of money, because the American IRS is under-funded and under-resourced and rich people have lots of very expensive lawyers. The technicalities can drag out in court for years and years. It’s much easier to go after the common folk.
But interestingly enough, most taxable income and transactions are required to be reported to the IRS. Most Americans should never have to file taxes, but the government doesn’t want to basically gut the tax preparation industry (because lobbying!).
Tax evasion charges are only for the almost-rich. Most people don’t pay taxes or don’t pay enough to get charged with tax evasion. The truly wealthy can afford, not only to fight tax evasion charges, but to structure all of their transactions in such a way as to avoid paying taxes legally (because lobbying).
Yea most tax returns are just formalities at this point. Canada is slightly more well made in that regard because if your tax return is simple the CRA (Canada Revenue Agency) will do the tax return with you over the phone.
The tax return industry here is kind of a fraud as well. One office I worked at would charge a few hundred to do tax returns for seniors that only get pensions. We would basically have them fill out a form, submit it online, and download their tax documentation, and have the program auto fill the download to the return. 5 minutes of work with pretty much no human input, and charging them hundreds.
Most places, including the CRA, only have a few weeks of tax training, if that. I always tell people now to just do it for free themselves if it's a few slips, or pay like $30 for a university student to do it. It's pretty much the same result.
prfsnl_gmr wrote: Most people don’t pay taxes or don’t pay enough to get charged with tax evasion.).
Does your employer cut your salary for the income tax? or you have to do it yourself? If so I can imagine many people not paying their taxes. Who will go after 300 million people to check if they paid their taxes
prfsnl_gmr wrote: Most people don’t pay taxes or don’t pay enough to get charged with tax evasion.).
Does your employer cut your salary for the income tax? or you have to do it yourself? If so I can imagine many people not paying their taxes. Who will go after 300 million people to check if they paid their taxes
Almost all employers are required to take out federal and local taxes (for the employer's work locality, not for the worker's residence locality). Most employers sign up with payroll processing companies that help with that.
