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In both the US and UK employers have to report earnings and banks / brokers have to report interest and investment income to the IRS/HMRC. Do the Swiss tax authorities trust citizens to correctly report their own income without any verification?

In the UK the government communicates your tax code to your employer payroll department to tell them how much tax to withhold on your earnings (taking account of tax credits etc.) Banks have to withhold the basic rate of tax (higher rate tax payers must file, but that already excludes 90% of tax payers from worrying about it.)

In the US the system seems similar except the government doesn't let your employer know how much tax to withhold so you fill in a form for your employer with the information that gets it mostly but not quite right (so long as you don't switch jobs that year!) Filing taxes as a regular employee ends up being substantially more complex than filing taxes as a self-employed person in the UK where the government provides an online system much simpler than that provided by the tax filing companies in the US (otherwise print and mail several different PDF forms and do the math yourself, fortunately if you get it wrong the IRS already knows what you owe so at that point they'll just point out the corrections and tell you what you owe...) And this beurocracy is of course all doubled because states have their own completely separate set of rules.




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