I've seen this so many times.

US Tax law is far too nuanced and complex for this. Just simple things like donations create issues.

Donations to registered 501(c)(3) charities are tax exempt. But how does the IRS know if you gave the Salvation Army bell ringer $20? You have to tell them. On your tax return.

Medical expenses in excess of 7.5% of your income are also exempt. And the IRS has no clue which of your expenses were medical. So you have to tell them.

It's far more involved and complex than even just this. Did you move? Are you a member of the military? Costs related to your move are not taxable.

There are probably thousands of potential exemptions. Few of which could be automatically identified and credited without massive privacy issues. And even then couldn't be perfect.

That cardboard box you bought at the local big-box store? Was it a tax exempt moving expense?

Oh, and the IRS has been sitting on my return for 2 months now and I did all the work for them. Could only imagine what it would look like if they had to track all of this.

There are many possible deductions, however a lot of people can’t/shouldn’t use them because of the large standard deduction. The question is how many people file taxes which are basically W2 plus standard deduction? My bet is quite a lot.

Don’t let the perfect be the enemy of the good.

The figures I’ve seen have around 80% of taxpayers taking the standard deduction:

https://taxfoundation.org/standard-deduction-itemized-deduct...

I feel like that is about right, especially with the higher standard deduction.

I bought a house early last year for 250k. Including all the interest, fees, taxes, etc, plus all my family's medical expenses, and even things that I'm not sure I could include, I still couldn't reach the standard deduction. It really is a lot of money for most people.

The vast majority of Americans take the standard deduction. Those that don't can afford an accountant.

It's not that hard really. You can get everything prefilled as if none of those points applied. Then you make changes which apply to you.

Various levels of deduction exist in other countries too - for example in Australia. But I get 95% of the form prefilled from employers/banks/insurance and only add what's missing.

1040EZ is basically what you describe. It may not be pre filled but it’s something like two pages, and there’s not much to it.

My understanding is that this is precisely how it works in many other developed nations - the US is a bit of an outlier in this regard.

Im Denmark that pretty much how it works. If you have complex scenarios you might need to adjust the numbers a bit, for example if you have stocks abroad or income from gigs.

Many trading platforms in Denmark do automated reporting, and some gig-economy apps do automated reporting too. But if you setup a lemonade stand, well, reporting is in you :)

The tax authorities also have pretty good phone support. It's a bit overloaded around filing season (but getting through is possible), but if come home from an internship abroad and call them, they are happy to tell you where and how to report income and taxes paid in Canada for example.

I bet it's expensive to offer phone support. But if you want people to pay taxes the best way to do it is to make it easy to do the right thing.

This advice goes pretty much everywhere, if you make it easy to do something, people will do it :)

I fill out my Danish one in like 10 minutes. First year in DK I had help but after that it's kind of easy. Most what it takes time is filling out the deductible for travel where you have to indicate days traveled. I guess in the US is deliberately complicated or get's changed a lot as for the ordinary folk this shouldn't take a lot of time, even if you had to input all your income.

In the UK, it is like this for the vast majority of tax payers. Certain criteria, like earning over £100k, mean you need to file a return. The government will usually send you a letter informing you that you've met the criteria too, as they know how much you earn each month.

At any time, you can log in and easily see how much the government thinks you have earned and from who, and which tax rate (tax code) is being applied to you. You can correct this as well if it is wrong.

Having lived in Australia, the US and UK, I've found the UK system to be the easiest to understand and navigate. Australia isn't too far behind. The US is just a mess.

In Australia we have something of an in-between approach. Essential tax data (e.g. total income and withheld tax) is sent directly to Government by your employer and it is pre-filled into the relevant fields of tax filing software developed and maintained by the Government.

However it is not a "one click to accept the default" system because there's still a lot of important information it does not know.

They have some awesome tools built in to the tax form. The asset calculator lets you put in stuff like “I paid this much for an office table” and it tells you that the expected lifetime is 10 years and it will automatically insert the deduction for the next 10 years without you having to think about anything.

Also in some underdeveloped nations (e.g. India). The US is truly the third world of the western hemisphere.

Not in Switzerland. Bank accounts and salary information are not accessible to either level of government (communal, cantonal, federal), due to strong privacy legislation and a traditional distrust for central data collection and authority.

But nevertheless the yearly filing process is rather straightforward, as the tax authorities provide their own free web app for this purpose. It hasn't always been great but it improved significantly over the last few years.

In Romania if you're a salaried employee you don't even need to sign off, they do everything for you.

There are no deductions, for a lot of stuff you just get money directly from the government, as an incentive.

A big part of that is the complexity of the tax code.

Not sure how IRS is going to know how many dependents I have living in my house or whether I've lost my hearing and am now deaf.

None of that changes very often. For most Americans filling out tax forms or paying someone to do so is simply economic dead weight.

The IRS could use easily use last years data plus what was submitted by companies to pre fill most Americans taxes accurately and people could amend those forms as needed with less effort than starting from scratch.

If your taxes are simple enough that the gov't can just fill them out for you, then the EZ file should work pretty well too?

Sure, but then why not just roll it into the IRS’ own web portal instead of letting every service roll their own and potentially screw with it (like Intuit did when it prevented Google from indexing its Free File tier)? The result is far more consumer friendly and potentially allows for greater integration with and prepopulation from other government services.

So then the right question to ask is "why is the tax code so complicated?"

Yes, EZ file should work for 99.9% of the US. But it doesn't, because the tax code is horrendously complex

Usually, you dependents have an SSN and requirement to maintain an address on record, as well as a birth certificate indicating who their parents are.

IRS could possibly reach into some of that. Or it simply relies on what you reported last year.

But sure, you'll have to correct some details every few years. This might also be the case if you have income from bitcoin, etc.

This works if your tax situation is W-2 income and investment income from mainstream investments. You start to run into issues for anything you have to report, like small business income. There are also privacy concerns. Mortgage interest is tax is tax deductible, but should the lender be obligated to tell the government it has a relationship with you? In the case of an employer, it makes more sense because the government is taking what it's owed. For deductions, it's what you're owed, so the onus can be more on the individual.

> Mortgage interest is tax is tax deductible, but should the lender be obligated to tell the government it has a relationship with you?

Yes, the govt has an interest in knowing the source of revenue for banks. Not only for money laundering and tax fraud, but ensuring the banks have stable income sources to avoid bank failures.

Mortgage interest is already reported to the IRS on Form 1098 and that form is required to be filed by the lender if you paid more than $600 in interest for the year.