How come the IRS doesn’t just mail you a bill if they know exactly how much you owe in taxes?
In: Economics
Edit: didn’t realize I’m in ELI5, thought this was r/personalfinance. Seems like there are a few good answers already though, so hope the mods don’t mind me chiming in
I’m not too familiar with the US tax system. However I heard that here in Germany we have some of the most complicated tax laws in the world.
The income tax is automatically deducted from your paycheck. Every year you *can* do your taxes and inform the german equivalent of the IRS of anything they don’t know, like some expenses you had (cost of transportation to the workplace, anything mandatory that basically lowers your de-facto income). Some people are obligated to do their taxes (i.e. self employed).
You then get a letter from the “IRS” that informs you whether you get money back or didn’t pay enough. For most emloyees you usually get money back.
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