Useful Tips

Myths about the “complex” US tax system


Question: Good afternoon. I have a question about filling out 3-personal income tax, I want to fill out through your site. Husband bought an apartment. In 2009, participation in shared construction, in 2012 an act of acceptance and transfer. We take 2-NDFL certificates for 3 years, my husband worked in two companies, but at the moment the second one has already closed, but certificates will be given for 3 years. Question: Do you need to fill out 6 declarations? For three years for one company and for three years for a second? For the first company in three years, the amount to be returned was 206,000 rubles. According to the second, I’m waiting for help from my husband. Or it may be possible to fill out the second company in 2 years, for example, there was more salary. And perhaps then it will be about 260,000 to return. How right? Thank you very much.

Only one declaration is always filed in one year. Until the end of 2016, you can submit 3-NDFL declarations for the last three years: for 2013, for 2014 and for 2015. Each year, appropriate income statements in the form of 2-NDFL are applied, which are taken in the accounting department of the employer. Data on both certificates of 2-personal income tax (for one year) are entered in one declaration. This is allowed. If you plan to use our program, then after entering the information at the “Data” stage, using the “Next” buttons, you must go to the “Income” stage and select the “Work” block by checking the box to the right of the “Work” block. Then, using the “Next” buttons, proceed to editing this block. In the "Work" block, first you need to enter information on one employer (one reference 2-NDFL), then at the bottom of the screen you will see the button "Add income", you need to click on it. Information on the second employer (from the second certificate 2-NDFL) is entered in "Income No. 2".

How much to fill out declarations is up to you. If you plan to declare only a property deduction for expenses for the purchase or construction of housing (excluding mortgage interest) within the limit of 2 million rubles (provided that the apartment was worth 2 million rubles or more, and only the spouse will claim the deduction), then the maximum amount of tax to be returned will be 260 thousand rubles. You need to take a look at the certificates of 2-NDFL again and calculate for what years with the spouse withheld taxes in the amount of 260 thousand rubles for both employers. Then generate declarations over the years.

Myth one: you pay taxes yourself

It is important to note right away that any salary offer from the USA is the amount before taxes. Largely because of this system, such a myth appeared. The statement about self-payment of taxes is true only by 50%. In fact, the system from the outside looks the same as in Belarus.

When applying for a job, you fill out a form where you indicate your SSN (social security number -, information on marital status, children. Based on these data, the rates of federal and other taxes are calculated at which you will make deductions during the year.

By the way, there is an opportunity to ask to lower the rate and pay less than they calculated for you, it doesn’t matter at this stage. Then, during the year, you pay taxes the same way as everywhere else - that is, they are deducted from the salary, and money is credited to the card “as if” after taxes.

Why "like"? Because at this stage it does not end. From January to April, the tax period begins when it is necessary to file declarations (more on this below).

Before I move on to other myths, we'll figure out who is generally required to pay taxes and which ones. So, you will have to pay the tax if you have been in the USA for more than 180 days - it is after this period that you become a tax resident.

If you were in the USA for less than 180 days, you will pay in your own country. Belarus and the United States have signed a double tax treaty, so you will only need to pay in one country. For example, a long time ago I worked three summer months in the USA and paid taxes. Upon returning to Belarus, I submitted documents for compensation and returned somewhere 60-70% of the taxes paid.

This means that if you bring or transfer some money from Belarus to the USA or from the USA to Belarus and they appear in your account, you will not need to pay taxes on this money.

If you are a US citizen, you must declare any income worldwide - regardless of where you live (this does not apply to holders of green cards). However, if certain conditions for the duration of residence abroad are met, you will not be asked to pay taxes on foreign income.

In the USA there are different types of taxes: sales tax, real estate tax, car tax and others. About each of them, I think, it is worth writing separately. In the same article, I want to talk about what taxes are levied specifically on the salaries of employees in the United States. There are four of them.

1. Federal tax the same for all states and depends on income and some other factors. The US uses a progressive tax rate - that is, the more you earn, the higher the tax.

Below is a picture with a description of the rates (relevant for 2016). In fact, there are quite a few options. Here I have provided only tax rates for families and for a single tax resident.

In most cases, it is more profitable for couples to file declarations together than separately. Also, a tax resident in a marriage pays less than someone who is not married.

2. State tax varies by state: from 0% (Texas and several others) to 13% (California). It is worth considering this when choosing a location for moving. At the same time, also pay attention to real estate tax if you intend to purchase something.

For example, in Texas real estate tax is several times higher than in California (though real estate in California is many times more expensive). I have often heard that Florida is a very profitable state in terms of taxation. Apparently, therefore, and not just because of the climate, so many American retirees are moving there.

3. Social security tax - tax to provide pensions, payments to the disabled and the unemployed. It accounts for 6.2% of total income. In addition, the employer pays the same percentage.

4. Medicare - medical care tax for the poor and the elderly. It is 1.45%, the employer pays the same percentage.

Now let's figure out how much you still have to pay. For example, take a family from Colorado (state tax - 5%), whose annual taxable (this is important) income is $ 100 thousand.

1. Federal tax

  • $ 18,450 - the family will pay $ 1,845 (rate - 10%).
  • From $ 18,450 to $ 74,900 - $ 8467 (15% rate).
  • From $ 74,900 to $ 100,000 - $ 6,275 (25% rate).
  • Total: $ 16.587 (16.5% of salary).

2. The state tax is 5% of income, or $ 5 thousand.

3. Social security tax - 6.2% of income, or $ 6200.

4. Medicare tax - 1.45% of income, or $ 1450.

Total we get: tax $ 29,237, or 29.2% of family income. Lots of. We pass to the second myth.

Myth two: taxes in the US are higher than in Belarus

It is rather difficult to compare here, but in some cases it may turn out that the tax amount is lower than in Belarus. It turned out just like that. Above in the calculations, I indicated that we are talking about taxable income, but in most cases your annual income will be less than taxable.

Tax deductions are called exemptions. Simply put, these are factors that reduce the tax base. For example, there is such a deduction as personal release. In fact, nothing is required for him - he simply applies to every member of the family. In 2016, it was $ 4050. That is, if, for example, our family from Colorado has two children, then the deduction for personal release will be $ 16,200 ($ 4050 * 4).

We recalculate the tax with a new base - $ 83,800 ($ 100,000 - $ 16,200).

1. Federal tax

  • $ 18,450 - the family will pay $ 1,845 (10% rate).
  • From $ 18,450 to $ 74,900 - $ 8467 (15% rate).
  • From $ 74,900 to $ 83,800 - $ 2,225 (25% rate).
  • Total: $ 12 537 (12.5% ​​of salary).

Changes in the database apply only to the federal tax, so everything below is unchanged.

2. State tax - 5% of income, or $ 5000.

3. Social security tax - 6.2% of income, or $ 6200.

4. Medicare tax - 1.45% of income, or $ 1450.

Total we get: $ 25,187, or 25.1% of family income. Anyway, a lot.

The beauty is that you can collect quite a lot of such deductions. There are deductions for having a mortgage, for educating children, for some purchases related to work, for medical expenses, for having health insurance (and you must have it), for saving money in a pension fund ( you will pay for these savings in old age when you decide to use them), for the fact that you lost dividends on collapsed shares, for charity, and so on.

That is why it is customary in America to keep all checks, printouts, contracts and agreements for at least a year.

Myth three: submitting a tax return is difficult

Not really. If you just work as a hired employee in one state, get a stable salary, then file your tax return without any problems. There are services such as Turbotax or TaxAct, in which, answering simple questions, you can fill out all the information, calculate your deductions and send an electronic declaration in electronic form to the IRS (United States Internal Revenue Service -

Yes, the first time the process can take two hours, because you will re-read and double-check everything a thousand times. Next year, the system will automatically pull up all your data from the old declaration, and filling out will take about twenty minutes.

Of course, if you have high incomes, a complex structure for their receipt, or you apply for large deductions, you can contact tax consultants who will study your situation in detail and arrange everything for a certain amount or percentage of the return.

In short, the process of filing a tax return is as follows:

  • In January, you receive a W2 form, which lists everything that you earned and all taxes that you paid. At my work, an accountant gives this form directly to his hands. If you have a savings account at the bank that accrues interest (now 0.01% per annum), it will send another W2 form.

  • You pay for a TurboTax subscription ($ 30 per year) and fill out a tax return following simple and clear instructions on the site. The form must be submitted before mid-April (sometimes this period may be extended). You can, of course, do everything on the IRS website for free, but I would not advise if you do not understand all the intricacies and do not know all the deductions.
  • Everything. Praise yourself for how smart you are and how easy it is. Wait for a refund if you claim it. Yes, taxes can be refunded if you paid more than necessary before.

If you claim a refund, then after reviewing the declaration (within a few days), the money will be transferred to your card in a couple of weeks. Last year, the IRS returned about $ 60 million in taxes to citizens. Local shops and businesses always arrange various promotions and offer discounts during tax refunds. This money is much easier to part with. Although I know cases when taxes had to be paid.

What happens if I make a mistake in the tax return

It’s better not to. Still, taxes in the USA are a very sensitive topic, and tax evasion or income hiding is very seriously punishable by a fine or imprisonment. If the IRS has questions about your tax return, it can be sent for audit.

According to the IRS, less than 1% (0.7% in 2016) of tax returns is sent for audit, so if you do not hide millions of incomes, you have nothing to worry about. But then again, read everything carefully and double-check the data - especially for the first time.