Sometimes I see on American TV that once a year (I think) they try to figure out how much tax they owe and send off a cheque. How does this really work?
Id struggle very much to calculate this. Do you keep receipts for everything?
Is there no system where taxes are automatically taken out of your monthly wages? Id be interested to hear some examples of what you pay, and how you calculate it all if possible.
In the UK pretty much every has monthly tax taken automatically, unless you are self employed.
The way it works for me for example last month I made:
£2282.58 and £435.92 was deducted. £247 in tax and 98.77 national insurance. £90.15 went to my pension.
So what would your payslip look like? No deductions? Or am I just getting the wrong idea from America TV shows?
Thanks
You might be getting the wrong idea. We have tax withholding on our paychecks, same idea. Then when you file your taxes, you either send a cheque (if your withholding was less than you owed) or you get a return (if your withholding was more than you owed).
A return is what you file. The money you get back for overpayment is a refund.
Sorry, pet peeve of mine that comes up every tax season.
I’ve had others correct me the other direction (specifically decrying the use of “refund” because it wasn’t money owed in the first place). At some point it’s just semantics.
It is indeed called a refund by the IRS and all tax professionals. The person(s) attempting to correct your use of “refund” are wrong, but they were probably trying to make the point that giving a lot of extra money to the government interest-free is not a smart financial idea.
Is the US, we send a “a check” not “a cheque”
I’m aware, I was simply translating for our colleague across the pond.
Oh, I thought maybe it was a Canadian thing.
Canadians also use “cheque”, but I’ve got a foot in both countries. Consider me your Bri’ish/'murican translator.