It’s really the only way with how the system is set up at the moment. There’s no way to tell if someone is working 3 jobs paying 15k per year each, so each paycheck is taxed and if you claim you only made 15k because it really was one job not 3, you get your money back, otherwise you would have to claim all your income from all the sources and then they keep the taxes.
They could change the system but then if you inadvertantly make more than the minimum and you said you probably wouldn’t you would have to pay that tax at the end of the year rather than get a rebate and they would probably charge interest.
There is, but you just get everything back as a refund. They still take taxes out of your paycheck.
This seems pretty punitive, considering the poorest in society need the money immediately, not as a lump sum refund once per year.
Here (Australia) the tax free threshold is baked into your tax withholding amount.
It’s really the only way with how the system is set up at the moment. There’s no way to tell if someone is working 3 jobs paying 15k per year each, so each paycheck is taxed and if you claim you only made 15k because it really was one job not 3, you get your money back, otherwise you would have to claim all your income from all the sources and then they keep the taxes.
They could change the system but then if you inadvertantly make more than the minimum and you said you probably wouldn’t you would have to pay that tax at the end of the year rather than get a rebate and they would probably charge interest.
You can claim the tax free threshold for withholding purposes on 1 job in Australia. The others you need to withhold tax on any money earnt.
However, in my opinion technology being what it is now, I don’t see a reason the tax office couldn’t just direct businesses to withhold a certain amount based on overall earnings. May be a touch more complicated, but most businesses sending this information to the ATO throughout the year anyway…
There definitely are ways around this problem.
But not with paper forms, and it seems the US are in the dark ages when it comes to tax administration.