>>>>>>>>>>>Our tax is payed via PAYE (Pay as you earn). Your salary is known, then the tax-free part is put aside, then the tax on the remainder is split into 12 equal parts, and that is deducted each month. No filing - that's just for self-employed people.
>>>>>>>>>>>
>>>>>>>>>>Do you mean that salaried folks don't file tax returns? What are they doing if they have external income (banking interest, capital gains etc.)?
>>>>>>>>>
>>>>>>>>>D'you know? I've never thought of that. When I was self-employed, I had to declare all that. Ah, I think that dividends from investments, and all that, have tax deducted at source, i.e. if your bank gives you interest for a savings acc, then Uncle Sam's already had his cut - you get it net.
>>>>>>>>>
>>>>>>>>Uncle Sam doesn't do it for sure. Also, if tax rate is progressive then how banks/brokerages may know how much to withhold?
>>>>>>>
>>>>>>>I think Terrys wrong there. If you tax affairs are at all complicated the Inladn Revenue will ask you to complete a return. If you are PAYE(Pay as You Earn) but neglect to mention whats called unearned income(stocks sale of goods capital gains etc) then you might get investigated.
>>>>>>>
>>>>>>>Nick
>>>>>>
>>>>>>It indicates that Terry doesn't have complicated tax issues. He is a happy man. My problem (not the major one, but still a problem) is to fit tax return to post envelope, it doesn't go in.
>>>>>
>>>>>Who's the happy man - me without two ha'pennies to rub together, and thus with simple tax affairs, or money-bags you with the voluminous return?
>>>>>
>>>>>Why don't you file on-line then?
>>>>>
>>>>As I explained I hardly know how it gets on paper, and I suspect my accountant doesn't really know it either. Many years ago I was able to do taxes myself, but not anymore. Btw, many people struggle with the simplest income structure, i.e. salary only (there are many gray areas in tax code anyway), and still go to accountant.
>>>
>>>In essence, though, no-one pays tax simply via a sort of PAYE in the USA?
>>
>>Salaried people get their tax deducted from paychecks, but because of tax code complications it's not possible to figure out exact tax amount, so they deduct approximate amount based on personal declaration (it's called form W4). At the end of year (April 15 is a deadline) everyone is obliged to calculate exact amount and file tax return.
>>Banks and brokerages do not deduct any taxes, except if dividend came from foreign source.
>
>That sucks!
>
>Assuming your salary's stable throughout the year then it's quite simple to work out the tax each month. If you should get, say, overtime pay, then that's just taxed at the full rate (as you've already had your 12th tax allowance for that month).
>
>Of course, if I should go off and do a "foreigner" (work other than at my main place, maybe even in competition with it), then it's up to me to declare those earnings to the IR, and fill out another type of self-employed return.
>
>BTW, there you are with the expression "paychecks". We never did get to the bottom of whether most people still physically get a piece of paper, a cheque, in their hand in the USA.

Our days most large businesses offer an option: either giving a physical check (cheque) or making direct deposit to bank account. Both ways an employee gets a paystub, paper statement that could be required for some jurisdictions, e.g. if you apply for a mortgage.
Small businesses pay by check only, and self-employed persons got paid by checks too.