Odd Financial Stuff

In America the tax laws are different of course, and you file your own taxes.  Employers are required by law to have to have all the proper forms to you by the end of January, detailing how much you earned and what was taken out in taxes.  You then, have to either get the tax forms, or as many do now, file their taxes online.  This means you complete the tax forms and basically reconcile your tax account with the government.  You find out what deductions you are entitled to, and then in completing the forms see if you owe more taxes, or if you possibly receive a tax refund.  And you have to have all this completed and to the government by April 15th. 

Now you can see why many Americans have tax professionals do their taxes for them.

Here in the UK, our employers handle most of this and we just start a new tax year.  Easy, peasy.

Also, did you know in America if you are in debt, and settle the debt, meaning you pay less then the full amount owed, the amount you don’t pay, the amount the creditor forgives or is written off, you can be taxed on this amount!  You will receive a tax notice for this amount to be added to your income and could cause you to owe taxes on this money.

Odd, and a bit of insult to injury.   But true.

Here is another oddity:  you have a property repossessed in America, and the mortgage company has a loss at the auction or sale of the property, again you can receive a tax notice for this loss. Now of course most people who find themselves in this position will not owe taxes as they probably are insolvent.   But still, it can be quite a shock to see a tax notice on a debt you settled or could not afford to pay.

So for now, being in debt and insolvent, the UK is still one of the more lenient countries to have to experience this.