Some tax forms ask information that seems to have no effect on the bottom line. No matter how you answer the question, your tax bill is the same either way. In Europe, this sort of thing would violate the data minimization principle of the GDPR. So the question is, what happens to people who either leave the intrusive fields blank, or they give bogus info? I’ve heard that tax penalties are generally a constant × the amount of underpayment. If underpayment is zero then so is the penalty, correct?
Accounts and digital assets seem directly applicable to assets held. Occupation sounds like it could have to do with tax credits, if you’re in something that’s subsidised.
Residence is weird but in the opposite way, because usually countries don’t tax residents abroad. 'Murca is the exception there, although I don’t know all the exact details.
Accounts and digital assets seem directly applicable to assets held.
And? Holding assets does not in itself trigger tax. Esp. how they are held. Whether your $100 is in a banknote or $100 in gold coins or Second Life game money, or $100 in a cheese wheel, in the absence of a transaction there’s no tax to speak of.
W.r.t accounts, it’s just foriegn accounts they want to know about, not domestic accounts. Walk me through the tax difference between the two (not interest, not cap gains, just having the account).
Occupation sounds like it could have to do with tax credits, if you’re in something that’s subsidised.
If that’s the case, that’s declared on a form that actually has effects on figures, which is not what I’m talking about. That would be an enumeration with a code that discretely assigns an activity from a list to an outcome. If you look at the signature box of the 1040, that’s just a freehand field. You can write “contractor” there or any number of vague things without affecting subsidies. I’m specifically talking about information that does not affect the figures.
Residence is weird but in the opposite way, because usually countries don’t tax residents abroad. 'Murca is the exception there, although I don’t know all the exact details.
Residence indeed affects the figures (whether you are inside or outside the US), but that’s already accounted for by the forms being submitted and the data on them. When a form arbitarily has a field for country of residence and that field in no way affects the figures, it’s extraneous info. Just a data collection that makes no difference to the bottom line. I just had a look at the 1116 form. Whether you write USA or Japan on the residence field makes no difference whatsoever in the in the calculation. You can write anything on that line and it does not change the calculation AFAICT.