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Congress Is About to Ban the US Government from Offering Free Online Tax Filing

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Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#511

Post by thisone »

BurningFrog wrote: post #443
gowld wrote: post #326

Earlier quoted context omitted.

If complicated taxes are a Republican anti-tax strategy, why did Reagan and the 1980s republicans pursue a strategy of vastly simplifying the tax code? Doing taxes is a tax -- in hours and fees. Only the wealthiest people who can spend $10K on tax prep to save $100K via loophole deductions, oh.

> If complicated taxes are a Republican anti-tax strategy... Republicans only last year substantially simplified tax filing.

about the only simplification on mine was that I no longer have to file that I have a full year exemption on the health care law.

However I do have to file an extra sheet of paper now just to fill out a single line for foreign address that's been removed from the 1040.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#512

Post by jason_slack »

lukeqsee wrote: post #510
jason_slack wrote: post #506

I just filed my taxes this morning. I owe the government $4,600. I received an "underpayment penalty fee of $44" because I did not "pre-pay an estimated tax" each quarter. Something I have never done in the ~25 years I have been paying taxes. Not only do they want the $4,600 by 4/15 they also want an estimated $1,200 "pre-payment" for 2019 by the same date or I will incur this same fee of $44 next year.Plus 3 more pa…

Strictly speaking, you're holding their money for a year without interest. The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

I get where you are coming from.

What if I have a baby in January or February? Then I would qualify for a deduction and then I am indeed overpaying them.

What if I lose my job? or get a job that is less money?

It's not their money unless I earn the money to pay them, IMHO.

It should go both ways.....why can't I ask them to estimate a refund then and give it to me in advance?

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#513

Post by tomohawk »

Missing option #1: just don't collect income tax on 80% of people, since its not worth it. In this case, IRS would do automatic calculation, and if they say you owe nothing, you don't have to do anything.

Missing option #2: it is just foolish to trust the tax collector to tell you how much you owe. The only way this would possibly work would be radical simplification of the tax code. Since that is not going to happen...

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#514

Post by tomohawk »

lukeqsee wrote: post #510
jason_slack wrote: post #506

I just filed my taxes this morning. I owe the government $4,600. I received an "underpayment penalty fee of $44" because I did not "pre-pay an estimated tax" each quarter. Something I have never done in the ~25 years I have been paying taxes. Not only do they want the $4,600 by 4/15 they also want an estimated $1,200 "pre-payment" for 2019 by the same date or I will incur this same fee of $44 next year.Plus 3 more pa…

Strictly speaking, you're holding their money for a year without interest. The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

Actually, witholding started in WW II to help fund the war. Prior to that, people made quarterly payments. It was left in after the war, because government never lets an emergency go to waste.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#515

Post by wycy »

jason_slack wrote: post #512
lukeqsee wrote: post #510

Earlier quoted context omitted.

Strictly speaking, you're holding their money for a year without interest. The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

I get where you are coming from. What if I have a baby in January or February? Then I would qualify for a deduction and then I am indeed overpaying them. What if I lose my job? or get a job that is less money? It's not their money unless I earn the money to pay them, IMHO. It should go both ways.....why can't I ask them to estimate a refund then and give it to me in advance?

> why can't I ask them to estimate a refund then and give it to me in advance?

You sort of can, by adjusting your withholding.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#516

Post by lukeqsee »

jason_slack wrote: post #512
lukeqsee wrote: post #510

Earlier quoted context omitted.

Strictly speaking, you're holding their money for a year without interest. The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

I get where you are coming from. What if I have a baby in January or February? Then I would qualify for a deduction and then I am indeed overpaying them. What if I lose my job? or get a job that is less money? It's not their money unless I earn the money to pay them, IMHO. It should go both ways.....why can't I ask them to estimate a refund then and give it to me in advance?

> It's not their money unless I earn the money to pay them, IMHO.

Of course—and in my understanding estimates account for this. If you earnings diverge such that you will not owe that money in the end, you don't have to pay it and won't face a penalty, as long as you've paid a certain percentage of your year-end tax liabilities.

And to be clear, I'm not arguing from principle. They should make it much easier and straightforward to pay and understand taxes regardless employment arrangement. However, in practice, they view estimated taxes (quarterly) or paycheck withholdings as required payments or they will levy penalties. :-)

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#517

Post by nkozyra »

u801e wrote: post #421
rattlesnakedave wrote: post #349

Earlier quoted context omitted.

A better way to do 2 would be to do away with withholding. After a year of that we’d see a radically different tax system.

I've always thought it would be better to replace the income tax with a national sales tax. Then, for those who earn less and have to spend a greater proportion of their income on essential expenses, the government would credit them through their employer's paycheck (essentially the opposite of what federal withholding is now). For those who earn more, they would receive less credit or won't receive any credit.

Wouldn't that make the lower class the only ones that had to file anything at all (for the tax credit), put temporary financial strain in place when waiting for credit for purchases and actually make the IRS more complicated and onerous for most Americans?

I get the attempt to sidestep the regressive counterarguments normally in play with sales tax replacement systems, but I think this system would be equally regressive.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#518

Post by lukeqsee »

tomohawk wrote: post #514
lukeqsee wrote: post #510

Earlier quoted context omitted.

Strictly speaking, you're holding their money for a year without interest. The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

Actually, witholding started in WW II to help fund the war. Prior to that, people made quarterly payments. It was left in after the war, because government never lets an emergency go to waste.

That's fascinating!

Unfortunately it doesn't help the OP since he'd have to make quarterly payments regardless.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#519

Post by jason_slack »

lukeqsee wrote: post #516
jason_slack wrote: post #512

Earlier quoted context omitted.

I get where you are coming from. What if I have a baby in January or February? Then I would qualify for a deduction and then I am indeed overpaying them. What if I lose my job? or get a job that is less money? It's not their money unless I earn the money to pay them, IMHO. It should go both ways.....why can't I ask them to estimate a refund then and give it to me in advance?

> It's not their money unless I earn the money to pay them, IMHO. Of course—and in my understanding estimates account for this. If you earnings diverge such that you will not owe that money in the end, you don't have to pay it and won't face a penalty, as long as you've paid a certain percentage of your year-end tax liabilities. And to be clear, I'm not arguing from principle. They should make it much easier and stra…

I feel you. I'm not trying to argue with you at all :-)

I get both sides of the situation. It just seems the side of the tax payer doesn't matter.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#520

Post by jason_slack »

tomohawk wrote: post #514
lukeqsee wrote: post #510

Earlier quoted context omitted.

Strictly speaking, you're holding their money for a year without interest. The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

Actually, witholding started in WW II to help fund the war. Prior to that, people made quarterly payments. It was left in after the war, because government never lets an emergency go to waste.

That is fascinating! I wonder what kind of large scale effort it took to start having taxes withheld and sent to the government. So many small town employers that would need to comply and make a process to handle it....
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