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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

#531

Post by [deleted] »

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.

[deleted]

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

#532

Post by kokx »

janandonly wrote: post #508

To me (as a Dutchman) this sounds crazy. Here in Holland the only way to file your taxes as in individual (I don't know about company's) is to login to the government tax website (with my digid (a government issued digital identity)) and then to simply check if all the information that they have collected on me is correct. It usualy is. All I have to add is my deduction items, and BAM! it's done. Also, we automatical…

The dutch tax service even has a great slogan for this ideology: "Leuker kunnen we het niet maken. Wel makkelijker". Roughly translated, this means: "We can't make it nicer. But we can make it easier.".

Every year, they add some improvements to the entire system. They basically prefill your entire income and capital. Including stocks, dividends and other things. The only things you need to fill in yourself are some of your deductions (there are some which are prefilled as well).

They open the filing of taxes every year on march first. And every year there are lots of people who fill it in on the first day. This year there was even someone who handed their taxes in 18 seconds past midnight.

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

#533

Post by tyfon »

fsloth wrote: post #25

Oh man, I've had government provided automatic filings for ages now (Finland). US is really odd how it emphasizes the benefit of the middleman over the benefit of the individual citizen (it seems). Or have I completely misunderstood what's going on here?

Same thing here in Norway. We get the tax return forms pre-filled and if we want to make changes it can be done on a government web page easily. Capital gains, most deductions and assets/loans are also registered automatically.

If you have no changes then you don't need to do anything at all.

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

#534

Post by Steuard »

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?

For several years in grad school I had income that varied significantly in different parts of the year (I got a large scholarship check as a lump sum). So every year, I had to fill out some obnoxious, moderately complicated form detailing my month-by-month income and calculating the estimated tax that I needed to pay each quarter. Upshot: the tax system does allow for changing circumstances and won't penalize you for not foreseeing them in advance, but it does make your taxes a lot more complicated.

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

#535

Post by snorberhuis »

janandonly wrote: post #508

To me (as a Dutchman) this sounds crazy. Here in Holland the only way to file your taxes as in individual (I don't know about company's) is to login to the government tax website (with my digid (a government issued digital identity)) and then to simply check if all the information that they have collected on me is correct. It usualy is. All I have to add is my deduction items, and BAM! it's done. Also, we automatical…

You can have an accountant do it for you. I don't file my taxes in The Netherlands. This makes sense if you own a business.

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

#536

Post by dboreham »

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…

That's weird because there used to be a safe harbor rule where you didn't owe the fine the first time it happened. So either you don't owe that $44 or something changed..

Perhaps you just didn't withhold enough on ordinary income (which requires overriding payroll defaults). There's probably no safe harbor for that.

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

#537

Post by dsfyu404ed »

benj111 wrote: post #496
rattlesnakedave wrote: post #377

Earlier quoted context omitted.

This is actually how things were done pre WW2. If people were able to budget for it then, why not now? The current system makes filing taxes and getting refunded seem like a reward, it should probably be a bit painful to do your taxes. Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see…

"becomes too easy for the government to nearly invisibly turn up the tax rate" Or not. Source. I live in a country where the vast majority have income taxes handled by their employer. It would still be front page news if income tax rates increased or decreased. Painful transparency is just pain.

It would be front page news for a day then people would forget and you'd never hear about it again.

Do it in the US and it's front page news on the day and then it's on the second and third pages January through April the following year.

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

#538

Post by jumbopapa »

ecopoesis wrote: post #527
jacobolus wrote: post #336

Earlier quoted context omitted.

It’s not really about making people more or less aware of what they are paying. The point is to make filing taxes as time consuming and obnoxious (and therefore emotionally painful) as possible, ideally without the public connecting the dots and getting outraged.

The point is to enrich Intuit and other tax preparers that lobbied for this.

That's for point 1. Point 2 is a completely different camp.

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

#539

Post by jumbopapa »

rattlesnakedave wrote: post #377
adjkant wrote: post #366

Earlier quoted context omitted.

Interesting in theory but in practice most Americans do not have the financial literacy to budget properly to meet taxes. What happens when you don't have the cash to pay? Do we then see a whole new sector of predatory loans? Imprisonment? Increasing unpayable fines? None of those are good ideas, yet when things like this happen, our system has already fallen into these pitfalls. Witholding is an essential idea. What…

This is actually how things were done pre WW2. If people were able to budget for it then, why not now? The current system makes filing taxes and getting refunded seem like a reward, it should probably be a bit painful to do your taxes. Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see…

It's actually a little ironic who introduced the idea of tax withholding. It was Milton Friedman and little did he know that federal tax withholding would allow the government to grow larger than ever imagined.

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

#540

Post by dsfyu404ed »

dnautics wrote: post #494
vernie wrote: post #367

Earlier quoted context omitted.

Nah, no quarterly estimated payments. You just get your whole salary up front and you're completely fucked in April.

It might be more effective if we moved filing to the first week of November.

Doing that in absence of all other changes would likely have a highly positive outcome in the medium/long term (for tax reform at least).
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