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IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

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Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#251

Post by PaulDavisThe1st »

My pet peeve: I've used freefillableforms or whatever it is called for several years. It's the only (free, online) option (I think) for someone in my income bracket. It's not a bad system, but it is deliberately hobbled: it will do about 90% of the math for you, and about 90% of the "put this computed value on line N of some other form".

But ... not the remaining 10%. And there will be no errors if you fail to do them (other than your return being incorrect).

I don't know if it is better or worse to offer a deliberately crippled system.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#252

Post by virmundi »

peterwwillis wrote: post #224
virmundi wrote: post #208

Earlier quoted context omitted.

The first is crumbling and a major cause of urban sprawl and global warming. The second has brought some benefits like a microwave, but nothing of any meaningful use. We lack moon bases for example. National parks should be state run. This is a massive power grab by the feds under feel-good logic.

National Parks exist because we are a nation of united states, not an independent fiefdom of states. All citizens of these united states deserve the same right to enjoy the natural beauty of this country, and no individual state should have the right to remove such privileges from the rest of the citizenry through inaction, nor through lack of management make it less than ideal to enjoy. Conservation of land is a nat…

Then there is no limit to the power of the Federal government. If they can say, “We can do a better job than you, person or State”, then can run roughshod over personal and State’s rights. I guess that’s fine as long as they are running over people and States you don’t like. What happens if Trump goes into California and takes over due to the humanitarian crisis that the State brought in itself ie the tent cities?

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#253

Post by reaperducer »

arcticbull wrote: post #235
jxramos wrote: post #168

Earlier quoted context omitted.

The thing people misunderstand with the government not being able to figure it out is because there's a huge variety of complexity that is truly individual based. Did you make a contribution to a tax deductible IRA? Did you make a retroactive payment to that account in the following tax calendar year? There's a ton of variables going on here, where the government doesn't have this all-seeing system where everything g…

Literally all of that information is already being reported to the IRS by the relevant companies on forms 1098, 1099-whatever, W-2, W-4 and whatever other schedules apply. The IRS defines the rules, they built an engine to take all that into account to ensure you're not lying on your taxes. They just have to literally run it and send you the printout for verification with a remittance stub. The rest is regulatory cap…

Literally all of that information is already being reported to the IRS by the relevant companies on forms 1098, 1099-whatever, W-2, W-4 and whatever other schedules apply.

But not instantly. And not all of it in time for April 15th. Sometimes those details don't make it to the IRS for years.

We don't yet live in a world of instantaneous information transfer about every American citizen to the government.

Some people also see that as a good thing.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#254

Post by xrikcus »

nix0n wrote: post #170
marcrosoft wrote: post #164

Earlier quoted context omitted.

> messaging that the government can't do anything properly I would love to hear about things the government has done exceptionally better than private companies. Please go on.

Healthcare comes to mind since we're discussing US politics. Roads might be the canonical example but I'm not familiar with any examples of privatized roads.

The M6 toll is a pretty nice road as roads go. I believe it was privately funded.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#255

Post by pjmorris »

marcrosoft wrote: post #164
alistairSH wrote: post #67

In the US, we've had decades of (largely GOP) messaging that the government can't do anything properly. A substantial portion of the population believes it. As noted in a sibling comment, the IRS could pre-fill forms that would be correct for the vast majority of tax payers (who take the standard deduction/don't itemize, have a single job, and no other edge cases). These people should not be paying TurboTax either wa…

> messaging that the government can't do anything properly I would love to hear about things the government has done exceptionally better than private companies. Please go on.

"What have the Romans ever done for us?" [0][1]

...

"All right... all right... but apart from better sanitation and medicine and education and irrigation and public health and roads and a freshwater system and baths and public order... what have the Romans done for us?"

[0] https://www.youtube.com/watch?v=Y7tvauOJMHo [1] http://www.epicure.demon.co.uk/whattheromans.html

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#256

Post by floatingatoll »

lazyasciiart wrote: post #225
floatingatoll wrote: post #199

Earlier quoted context omitted.

> Did you make a contribution to a tax deductible IRA? Did you make a retroactive payment to that account in the following tax calendar year? For these specific two examples, the IRS need only introduce monthly reporting requirements for all tax-affecting investments, at which point they once again have sufficient data to do your taxes for you. They already have your SSN, so there’s no excuse not to have integrated r…

Who your dependants are and what type of filing you are doing (single, married, married jointly)

“If your tax situation has changed in any of the following ways, please check the appropriate box(es) and mail this back to us or submit online; we’ll issue a revised estimate within 30 days and extend your review deadline accordingly.”

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#257

Post by freedomben »

ksdale wrote: post #189
astura wrote: post #111

Earlier quoted context omitted.

It's also anti-tax activist like Grover Norquist’s Americans for Tax Reform who hate automatic filing and prefilled forms too. Their reasoning is if taxes are "too easy" then somehow Americans will blindly accept tax increases so they actually want to keep tax filing as difficult as possible.

I am definitely not a Grover Norquist fan, but I do taxes for a living and a lot of people are VERY surprised at the amount that is withheld from their paychecks, but they never notice how much it is unless something happens and they are required to write a check. A couple illustrations: It's very common for people to owe tax at a lower rate than they did the year before, but be upset because they have to write a che…

Could not agree more, and it's incredible to me how few people feel this way. I'm not an accountant but I have a lot of friends who are (I was a software eng at a tax software company) and they all say the same thing as you. IMHO it comes down to psychology. Out of sight, out of mind is universal and will bite even very attentive people.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#258

Post by redisman »

dehrmann wrote: post #210
jacurtis wrote: post #190

Earlier quoted context omitted.

Most countries have this "automagical tax filing process". And what kills me the most is that America actually secretly has this same system too . Yet every year we have to go through the charade of filing taxes ourselves, when the governemnt already knows what we owe without us needing to round up paperwork, W2 forms, 1099 forms, and so forth. Yet they make us do it anyway. Don't believe me? Simply don't file your t…

> They know all of your income down to the cent If you have a W-2 job and all your investments are in a bank or brokerage, but they still don't know your filing situation, dependents, other income, or deductions. Not that I'm justifying the current system. It's just that the IRS only knows the big picture for most people. The rest is complicated.

Don't they know that from the W-4? Or does that not go to the IRS

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#259

Post by JohnFen »

cortesoft wrote: post #150
JohnFen wrote: post #54

Earlier quoted context omitted.

That's such a nonsense argument, though. Having the IRS pre-fill basic forms for you would not obligate you to accept them. People could still compute their taxes themselves (or pay someone else to do it).

Ok, I disagree with the TurboTax reasoning, but I think your argument doesn't make sense... if most people have their pre-filled tax forms making them pay more than they should, then everyone is going to compute their taxes themselves anyway to avoid paying too much... at that point, why is it better than the current system?

(Edited to correct an error)

About 20% of people (particularly low income people) have simple tax returns and file using 1040EZ. If the IRS computed that form, then what they send out would be ideal for the majority of taxpayers. So it would benefit those by eliminating the expense of tax preparation without actually costing them more in taxes.

Then there are those like myself who fall into an in-between area. I have more complex taxes, although not as complex as a lot of people, but would gladly pay more than is strictly necessary in order to not have to bother with figuring them out. In fact, I already do, in the form of paying a tax preparer (I fully consider the expense of tax preparation as a tax itself.)

Those whose taxes are more complex are very likely aware of that fact, and would continue to do their own tax preparation.

Also, if the IRS provided a prefilled 1040EZ, that would make computing your own taxes easier because you could use the figures supplied as a reference.

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