Now we're just left with this illogical part of the tax system:
The State: Pay me taxes or I'll put you in a cage!
Citizen: OK, how much do you need?
The State: You tell me, but if you're wrong you'll regret it!
IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
351–360 of 489 posts
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#352Now we're just left with this illogical part of the tax system: The State: Pay me taxes or I'll put you in a cage! Citizen: OK, how much do you need? The State: You tell me, but if you're wrong you'll regret it!
Exactly. This made sense decades ago when it would have been extremely costly to keep track of all the data necessary to calculate taxes.
I don't want the government to make a free solution to help me file taxes. I want the government to make a solution that prevents me from having to file taxes in the first place!
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#353Now we're just left with this illogical part of the tax system: The State: Pay me taxes or I'll put you in a cage! Citizen: OK, how much do you need? The State: You tell me, but if you're wrong you'll regret it!
This change means the state will stop saying "you tell me" and start telling people.
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#354Earlier quoted context omitted.
> Why wouldn't citizens demand a public tax filing process? Because they don’t want to make it easy for the government to impose lots of taxes. Americans have the lowest taxes in the developed world. Not especially for rich people, but for everyone else: https://www.heritage.org/sites/default/files/inline-images/I... . This isn’t the work of some secretive cabal of billionaires. Rich people hire accountants to do the…
how would that affect ease of tax generation? You would still need to have the proper congressional authorities vote on the matter, no? And sure, when I am in sweden I get taxed more because of VAT and such, but having a national standard where I can just declare my taxes for the year by pushing a single button for free through the government tax app is a benefit to outweigh any worry that you will get shafted by new…
> how would that affect ease of tax generation? You would still need to have the proper congressional authorities vote on the matter, no?
People aren’t paying attention to tax bills that are getting voted on. But when they do their taxes, they’re forced to actually work out how much they’re paying the government. A bill or invoice they get in the mail wouldn’t have the same effect.
As to the US system being unjustifiable, I think Europeans don’t really understand America. In an ideal world, I’d prefer a Swedish system with high taxes, lots of social services, etc. But Americans aren’t Swedes. They don’t trust their government, and they don’t really trust each other. A quarter of Americans polled favor their state seceding from the country (ranging from 20-34% depending on region). By comparison, only 15% of people in the Basque region of Spain want independence.
I live in Maryland, which is about the same population as Denmark and only moderately smaller than Sweden. It’s a “blue state.” Our capital is Baltimore. Schools in Baltimore spend 40% more per student than schools in Sweden, in a city where you can get a beautiful townhouse for maybe 1/4 of what it would cost in Stockholm. The schools should be amazing, right? No. They’re awful, with terrible test score and enormous gang violence. The city government is corrupt. Not in the way you probably think the US as a whole is corrupt (controlled by wealthy elite), but the sort of reciprocity that typifies developing countries. The former mayor has been convinced of felonies, and in February will probably receive a sentence of 5-10 years in prison.
So despite being a strongly blue state, we elected a Republican Governor by an overwhelming majority that promised to control spending, cancel public projects like transit lines, etc. Because we don’t trust (can’t trust) our government to use our tax dollars effectively.
So yes, there is support in America for things that make people think hard about how much they pay the government: https://www.youtube.com/watch?v=BcEhl5HfGMM. And it’s not irrational or crazy. Our situation is very different than what you face in Sweden.
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#355Earlier 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)
You are right, we can simulate evolution of galaxies but automating accounting is just beyond our ability as a species
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#356Now we're just left with this illogical part of the tax system: The State: Pay me taxes or I'll put you in a cage! Citizen: OK, how much do you need? The State: You tell me, but if you're wrong you'll regret it!
In Australia you do your taxes and then a few weeks later you either get a refund or a bill. If there's anything that doesn't add up in your filing they may ask you about it. Nothing to regret unless you knowingly filed incorrect information.
Edit: a lot of it is pre-filled (payroll, bank interest, investment distributions in my case), you just need to check against your own records.
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#357Earlier quoted context omitted.
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…
1040EZ died after tax year 2017: https://www.irs.gov/forms-pubs/about-form-1040-ez
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#358Earlier quoted context omitted.
And most people think of that money they get back as a bonus! Like it was never their money in the first place but a gift from the government
For people who aren't good at budgeting/saving, it can be a decent way of putting away money for a large purchase or two every year. It's a lot easier to raid a savings/retirement account than to get your IRS refund six months early.
People aren't terrified of plundering their retirement accounts? There are massive and scary tax penalties if you do....
Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#359Earlier quoted context omitted.
It may be worthwhile to consult a tax attorney. The IRS help line is just a help line, they aren't tax attorneys and they can't give legal advice, which I think this qualifies as. I'm not a tax attorney, or an attorney at all, and so this isn't legal advice, but IME if you make an honest mistake, the IRS will usually send you a letter informing you of this and you'll get a chance to make it right.
Interestingly enough, I've heard conflicting advice from different tax attorneys on this, which is one reason I was trying to research it myself.
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Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax
#360Now we're just left with this illogical part of the tax system: The State: Pay me taxes or I'll put you in a cage! Citizen: OK, how much do you need? The State: You tell me, but if you're wrong you'll regret it!
If you mess up your taxes, the IRS actually has a very reasonable process for making amends, with penalties that aren't egregious at all. It's mostly a small interest (like a couple percent above prime or something), which caps at 25% of the unpaid amount.
In fact it's the same interest they pay you if you were due refund and they were slow giving it back.
My main complaint is that it's a super, super slow process. They'll follow up years later, and each back and forth takes like three months.