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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

#431

Post by CivBase »

monkeycantype wrote: post #329

This is at number two on the front page, I'm wondering how much this is driven by a specific interest in this story, or whether other people are having the same, probably childish emotional reaction that I am, an almost dumbfounded disbelief that a major institution is not charging headlong towards death cult dystopia. A public institution has acted seemingly for public good. Regardless of whether its driven as much…

Politicians aren't evil, just self-interested like most people. It just so happens that the nature of their job sometimes means serving others' interests is in their own best interest. Sometimes.

Happy new year.

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

#432

Post by fountainofage »

adventured wrote: post #423
rockinghigh wrote: post #419

Earlier quoted context omitted.

We know what the IRS knows because the majority of people get the same forms as the IRS as far as income goes: W2, 1099, 1098, ... Unless you’re self-employed, the IRS only misses some deductions or foreign income.

Ever performed a lot of stock trades in a single year and had the IRS believe that you owe them $5 million in income taxes because they assume every sale you made was all profit? That's always fun, especially when they think they're right and they're entirely wrong. The IRS information is at times comically incorrect in fact.

If you're trading more than $20 million a year in stocks, you are in the vast minority that everyone here acknowledges would need to adjust and file your taxes manually.

99.999% of the US population is not trading $20 million a year in stocks, and everyone else here is merely talking about the 95% of the population that has straightforward tax returns.

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

#433

Post by TeMPOraL »

layoutIfNeeded wrote: post #413
Sabinus wrote: post #406

Earlier quoted context omitted.

Australia gives tax cuts if you have a family with children. (Family tax benefit part A and B). Do you think that's unacceptable social engineering?

That’s ok, because by having children you provide a service to the state (i.e. ensuring its existence in the long run).

But this argument can be trivially extended to all other "social engineering" taxes. Vice taxes make you drink or smoke less? You're reducing state's expenses on healthcare, law enforcement and social services. Tax benefits for installing photovoltaics or buying electric cars? You're helping to improve the quality of life, again saving state on healthcare, and in the future, on various forms of crisis management once the climate issues start taking their toll in full.

(FWIW, I'm generally in favor of this kind of "social engineering" when done by democracies.)

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

#434

Post by samus »

the_mitsuhiko wrote: post #427
irrational wrote: post #426

Earlier quoted context omitted.

What they don't know is my charitable deductions. My charitable deductions greatly reduce my taxes. If I went with their automagical tax filing process I'd lose out on those deductions.

That could be automated too largely. In Austria charities submit this information to the government and it automatically gets added to your prefilled tax filings.

True, this was a very nice suprise on my last tax filing. I had even almost forgotten myself about those donations!

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

#435

Post by peter303 »

burfog wrote: post #379
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…

If it was automatic, income would be missed. The government would be revealing what it doesn't know about, and people would not supply the missing information. Under the current system, people aren't sure what the government is aware of. Because we get in trouble for leaving things off, we are more likely to report everything.

Rarely do I have income not on a W2 or 1099. Should automated.

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

#436

Post by concerned_user »

Thorentis wrote: post #421
burfog wrote: post #379

Earlier quoted context omitted.

If it was automatic, income would be missed. The government would be revealing what it doesn't know about, and people would not supply the missing information. Under the current system, people aren't sure what the government is aware of. Because we get in trouble for leaving things off, we are more likely to report everything.

This is why the Australian system is better. Make people file a tax return, but auto-populate it with the data the government already knows. And at the end include a tick box clause that essentially says "I have included everything and reviewed the autofill info, and if I have omitted anything later discovered I will be prosecuted". 20 seconds to file your taxes if there's nothing unknown. Very easy to add extra info…

Same here in Europe, my tax form is auto-filled I only have to check the numbers and confirm, with same warning and laws to back it up in case you decide to hide income.

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

#437

Post by Cougher »

pishpash wrote: post #420
dahfizz wrote: post #302

Earlier quoted context omitted.

> except we don't have the expertise to judge their performance. Well, this is a bit different in that regard. Last time I tried it, it was free to put all my info into turbo tax and see what my amount owed would be, and then it would be a fee to actually file. I assume most tax software works that way. So it's actually very easy and objective to see the performance of these systems. It would obviously be a big hassl…

I can assure you the secret sauce in "exploiting" tax law is almost never in choosing one thing or another during filing (there should only be one optimal answer once the facts are already created), but in tax planning. The tax software even hints at that. Paying for tax filing itself is basically a low-level scam.

Tax filing is very complicated and ridden with risk if you don't check the right boxes.

"there should only be one optimal answer once the facts are already created"

Yes, there should be. The reason why accountants can make a living filing taxes for fee is because that optimal answer is often difficult to find.

"Paying for tax filing itself is basically a low-level scam."

Not for me it isn't. If a private company can create a service that makes filing a lot easier and safer, I will gladly pay the fee.

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

#438

Post by Cougher »

catalogia wrote: post #374
dahfizz wrote: post #121

Earlier quoted context omitted.

I think it comes down to who people trust. Americans on the whole don't trust their government quite a lot. If the government just said "you owe X in tax this year", nearly everyone's knee jerk reaction would be that the government is overestimating and cheating them. On the other hand, you can pay a flat fee to let a third party fight the government on your behalf. That's something that many Americans like the sound…

> 1040EZ, if you even know what that is I think you buried the lead here. American public schools, part of the American government charged with teaching children and funded by taxes, don't teach kids how to pay taxes to the American government (maybe it sometimes happens, but it's certainly not standard.) It's ludicrous.

I'm not disagreeing with you, but how are schools supposed to teach kids how to pay taxes when it's such a convoluted specialty that requires college level education to learn?

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

#439

Post by Cougher »

kerkeslager wrote: post #377
rayiner wrote: post #301

Earlier 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…

1. This doesn't make any sense. The easiest way for the government to impose more taxes is to raise the percentages on the taxes they already collect. Private filing has nothing to do with it. 2. Americans don't have the lowest tax rates in the developed world. Mexico, Ireland, Chile, Turkey, and South Korea all have lower tax rates[1]. And in some cases the governments provide more services with less money because t…

"And in some cases the governments provide more services with less money because they're not spending half their budget on occupying other countries."

This. The American military is perhaps the largest and most wasteful social program on the planet. Americans spend way too much time trying to find their way around this elephant in the room.

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

#440

Post by azinman2 »

adventured wrote: post #423
rockinghigh wrote: post #419

Earlier quoted context omitted.

We know what the IRS knows because the majority of people get the same forms as the IRS as far as income goes: W2, 1099, 1098, ... Unless you’re self-employed, the IRS only misses some deductions or foreign income.

Ever performed a lot of stock trades in a single year and had the IRS believe that you owe them $5 million in income taxes because they assume every sale you made was all profit? That's always fun, especially when they think they're right and they're entirely wrong. The IRS information is at times comically incorrect in fact.

Which is why most countries have a system that shows you what they think, and you can accept or not. It’s not like the majority of people are in such a situation, and likely over time that will become less common as its often a byproduct of legacy systems / mergers that lose the original transaction.
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