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Killing TurboTax

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Re: Killing TurboTax

#321

Post by missedthecue »

colejohnson66 wrote: post #174
wheybags wrote: post #167

Something I never understood about us taxes - from reading discussions online, it seems like everyone needs to file taxes at the end of every year? Here it's only self employed, or people with rental or investment income. In a normal employer-employee relationship, the employer has to take care of it for you, they deduct taxes before sending the money to your account. This seems to be the way it works in most places,…

Correct. Companies like Intuit lobby the government to keep complex tax codes so they can provide services that make it easy.

It's not like Turbo Tax is the only thing standing between you and not having to do your own taxes. The entire system top down would need to be redesigned and the withholdings concept done away with. That'd be such a sweeping piece of legislation it will most assuredly never happen.

Re: Killing TurboTax

#322

Post by kingaillas »

wwww4all wrote: post #79
jounker wrote: post #47

Earlier quoted context omitted.

This is the solution. We can already do this. A pilot program was run. The problem is that the anti tax wing of the Republican party and Turbotax are actively opposed. Instead of developing software, we should be writing our representatives.

Democrats have the entire government now, President, senate and the house. Democrats had filibuster proof majority when Obama was president. Why are you just blaming Republicans?

>Democrats had filibuster proof majority when Obama was president.

For 2 years. And spent basically the entire time barely getting ACA through. Not a lot of "political capital" leftover for battling to have free tax filing.

Re: Killing TurboTax

#323

Post by fl0wenol »

numpad0 wrote: post #92
coldpie wrote: post #72

Earlier quoted context omitted.

Unless you really screw up[1], or are intentionally trying to screw the IRS[2], you don't have to worry about an audit. The IRS's goal isn't to bring down their wrath upon you, their goal is to accurately collect the taxes they are due. If you pay too little, they'll ask you to pay the difference. If you pay too much, they'll refund it. Really: I once used the single-payer tax table instead of the filing-jointly tax…

I wonder if someone could FOIA their audit software stack and put that up on GitHub and Docker Hub

Any code authored by or for (exclusively) the government is default open. Usually all it takes is a FOIA request; if you're lucky they're publishing it on github already. However there are carve-outs for areas where making the code public could impede the law-enforcement mission of the entity that uses it, that is, FOIA exemption 7E. Since the IRS knows that if you knew how the audit worked*, then you'd do your taxes "just so" to avoid the thresholds by running the logic yourself, which is not something they'd want to encourage. And it would definitely increase their audit casework load.

There's also the issue that if the code wasn't bespoke but also sold to non-government entities for similar missions (i.e. government does not hold exclusive rights), then it can be protected as the contractors IP. But for the IRS this would be rare, they are pretty unique and often do things their own way.

* You can sort of do this without the code. The IRS is not allowed by legislation to base an audit decision on any information that is not covered by eFile, so contents of forms 1041QFT and 990T, or any attachments to what could have been an electronically submitted form, is out of scope. As long as what you submit in the core set of forms aren't statistical outliers, then you're good.

Re: Killing TurboTax

#324

Post by astura »

dave5104 wrote: post #319
astura wrote: post #317

Earlier quoted context omitted.

No, it can work with the complicated path too, they present you with what they already know about you and give you the opportunity to add more information that they don't yet know. They then calculate what you owe and tell you. At some point they are going to calculate what you owe based on what you provide them and what is reported to them, no matter what. Laws that authorize "auto tax" can also come with extra repo…

Not to mention, I'm sure the "happy path" will accommodate a significant number of tax payers.

Currently, probably >85%, given that ~90% percent of households took the standard deduction in 2018.

Re: Killing TurboTax

#325

Post by ghaff »

azog_alone wrote: post #316
bob1029 wrote: post #298

"Killing TurboTax" is essentially a meme until we meaningfully simplify the tax code. There is no software development team on earth who could catch up with the full capabilities of TurboTax without some sort of fundamental shift in the business. I really hate to say this as someone who makes a living out of it, but dealing with the current amount of complexity in the tax code with a piece of software that a non-expe…

The reason the tax code is so complicated is BECAUSE OF TurboTax. They lobby heavily to keep things complex and have brought down potential competitors through legal means. As such, "killing TurboTax" is the correct first step.

I know it's nice to have a corporate bogeyman to rail against but it's not that simple. For example, there have been all sorts of tax deductions over the years to incentivize things like home energy efficiency improvements, EVs, solar power, charitable contributions, etc. And the mortgage deduction was/is intended to promote home ownership. I could go on. Someone can disagree with some of the choices around tax rates and certain weirdly specific deductions. But most people wouldn't argue that, for example, encouraging people to donate to charities is a bad thing.

Re: Killing TurboTax

#326

Post by OwlsParlay »

trymas wrote: post #296
lolsal wrote: post #282

TurboTax's offering is not just about literally filing my taxes. It's about managing risk that I'm not botching my filing in the form of missing something entirely, mis-filing, or leaving deductions on the table. Even if submitting forms online is entirely free, I'm willing to pay SOMETHING to make sure SOMEONE ELSE is responsible for making sure it goes well. I pay accountants for this for this exact reason. I'm sur…

It's a racket. Government already knows how much you owe them. So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"?

The US tax system is another one of those things about the US that looks utterly baffling to an outside observer from Europe. How on earth did it get into this state? How is this 'free'?

Re: Killing TurboTax

#327

Post by missedthecue »

clintonb wrote: post #192
chrisseaton wrote: post #102

Are accountants prohibitively expensive in the US? I don't use any tax software myself in the UK - I just pay an accountant $250 once a year and he does it for me (using some software I presume.) It's not really on my radar as things worth trying to automate or use software myself for, let alone building my own software! I'd have to be able to do it in just a few hours to be cost effective.

The idea of paying someone $250 when the government already has the data is ridiculous. Accountants are accessible to some, but we shouldn't need to pay someone when the government can do the calculations.

The government really doesn't have the data. Do they have cameras in your home detecting whether or not you paid for more than 50% of your child's living expenses?

Re: Killing TurboTax

#329

Post by saxelsen »

As a non-US resident, and by judging all the comments here plus the article's point about how hard it is to joust TurboTax from the top, what is the main benefit for a consumer to actually make the change? It seems like TurboTax actually does your taxes quite well and that it's pretty hard for competitors to catch up to the functionality. But was is the argument for competing with it?

Re: Killing TurboTax

#330

Post by robert_foss »

astura wrote: post #317
bob1029 wrote: post #312

Earlier quoted context omitted.

As noted in other comments here, an "auto tax" service only really works on the happy path. There are parts of the tax code which are highly subjective in more complex situations and require explicit elections on part of the filing party. These elections can have consequences far beyond the immediate tax filing transaction.

No, it can work with the complicated path too, they present you with what they already know about you and give you the opportunity to add more information that they don't yet know. They then calculate what you owe and tell you. At some point they are going to calculate what you owe based on what you provide them and what is reported to them, no matter what. Laws that authorize "auto tax" can also come with extra repo…

This is how it is done in Sweden. And after having lived in 2 other countries it is clearly the way to go.

The tax authority sends you a summary and you just approve it.

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