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Killing TurboTax

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Re: Killing TurboTax

#361

Post by StillBored »

glial wrote: post #66
xrd wrote: post #55

Earlier quoted context omitted.

> please don't use this software to file your taxes for the 2020 / 2021 tax season. I wonder if there is a PR that Intuit filed to add this to the readme. Seriously, I wonder how much money Intuit has spent to terrify people into using their software. Each year, I look around for alternatives so I can avoid giving them money, and each year I find some reason to grow fearful of an IRS audit and go with the company tha…

I have used TaxAct successfully for the last several years and they're great. (just a happy customer)

It holds your hand a lot less than taxcut or turbotax though. Its basically a very thin shim on top of the IRS forms and instructions. Other than the electronic filing and a couple pretty basic hints, once you have some history and are vaguely aware of tax credits for various things, its barely easier than the IRS instructions in the old paper tax forms.

I tend to use taxcut, which is a bit closer to turbotax, but frankly its messed up things that I only found by reading a paper copy of the return before filing and noticing numbers that didn't make sense (doubling values by adding imported values with hand entered ones, that kind of thing). I had problems like that with turbotax in the 1990's but haven't used it since the bootloader fiasco.

Re: Killing TurboTax

#362

Post by brigade »

sokoloff wrote: post #343
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…

There is a much greater depth of detail that I provide to my tax preparer than I'd be willing to share with the IRS. I tell my tax preparer everything and have perfect confidence that my taxes will be prepared correctly and in accordance with the tax code and that nothing which is not required to be disclosed will be disclosed. Much of what I provide to my preparer is irrelevant to my tax obligations and anything tha…

You do realize that $1k is about 10% of the median household income tax liability?

I can't imagine the majority of people happily accept a 10% (more for half of households) tax hike, when companies already CC the IRS on all the forms they're regurgitating.

Re: Killing TurboTax

#363

Post by dllthomas »

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…

Not that I expect it to succeed, but I wonder what would happen if you tried throwing machine translation at the raw tax code.

Re: Killing TurboTax

#364

Post by dsr_ »

mandelbrotwurst wrote: post #360
derekp7 wrote: post #356

Earlier quoted context omitted.

To give an example of complexity that can hit "normal" people, something I just learned yesterday. If you are between 18 and 24, and a student, then if you had received unemployment income that income is considered "unearned income". Therefore it is subject to the highest marginal tax rate (tax bracket) that your parents fall into (which is 22% - 24% for quite a few people). To me, that is kind of nuts, and not somet…

By “and a student” do you mean claimed as a dependent by someone else?

Yes, because if you aren't a dependent, it's income for your own return, not theirs.

Re: Killing TurboTax

#365

Post by koboll »

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"?

Seems like a really easy first step would be for Democrats to pass a bill allocating money for the IRS to build a What You Owe API that banks and companies can access. Then every bank on the planet can implement a "Click to pay your taxes" button.

Attack the problem at the source.

Re: Killing TurboTax

#366

Post by jonas21 »

Cymen wrote: post #348
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…

This is my experience too. I was audited and they do send you a "shock" letter or at least they did in my case claiming I owed roughly $15,000 USD. After fixing my mistakes (and submitting an updated filing), they sent me a check for a bit more than $1,500 USD. Plus I learned about my mistakes so it was a win-win (as I learned with just enough time to not repeat the same mistake for the next year's taxes). I had an A…

It sounds like you got a letter from the IRS's automated underreporter program. I believe these are more common (and less painful) than an actual audit.

Re: Killing TurboTax

#367

Post by Larrikin »

sokoloff wrote: post #343
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…

There is a much greater depth of detail that I provide to my tax preparer than I'd be willing to share with the IRS. I tell my tax preparer everything and have perfect confidence that my taxes will be prepared correctly and in accordance with the tax code and that nothing which is not required to be disclosed will be disclosed. Much of what I provide to my preparer is irrelevant to my tax obligations and anything tha…

What is an example of something legal that you would be afraid of the IRS seeing?

I can't imagine any scenario that most people (anywhere close to fifty percent of tax payers) would be willing to lose a significant portion to all of their refund check by needing to pay a tax preparer potentially thousands of dollars.

Re: Killing TurboTax

#368

Post by sokoloff »

harperlee wrote: post #354
sokoloff wrote: post #343

Earlier quoted context omitted.

There is a much greater depth of detail that I provide to my tax preparer than I'd be willing to share with the IRS. I tell my tax preparer everything and have perfect confidence that my taxes will be prepared correctly and in accordance with the tax code and that nothing which is not required to be disclosed will be disclosed. Much of what I provide to my preparer is irrelevant to my tax obligations and anything tha…

May I ask examples of things that you are not confident sharing with the IRS, that you do not have the obligation to share with the IRS, and that can affect the taxes you owe? In my (foreign) mind, whatever might affect your obligation final number you are legally required to do so (either preemptively or when asked), so I don't fully understand.

Many things that I tell my preparer are needed later, but not now. (Tax basis for RSUs that vested. Value of capital improvements to my property.)

Other things are needed only if we elect to method A of calculation, but not if we use method B of calculation. So I give him all the data; he computes my obligations using method A and method B, chooses the better option, and reports only the data needed to support that method's calculations.

I pay my preparer to be an expert in tax code, to represent me in any audits, and incidentally to prepare my return correctly.

Part of that expertise is that I don't have to be an expert, so I tell him everything and he politely rolls his eyes and smiles when I dump irrelevant things on his desk.

Re: Killing TurboTax

#369

Post by munk-a »

derekp7 wrote: post #356
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…

To give an example of complexity that can hit "normal" people, something I just learned yesterday. If you are between 18 and 24, and a student, then if you had received unemployment income that income is considered "unearned income". Therefore it is subject to the highest marginal tax rate (tax bracket) that your parents fall into (which is 22% - 24% for quite a few people). To me, that is kind of nuts, and not somet…

I disagree that it's nonsensical for it to work this way since that unemployment benefit is being granted after your parents are claiming that they are supporting you - so essentially they're getting a big tax deduction on their income for your costs but then the unemployment benefit is being claimed to make sure for a lack of them covering costs - in a simple world one might make the other ineligible but that could result in some folks being put through unreasonable financial hardships due to poor planned or ill-intended returns from their parents so this allows that benefit to be given while also recognizing that something going on here is double dipping.

If you are financially independent then you should make sure your parents aren't claiming you as a dependent, if you aren't then you should be receiving those covering funds from your parents since that's the sort of dependency the dependent class is all about.

Re: Killing TurboTax

#370

Post by StillBored »

lotsofpulp wrote: post #153
chrisseaton wrote: post #112

Earlier quoted context omitted.

> Each year, I look around for alternatives so I can avoid giving them money Why not pay an accountant? Why is everyone trying to do their own taxes? By the time you've spent a couple of hours looking for alternatives... you might as well have just paid a professional to do it!

It’s pretty simple to do your own taxes unless you have your own business and partnerships and whatnot. Spend a couple hours reading the instructions, use the IRS free fillable forms website, and you do it once and every year after it’s quick and easy. Things don’t change much year to year. If you don’t understand, post a question a personal finance forum and someone will pipe in with an answer.

Actually IMHO, the difficulty with any of these things are tracking the right metrics. Particularly for "hobby" style businesses. You find out at the end of the year trying to avoid paying a bunch of taxes on something that didn't really make any money, that you mixed up or failed to compute your vehicle mileage correctly (or whatever).

So, having an accountant handling all the details, in the en puts the information at your fingertips that otherwise you have to scrape out of the box of receipts/etc. The tax filing parts are easy.

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