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Killing TurboTax

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Re: Killing TurboTax

#371

Post by sokoloff »

brigade wrote: post #362
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…

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.

I'm actually fairly shocked that $10K is the median income tax liability given that a substantial percentage of households pay no net federal income tax.

Re: Killing TurboTax

#372

Post by dllthomas »

astura wrote: post #314
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…

Which begs the question if they essentially already know how much tax they think you should owe (for most people) why don't they present that number to get first and let you either agree or disagree?

If we view it as an error checking process, it's better to come up with the two numbers independently. Whether the improvement is worth the costs, I don't know.

Re: Killing TurboTax

#373

Post by lcuff »

In addition to being very complex, tax codes change yearly. Whoever might take this on would have to take on that a tax code change made in December needs to be interpreted: What questions need to be asked to fill in the new line on one or more IRS forms? And any of the states can likewise make last minute changes. It's nasty time pressure because you have weeks to implement, test, and ship the accommodation to new requirements.

I also observe that the tax code was crazy complex before personal computers became popular in the eighties. Blaming Turbo Tax for the complexity is misplaced blame, though no argument they have a vested interest in keeping them complex, and they pay lobbyists to safeguard their interests.

Re: Killing TurboTax

#374

Post by eppsilon »

wwww4all wrote: post #211
drewg123 wrote: post #93

Earlier quoted context omitted.

Because of Grover Norquist and his organization (ironically named Americans for Tax Reform). Their "Taxpayer Protection Pledge" taken by most Republican lawmakers (95% before 2012), locks them into supporting his policies. The problem is that he views any attempt to simplify tax filing just like a tax increase (presumably since people will be less upset about paying their taxes), and uses his influence to lobby again…

The president can simply order IRS to give taxpayers itemized list of taxes and income information they have and the taxes for the year. If the taxpayer agrees, they can just sign and get refund or pay additional taxes. If taxpayer disagrees, they can submit additional information. The Democratic president can do this right now, for this tax year.

Wouldn't this cost money to implement? Money that Congress would need to appropriate?

Re: Killing TurboTax

#375

Post by derekp7 »

munk-a wrote: post #369
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…

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…

The overall law had a good reason, to keep parents from transferring appreciating assets to their children (who wouldn't have any other income), in order to lessen the tax burden of those assets. So the tax code references any unearned income.

It just isn't logical for most people to know that their unemployment income is also unearned income, and that you could be underpaying your taxes even after filling out the 1040 completely (and following the instructions in the 1040 instruction book).

Maybe this case is called out specifically, it doesn't apply to me so I haven't looked for it in the instructions, however it was just something that I ran across that made me scratch my head.

Re: Killing TurboTax

#376

Post by tylerhou »

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…

I don't think anyone here is advocating for a system where you cannot prepare your tax return privately. The problem is that private tax preparation corporations have lobbied to make an IRS system illegal.

Re: Killing TurboTax

#377

Post by pkoullick92 »

Hello HN! I'm the founder of Keeper Tax (keepertax.com) and killing TurboTax is our mission.

We recently raised a large round, and we're hiring engineers, designers, data scientists. Ping me at paul@keepertax.com

Re: Killing TurboTax

#378

Post by marshallward »

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…

Filing taxes online in Australia is free, and I'm sure it's of comparable complexity.

This does not exist in the US the highest levels of government have no incentive to provide it.

Re: Killing TurboTax

#379

Post by yunesj »

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 didn’t see evidence in the linked article and the cited article therein that Intuit tried to prevent a simplification of the tax code. They just tried to stop the government from trying to build competitor software (partially paid for by Intuit and others in the tax accounting industry). Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it.

I think it’s unlikely that Intuit has the power to steer the complexity of the tax code. States like NY and CA, for example, oppose a standardization of tax law for “road warriors” because they make so much money from non-resident workers who step foot in their state.

US tax policy is about 70,000 pages (mostly regulations, bulletins, and case law). And that doesn’t include state and local taxes.

If you stop being an easy case, for example you want to claim FEIE within 5 years of spending > 30 days in the US, then the IRS tells you to get a lawyer to pay for a private letter ruling. This is because, where other countries don’t tax their citizens income worldwide, the US does and then gives a moderate exemption. AFAIK, US tax code complexity dwarfs that of any other country.

I find it hard to believe that it’s TurboTax’s fault, a day after reading about Sen. Warren’s plan for a wealth tax and a $100B to the IRS to help them calculate and enforce it...

Re: Killing TurboTax

#380

Post by zimpenfish »

ghaff wrote: post #325
azog_alone wrote: post #316

Earlier quoted context omitted.

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…

> all sorts of tax deductions over the years to incentivize things like [...]

But plenty of other countries have those too and manage to not have an insanely complex tax-filling regime?

> but it's not that simple

I think if the main difference between the US and other countries is the aforementioned "corporate bogeyman", it probably does boil down to being that simple.

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