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Killing TurboTax

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Re: Killing TurboTax

#401

Post by sokoloff »

Larrikin wrote: post #367
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…

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.

Answered a sibling with a similar question: https://news.ycombinator.com/item?id=26333946

Re: Killing TurboTax

#402

Post by BugsJustFindMe »

jcranmer wrote: post #257
BugsJustFindMe wrote: post #206

Earlier quoted context omitted.

The US's system of tax deductions makes it impossible for your employer to know how much to remove from your paycheck except in the simplest of scenarios. They may not know how many children you have or how much money your spouse makes if you file jointly or how much you pay in rent or whether you're a first-time home buyer or what your deductible medical expenses were for the year or whether you had education expens…

There is literally a form you fill out for your employer to tell them this information so they how to much withhold from your paycheck: https://www.irs.gov/pub/irs-pdf/fw4.pdf

W4s are optional, have to be done in advance, and ask you to guess. Doing it at the end without guessing is called filing your tax returns.

Re: Killing TurboTax

#403

Post by jccooper »

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,…

Employers do witholding the US. Filing at the end of the year is doing a calculation to determine if the withholding is correct and if you owe extra or are due a refund. The factors determining total liability aren't simple enough that paycheck withholding can be entirely accurate.

Re: Killing TurboTax

#404

Post by angott »

jeegsy wrote: post #385
Finnucane wrote: post #33

Earlier quoted context omitted.

Turbotax et al. lobby heavily to prevent this. Given that much of the relevant information--W2s, 1099s, etc., are already reported, you'd think that this would be easier for a very large percentage of taxpayers. But it would effectively kill TurboTax's business.

Does anyone have any idea what these lobbyists actually say? What excuse (however lame) that they actually give for blocking simplification etc?

They usually claim that if people didn’t have to file their own taxes, they would not be aware of how much they are getting taxed. In their view, this would eventually make it very easy for the government to increase taxes without significant protests from the public.

Re: Killing TurboTax

#405

Post by Dirlewanger »

specialist wrote: post #139
nicoburns wrote: post #87

Earlier quoted context omitted.

Couldn't the legislators just... not do what the lobbyists want? Are they really all that corrupt?

Legislators are basically doing triage, responding to perceived consensus. Kinda like a product manager. Think attention economy. There's 10,000s of bills filed every year. No one has the resources or bandwidth to handle that. Any given legislator has 1 maybe 2 issues that they care about, for which they will advocate an agenda. The rest, they rely on what they're hearing. Intuit's lobbying effectively drowns out alt…

>Most legislators would LOVE to hear from their constituents

Yeah, I'm sure that desire to hear from them is only up to a point, at which they love the lobbying dollars more.

Re: Killing TurboTax

#406

Post by projektfu »

This sounds to me like the "invoice problem", or whatever you might call it. Consider business invoices. Tens of thousands of entities have to share the same general flavor of data, and each already has a system for doing it. They all have to receive and process that data regularly, and have their own systems, charts of account, item names, etc. Harmonizing all that is very difficult.

The IRS offers standard forms but there is often more than one way to select them or fill them out. For example, on an 1120S, the accountant might place an expense in one of the standard categories or in a table of other expenses. But even more difficult, every user might have different ways of categorizing their income and expenses, and the people sending them forms might do it one way or another. Such a service would have to be opinionated and convince each reporting entity to adopt the system in place of the home-built one they're already using.

Re: Killing TurboTax

#407

Post by briandear »

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.

https://m.youtube.com/watch?v=TruCIPy79w8

Re: Killing TurboTax

#408

Post by lallysingh »

jnwatson wrote: post #353
lallysingh wrote: post #341

Earlier quoted context omitted.

I think if there was a basic extensible system, that could grow into a full product. Start with 1040EZ in year 1, then grow with your customers' needs as they age and need more. TT has a large moat but behind it must be a ton of technical debt. Would an open source solution work here?

You’re imagining an army of tax accountants to continually keep a system up to date to put themselves out of business?

They use software too. Their competition is turbotax.

Re: Killing TurboTax

#409

Post by lolsal »

trymas wrote: post #331
lolsal wrote: post #304

Earlier quoted context omitted.

> It's a racket. Yea, possibly (I agree with you). It is as much a racket as lots of other things. Doesn't excuse it being a racket, but TurboTax is not an anomaly. > Government already knows how much you owe them. This is false. If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investments, you're giving the IRS more than you have to…

> If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investment, you're giving the IRS more than you have to. I do take advantage and do not lift a finger to achieve it, because the tax man knows about this already. > However, you're over-simplifying things and ignoring the complicated parts. IMHO, you are overcomplicating things. If t…

> I do take advantage and do not lift a finger to achieve it, because the tax man knows about this already.

I think you're mistaken. The tax man does not already know what charitable donations I've made, or depreciation I would like to claim, or ....

> IMHO, you are overcomplicating things. If tax laws are as complex as you wish them to be, if the tax-man cannot know what you owe to it - then it's just a very good environment for the wealthy not to pay anything, while screwing over other 99% with over complicating things.

As an aside, I do not have any wishes regarding the tax system one way or the other. I'm only subject to the tax laws, I don't really care what they are.

The Tax Man® knows what you owe based on income that has been reported to it by places like your job, but only if your work does withholding and reports it to the IRS. It could report it without withholding (I think?), or you could be getting a 1099. If all the income from your 1099s is reported accurately and timely, this would be similar to a place that gives you a W2. This doesn't always happen, or there could be disputes.

> I do not pay taxes in the US and unless you have a company, I guess 99% of individuals do not need to do any taxes at all, i.e. just confirm what the tax agency already knows about them.

I doubt it's anywhere close to 99% :)

Optional things that the government might not know about: kids, charities, investments, depreciation, rebate programs (like solar, cash for clunkers, etc), inheritance, mileage deductions, moving across state lines, getting divorced, getting married, becoming a widow, losing a child, etc. There's a ton of stuff that the government doesn't know about _unless you tell it_.

If I make a bunch of money mowing lawns, my neighbors probably aren't sending me 1099s, but I really probably should report that income and pay taxes on it. The government wouldn't know about it unless I reported it (which is why a lot of folks don't bother reporting income like that, especially if it's a small enough amount).

I'm not a tax lawyer, nor a tax expert.

Re: Killing TurboTax

#410

Post by adwww »

leshow wrote: post #227

This discussion feels incomplete without mentioning "return-free filing". A lot of countries you don't even need to send a return because the government already has all the info you need. https://www.taxpolicycenter.org/briefing-book/what-other-cou...

Yeah as a Brit the whole discussion above about "nobody could replace TT because it's so complex" missed the point by a country mile.
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