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Killing TurboTax

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Re: Killing TurboTax

#621

Post by harperlee »

maxerickson wrote: post #450
sokoloff wrote: post #368

Earlier quoted context omitted.

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 m…

A tax preparer could presumably still help you make the decision about what information to share with the IRS. I guess they would be something else, but you get the point.

But isn’t it tax fraud if you consciously withhold information that would negatively impact on your total obligation?

Re: Killing TurboTax

#622

Post by nextaccountic »

cies wrote: post #620
null0pointer wrote: post #527

Earlier quoted context omitted.

I agree, a vastly simplified tax code is needed. Here's my dream for a simpler tax code: The only tax is a Sales tax/VAT/GST. Pros: - Individuals never have to think about tax. It would completely eliminate tax returns. That alone is worth it's weight in gold since tax returns are such a time and money burden. - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spend…

> Here's my dream [...] The only tax is a Sales tax/VAT/GST. Ok, I'll share mine: the only tax is on pollution and/or scare resource usage. It's weird that we tax anything that's considered "good" in my opinion. Taxing housing, income from labour, consumption -- who came up with these shit ideas? Tax only, ONLY, what is considered bad (or should be reduced to a minimum), mainly: pollution. And the market will organiz…

Fully agreed! We need to tax the hell out of such externalities.

Perhaps the main tax of the whole humanity should be a carbon tax, at least in the 21th century.

Re: Killing TurboTax

#623

Post by bob1029 »

freddie_mercury wrote: post #595
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…

> There is no software development team on earth who could catch up with the full capabilities of TurboTax This is obviously false. The IRS software handles everything TurboTax does and more. As does the software that professional accountants use, such as ATX Also: TurboTax's many retail competitors like HR Block.

>Catch up

It helps when you are the incumbent and you get to build the system in lockstep from day 1.

Re: Killing TurboTax

#624

Post by hahajk »

alexchamberlain wrote: post #596
null0pointer wrote: post #527

Earlier quoted context omitted.

I agree, a vastly simplified tax code is needed. Here's my dream for a simpler tax code: The only tax is a Sales tax/VAT/GST. Pros: - Individuals never have to think about tax. It would completely eliminate tax returns. That alone is worth it's weight in gold since tax returns are such a time and money burden. - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spend…

You can eliminate tax returns for most people by getting their employer to do it for them, which is effectively how the UK PAYE system works. Only those paid more than 100k, the self employed or others who want to claim certain tax incentives have to file what's known as a self assessment.

In the US our employers also submit our taxes to the govt. But because they don’t have enough information about our lives (mortgage payments, donations, savings incentives) they send the wrong amount. In April we “file our tax return” and pay/have returned the difference.

Re: Killing TurboTax

#625

Post by pydry »

null0pointer wrote: post #537
Others wrote: post #534

Earlier quoted context omitted.

I think this is fundamentally a regressive idea. Currently the very poor pay zero (or effectively zero) income taxes. No matter how you structure the sales tax, you cannot go below zero. (I think negative sales tax is not actually realistic, nor particularly progressive.) A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest.

Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage. > A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest. That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only s…

>That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only spending.

If you taxed only assets it wouldn't be a problem. Mo money mo taxes.

Whether you want to tax predominantly assets or spending usually reflects which side of the capital divide you see yourself identifying with - predominantly a recipient of unearned income (e.g. landlord/FIRE) or a payer (e.g. renter).

Re: Killing TurboTax

#626

Post by Broken_Hippo »

bob1029 wrote: post #312
astura wrote: post #309

Earlier quoted context omitted.

The IRS themselves need to provide this "auto tax" service.

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.

Most folks don't have taxes that are that complicated: most of those are businesses.

Most people file somewhat simple returns. We can get most people using "Auto-tax", where basically the IRS sends you some information to check over, including what you are going to get back or owe. We can do this for all of the commonly used forms, not just the EZ forms. Most folks aren't subject to "subjective" taxes.

Other places do it, after all. The IRS has the information. And it would probably increase tax revenue since it is easier to collect taxes that are easy to pay. (Sales tax is collected at purchase since few people self-report: Sales tax is even easier on the average person if included in price instead of added at the register).

You can require that the IRS err on behalf of the taxpayer and require it to give the maximum refund (or pay the least tax). And it isn't like the auto-file would be final: You still get the option for corrections (because mistakes happen) and can still self file.

Re: Killing TurboTax

#627

Post by Broken_Hippo »

marshallward wrote: post #378
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.

To be fair: Filing your taxes in the US is free. No one is going to force you to pay someone to do them for you, which is what TurboTax and the like are doing, usually through software.

If you don't understand the tax forms, though, or can't figure out the codes, you are stuck paying someone. The IRS won't give definitive answers if you call them.

Re: Killing TurboTax

#628

Post by sokoloff »

harperlee wrote: post #621
maxerickson wrote: post #450

Earlier quoted context omitted.

A tax preparer could presumably still help you make the decision about what information to share with the IRS. I guess they would be something else, but you get the point.

But isn’t it tax fraud if you consciously withhold information that would negatively impact on your total obligation?

There is a lot of financial information (which is private by default) which is irrelevant to a person’s current tax obligation.

That’s the information that I only want my paid advisor(s) to have; this is a privacy concern, not a cheat-on-taxes concern.

Re: Killing TurboTax

#629

Post by moduspol »

buu700 wrote: post #466
maybelsyrup wrote: post #463

Earlier quoted context omitted.

Thanks for your reply. I hear you 100%, and a few years ago your objections would've appeared in my own head were I to have even considered writing what I wrote. I simply wouldn't have written it. But it's really interesting to me that what you wrote is about the feasibility of the idea and not the idea itself. Of course, you may think it's a shitty idea - and it may indeed be! But I'd claim that it says something re…

Rather than nationalize Intuit, if we take for granted that TurboTax is indeed too complicated a product to efficiently replicate, couldn't the government simply strike a deal to acquire the TurboTax IP? From there, we'd just shut down or deprecate the original TurboTax service, and launch our rebranded fork as a free government-provided service like healthcare.gov (could call it taxes.gov). That would work as a shor…

It would work for a few years. Then more laws pass, court cases get decided, and the tax code would get more complicated. Now even TurboTax is a pain to use, and (as it ends up) the bureaucrats in charge of improving it are just as incapable as the ones rolling out healthcare.gov and similar disasters.

And then to deal with that, a new company emerges with a service that makes even TurboTax easy to use!

The idea that bureaucrats would competently manage it this time is difficult to believe.

Re: Killing TurboTax

#630

Post by FabHK »

null0pointer wrote: post #537
Others wrote: post #534

Earlier quoted context omitted.

I think this is fundamentally a regressive idea. Currently the very poor pay zero (or effectively zero) income taxes. No matter how you structure the sales tax, you cannot go below zero. (I think negative sales tax is not actually realistic, nor particularly progressive.) A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest.

Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage. > A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest. That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only s…

> more how negative sales tax is unrealistic

In this proposal, sales tax is the only tax. You can't run a government without money.

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