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IRS tests free e-filing system that could compete with tax prep giants

washingtonpost.com

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Re: IRS tests free e-filing system that could compete with tax prep giants

#61

Post by jonny_eh »

RandallBrown wrote: post #59
_yb2s wrote: post #51

Earlier quoted context omitted.

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

How would you know if you're going to take the standard deduction without doing your taxes? I'm fairly certain the federal government doesn't know about all my deductions.

> possibly with the option to submit extra details they are missing like deductions

Re: IRS tests free e-filing system that could compete with tax prep giants

#62

Post by Kalium »

RandallBrown wrote: post #59
_yb2s wrote: post #51

Earlier quoted context omitted.

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

How would you know if you're going to take the standard deduction without doing your taxes? I'm fairly certain the federal government doesn't know about all my deductions.

For the most common and most impactful ones, like 1098s, the IRS is aware because they are sent the information directly.

Are they going to be aware of all deductions in all cases? You are absolutely correct, there's no way that's correct.

Re: IRS tests free e-filing system that could compete with tax prep giants

#63

Post by cft »

ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

This is a dangerous path. First this, next the government just sends you the tax bill, without you needing to file (and you can dispute it), and then CBDC where every microtransaction is surveyed and sanctioned (or not).

Re: IRS tests free e-filing system that could compete with tax prep giants

#64

Post by testfoobar »

ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

> And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem.

You can generalize this to the funding of the US government. The system obfuscates the stark reality: the US government spends resources faster than it collects them. It makes up the difference it two ways: deficit spending and off-the-books liabilities (SSA and Medicare being the biggest). Inflation is a solution to these problems.

Re: IRS tests free e-filing system that could compete with tax prep giants

#66

Post by runako »

"The IRS currently refers people seeking no-cost filing options to a consortium of companies that provide free e-filing for taxpayers below a certain income level. Though 70 percent of taxpayers qualify for those products, fewer than 3 percent of taxpayers use them, according to a Government Accountability Office report."

This low uptake absolutely has to be one of the impediments to a rollout of a free IRS-run tax service. The argument is simple: why should we invest resources in expanding our free services when taxpayers don't use what we already make available? Is there data to support the notion that usage would meaningfully increase if we supported 100% of filing cases? (I would expect the opposite to be true; as tax situations get more complex, filers have more incentive and means to hire specialized help.)

Re: IRS tests free e-filing system that could compete with tax prep giants

#67

Post by bombcar »

RandallBrown wrote: post #59
_yb2s wrote: post #51

Earlier quoted context omitted.

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

How would you know if you're going to take the standard deduction without doing your taxes? I'm fairly certain the federal government doesn't know about all my deductions.

The standard deduction is now so high ($25,900) that for the vast majority of standard wage-slave Americans, it will not be reached.

> In 2017, 47.1 million taxpayers itemized deductions, relative to 15.3 million in 2018. This dramatic shift maps to a more than 19 percentage point drop in itemizers as a percentage of all taxpayers, from 30.90% to 11.47%.

The majority of this was people's mortgage deduction went from being more than the standard deduction (so itemization is worthwhile) to being less (so it's not worthwhile).

You can roughly estimate what your itemized deduction might be.

Re: IRS tests free e-filing system that could compete with tax prep giants

#68

Post by BlackjackCF »

jandrese wrote: post #16

For what it is worth, even with my medium-complex tax return I have had great results with freetaxusa.com for the past few years. The first couple of times we used it we ran the taxes through TurboTax and FreeTax at the same time and due to better UI the FreeTax version was faster and less confusing. That said, at the end of the process after entering all of the same information in the same places the TurboTax one di…

I really hope that we can get closer to the European experience with taxes.

I was flabbergasted that when I was living in Ireland, I could do my taxes by going online, clicking a couple boxes, and hitting submit.

Re: IRS tests free e-filing system that could compete with tax prep giants

#69

Post by Finnucane »

linuxftw wrote: post #43

The IRS has no incentive to make sure you get all the deductions you're allowed. They don't have incentives to make sure the software works well under load and at scale. Whatever they put out will likely be half-baked, and the software will degrade rapidly because the tax laws change each year. I suspect, that given the currently complexity of the tax system itself (rather than the filing, which seems to be pretty st…

Obviously, what the tax preparers are afraid of is that the IRS could provide system that works perfectly well for a large majority of their customers, leaving them only the people with more complex needs, or need to manage a lot of deductions, etc. No one would be forcing you to use the IRS system if you think it doesn't work for you.

Re: IRS tests free e-filing system that could compete with tax prep giants

#70

Post by RajT88 »

_yb2s wrote: post #51
ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

In fact, other sane industrialized nations have really got it figured out:

https://www.pbs.org/newshour/show/dreading-taxes-countries-s...

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