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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

#81

Post by johnny99k »

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.

This is why making it this easy is a win for the government. 99% of the people are lazy and will just let them do it, basically giving them free money.

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

#83

Post by alfalfasprout »

The software is nice and all... but the real problem is that the tax code is just way too complex. If you have properties, RSU income, other investment income, W2 income, and have to deal with multiple states you can have three different CPAs come up with three different numbers.

At the end of the day, if you're a billionaire earned income is a teeny tiny part of your earnings and most of it is kept unrealized for tax purposes. As a result, the doctor or software engineer ends up bearing a 50+% tax burden while ultra high net worth individuals are lucky to pay even close to the LTCG rate on all their income.

The tax system is oppressive under the guise of being "progressive" but really it prevents social mobility.

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

#84

Post by jandrese »

jandrese wrote: post #48
bubbleRefuge wrote: post #35

Earlier quoted context omitted.

10K limit on mortgage interest from primary residence , right ?

It's a $10k limit on deductions so dependents, charitable contributions, mortgage interest, and probably some more stuff has to stay under that cap or it doesn't count. Since that change went in we've never been able to even match the standard deduction. It increased our tax bill by about 2% and my wife has still never forgiven Trump. I think we are directly in the middle of "squeeze the middle class" part of that ta…

My home is nowhere near $750k, not even half of that. But every tax filing solution I've used has capped me at $10k deductions ever since the change.

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

#85

Post by jrochkind1 »

cstoner wrote: post #74
RandallBrown wrote: post #59

Earlier quoted context omitted.

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 vast majority of people take the standard deduction, so offering a "here's what we think you owe, but if you disagree feel free to do the full return" form would be a huge efficiency gain. Your comment seems like a prime case of perfect being the enemy of good.

> The vast majority of people take the standard deduction

Unless they are a homeowner, probably.

Part of the issue is that the US tax code is a lot more complex than most countries. (And the homeowner-targetted deductions are kind of insane and bad policy too).

Still, I don't disagree with the basic premise. They probably know enough to know if itemizing your homeowner-related things would be better for you, and do it that way. You can ask for adjustments, or you could always ignore what they calculate for you and do it all yourself from scratch if you wanted to, a thing I believe you _can_ do in European countries that generally calculate your income taxes for you?

Also, I wish our tax code werent' so insane.

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

#86

Post by bombcar »

ww520 wrote: post #47
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…

This year TurboTax apparently made a mistake. The tax calculation showed I owed tax and I submitted payment for the reported amount. IRS sent me back a check later for overpayment based on the reported tax filling by TurboTax. They didn't explain where the error was; it's just that TurboTax made a bad calculation somewhere.

Request a tax transcript and compare: https://www.irs.gov/individuals/get-transcript

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

#87

Post by gowld »

ShadowBanThis01 wrote: post #12
lelandfe wrote: post #8

Earlier quoted context omitted.

Never happened. Thanks Propublica! https://www.propublica.org/article/irs-reforms-free-file-pro...

Indeed. This is why a free press exists. Too bad fewer and fewer people appreciate it.

It doesn't need your appreciation so much as your donation. But you could donate appreciated stocks.

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

#88

Post by kristopolous »

jandrese wrote: post #40
kristopolous wrote: post #25

Earlier quoted context omitted.

I go with them too. Everytime this comes up though I post this https://apps.irs.gov/app/freeFile/browse-all-offers/ There's many nice and cheap options out there. Please, if you value basic democracy, don't give money to Intuit or TurboTax - not a dollar, not a penny. But do click on their paid ads whenever you see them and just close out after the page load. That company needs to be dismantled brick by brick, byte b…

One of the things to watch out for is so many free options that are only usable if you taxes are already trivial. Strangely enough that IRS search tool claims there are 0 options for me, even though FreeTax works just fine.

Ignore the "free" claim. Instead compare the normal price. Turbotax normal price if you're making north of 200k is what? like $150? They're going to do a deceitful hustle to try to get you to pay it like some seedy online scammer.

The other players in the industry price their competing products at $15-$20. They're upfront and there's no hidden costs.

Intuit is an extreme outlier and charges an outlandish premium to fund their dishonest lobbying efforts, lawsuit settlements for their countless crimes, invasive advertising and opulent demands of their shamelessly corrupt C-suite.

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

#89

Post by linuxftw »

Finnucane wrote: post #69
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.

No, but I would be forced to pay for the system whether I use it or not. I prefer not to pay for the system.

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

#90

Post by gowld »

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…

Can it import and parse documents from banks / investments? That's the most important part.
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