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

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

#111

Post by whimsicalism »

mountainofdeath wrote: post #41
AlexandrB wrote: post #26

Earlier quoted context omitted.

American legislators seem to loooove "means testing" every government-provided service. Maybe it's a misguided version of that?

It's probably more-so that above a certain income threshold, your tax return becomes exponentially more complex. Free-file is useful when all you have is 1-2 above-board wage earning jobs, maybe with a 1099 contract job where the employer is nice nice enough to pre-fill the form out for you. Once you start dealing with non-trivial amounts of dividends, interest, securities, partnerships, real-estate, you really do ne…

I make a lot more than that, but as long as I remain a simple W2 earner it is still ridiculously easy to file taxes and I shouldn't be charged extra for it.

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

#112

Post by tivert »

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, 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.

And the comments advocating for automatic tax filing seem to be ignoring Chesterton's fence. They seem to be viewing it solely through the lens of revenue collection. However, IIRC, for better or worse, one of the big levers the US government uses to influence individual behavior is incentives implemented via tax policy. It stands to reason that mechanism would stop working if individuals could avoid interacting with the tax rules.

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

#113

Post by ilyt »

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.

Here in Poland the tax form is pretty much "here is what we know, re-type that into the form and add whatever is missing for deducations".

Which you can use free app to download, file and send the filed one.

weirdly enough official site also have instruction on how to use PlayOnLinux to run it under Linux

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

#114

Post by all2 »

whimsicalism wrote: post #103
_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…

My partner and I are both W2 earners and filing our taxes takes like under half an hour. Are we doing something wrong? It seriously does not seem hard to file taxes.

Do you have investments or businesses of any type? Do you itemize your deductions?

My biggest time sink this year was sorting out how to file crypto gains/losses. After two hours of struggle, I found that I had to pay income tax on about 15 dollars of capital gains.

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

#115

Post by whimsicalism »

runako wrote: post #60
mountainofdeath wrote: post #41

Earlier quoted context omitted.

It's probably more-so that above a certain income threshold, your tax return becomes exponentially more complex. Free-file is useful when all you have is 1-2 above-board wage earning jobs, maybe with a 1099 contract job where the employer is nice nice enough to pre-fill the form out for you. Once you start dealing with non-trivial amounts of dividends, interest, securities, partnerships, real-estate, you really do ne…

> above a certain income threshold, your tax return becomes exponentially more complex For some people. A person working a single job as a programmer earning $300k in straight W-2 income (no RSUs, etc.) does not have more complex taxes than a person earning $100k from a combination of their podcast + a few rental properties. There's no logic to means-testing this kind of service, where there would be for feature-test…

RSUs don't really complicate anything, they are straight W-2 income.

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

#116

Post by LostLocalMan »

whimsicalism wrote: post #103
_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…

My partner and I are both W2 earners and filing our taxes takes like under half an hour. Are we doing something wrong? It seriously does not seem hard to file taxes.

It's not hard if you have simple incomes and deduction, it's just a bloated process that you have to pay to complete (if you make enough money) and you are at risk of penalty if you accidentally fat finger manually copying printed text into a computer since the IRS already knows all the values and will know if you submitted something wrong.

What would be better is if the IRS just sent you the stuff they know and you affirm that it's true. This prevents people from accidentally committing tax fraud and eliminates the need for middle income Americans to pay a yearly fee in order to be law abiding.

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

#117

Post by ethbr0 »

d--b wrote: post #98
RajT88 wrote: post #70

Earlier quoted context omitted.

In fact, other sane industrialized nations have really got it figured out: https://www.pbs.org/newshour/show/dreading-taxes-countries-s...

Not all though. I developed admin-phobia since I moved back to France. Being a contractor here is such a FUCKING nightmare compared to UK and US. Sure the US could do without turbotax. BUT AT LEAST YOU GUYS HAVE TURBOTAX

The only thing worse than a private monopoly is a public one.

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

#118

Post by whimsicalism »

all2 wrote: post #114
whimsicalism wrote: post #103

Earlier quoted context omitted.

My partner and I are both W2 earners and filing our taxes takes like under half an hour. Are we doing something wrong? It seriously does not seem hard to file taxes.

Do you have investments or businesses of any type? Do you itemize your deductions? My biggest time sink this year was sorting out how to file crypto gains/losses. After two hours of struggle, I found that I had to pay income tax on about 15 dollars of capital gains.

I just take the standard deduction.

Investments: Yes, I have to file a 1099. Business: no.

Crypto: I think your holdings have to be significant for it to matter whether you file this or not, maybe I broke a law here.

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

#119

Post by elicash »

runako wrote: post #66

"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 s…

It would save taxpayer dollars if we encourage folks filing by paper to do so electronically. Administratively, having the agency staff folks dealing with paper takes much longer.

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

#120

Post by aynyc »

dheera wrote: post #17
lapetitejort wrote: post #11

I paid ~$100 to file my taxes this year. At the end they said because I had one particular form that I couldn't file electronically, and I would have to send it in. So I had to print everything out, write checks, package everything up, visit the post office, and check that the letters arrived. I still had to pay full price of course.

Pro tip: If you have a tax bill over a few thousand dollars, sign up for some credit cards with big fat bonuses just to pay the taxes, and you can easily make up the $100. When the system of {government, financial institutions, credit cards, etc.} sucks, shove it back to the system. Obviously, calculate whether it really works out in your favor with the credit card payment fees, but in many cases it will.

This is what we called premature optimization. If you owe big money on taxes, spend your energy and effort to figure out how to reduce that, not on credit card points.
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