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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

#121

Post by whimsicalism »

binarymax wrote: post #110
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.

No you’re doing everything right! The point is that you shouldn’t even need to do anything. The IRS already has your information. Unless youre changing something that they won’t know about (for example not using the standard deduction), then ideally you would get an automated return and possible refund without taking any action.

The point is that I might report something that they aren't aware of. It makes sense to me, the IRS does not know everything and strategically witholding what you know will lead people to report things that you don't know about.

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

#122

Post by bluGill »

jrochkind1 wrote: post #85
cstoner wrote: post #74

Earlier quoted context omitted.

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 i…

Since Trump's tax changes very few people itemize - it is very difficult to get about the standard deduction. The average person doesn't even have enough income (the standard deduction is about a third the average income, the odds that someone at that wage level is spending enough on deductible things is small, there are too many non-deductable things they also need to buy).

Of course it depends on where you live - in San Francisco if you can afford a house at all you have enough interest to deduct it (especially at today's rates), but other areas have more sane housing prices and lower incomes.

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

#123

Post by whimsicalism »

LostLocalMan wrote: post #116
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.

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…

> eliminates the need for middle income Americans to pay a yearly fee in order to be law abiding.

Yearly fee? I had to pay for turbotax but I was under the impression that it was because my income is very high.

I don't know, it makes sense to me the way the IRS does it. If I get a massive windfall and the IRS didn't send me information about it, then I would be able to just not file it because I would know they don't know about it. Not so if I don't know what they know.

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

#124

Post by firesteelrain »

jrochkind1 wrote: post #85
cstoner wrote: post #74

Earlier quoted context omitted.

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 i…

IRS can easily setup a template:

"Here is what we think you owe/don't owe. If this isn't what you expect, then click this button to add or subtract deductions. Oh and BTW, we know you owned a home last year so we included that too!" Or, "Hey we noticed you took the standard deduction last year so we assumed based on what info we have that this year might be the same so here is the standard answer!"

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

#125

Post by elicash »

linuxftw wrote: post #89
Finnucane wrote: post #69

Earlier quoted context omitted.

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.

Would you prefer to pay even more for somebody filing by paper?

That's our current system. You can pay nothing to file, but it means that the government then has to spend a ton of resources on managing pieces of paper. I'd prefer for staff time to be spent going after fraud than trying to read bad handwriting.

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

#126

Post by firesteelrain »

LostLocalMan wrote: post #116
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.

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…

I used CashApp Taxes for three years now (was Credit Karma). It's free and has the same thing as TurboTax.

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

#127

Post by ericmay »

ethbr0 wrote: post #117
d--b wrote: post #98

Earlier quoted context omitted.

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.

In the case of taxes in the United States this doesn’t really follow because if the government says you owe $x.xx then you have to go through the bureaucracy either way to either pay or dispute the charge. For most people (simple wage earner) TurboTax and other software is just an additional regulatory tax and no different than the government except that it takes money from citizens.

A government has a monopoly on taxation by definition or else it can’t be a government so calling it a public monopoly doesn’t make a lot of sense.

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

#128

Post by elicash »

colmmacc wrote: post #4
edgyquant wrote: post #2

Hopefully it does. The tax system here is ridiculous to say the least.

I lived in four countries before moving to the USA and none of them required me to file at all. As an ordinary employee, taxes were PAYE (Pay as you Earn) and there was no complicated system of tax exemptions that aren't either handled directly at source, or as separate rebates (like child allowance payments). I long for that day in the USA.

Does that work when the percent you're supposed to pay depends on income bracket? (Genuine question!)

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

#129

Post by SoftTalker »

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 isn't hard in the simple case. When you have kids and HSAs and education expenses and self-employment income and more complicated investments it gets more complicated.

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

#130

Post by booleandilemma »

bluSCALE4 wrote: post #42

The only thing that sucks is that HR Blocks and they’re equivalent fill what otherwise would be a vacant or slot machine spots in many neighborhoods. Either way, good riddance.

In NYC at least I expect we'll see yet more smoke shops open in their place.
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