Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

washingtonpost.com

Post reply on HN
Print view View original

201–210 of 589 posts

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

#201

Post by ethbr0 »

nostromo wrote: post #157
vkou wrote: post #142

Earlier quoted context omitted.

The only thing worse than a public monopoly is where you have to navigate both a public monopoly, and a private monopoly, which is how taxes work in the US.

There is no monopoly on tax preparation in the US. It’s a highly competitive market. Dozens of companies sell online products to file, and thousands of individual providers are available too.

There's a monopoly to a first-order approximation.

Apparently TurboTax has ~70% market share for tax preparation software, and TurboTax + H&R Block have ~95% market share. [0]

But even that's still a heck of a lot more competitive and responsive than if the IRS shipped the only tax prep solution.

[0] https://secondmeasure.com/datapoints/tax-prep-2021-turbotax-...

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

#202

Post by thechao »

gowld wrote: post #90
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.

Does this work for you? TurboTax has a 100% chance of either: (1) not working; or, (2) completely hosing my filing.

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

#203

Post by namdnay »

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

What type of contractor? Micro-entreprise is really simple for side gigs, and if it's your main job, declaring as an SAS and getting an accountant makes it (relatively) painless in my experience

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

#204

Post by aksss »

jcfariadias wrote: post #50
RektBoy wrote: post #29

Wait what? Here in EU I've been filling out taxes for years electronically. Form and automatic guide is provided by our country. Btw should I mention this is mandatory only for self-employed. If you're an employee, it's required by law that your employer must provided you a free service of filling the taxes and everything for you.

In Portugal, every transaction should, by law, be sent to the tax authority. Every employer should also report what paid to their employees and also retain in source part of the income Everything is then setup centraly by tax authority which enables the process of submiting tax reports being automatic for most or either, if you have a more complex tax situation, taking you a couple hours tops to self-fill and submit.…

> every transaction should, by law, be [reported to the gov.]

Conceptually, and in principle, this freaks a lot of Americans out. But the burden of not doing it is exceeding the alternative, I think. While it may be progressive to automate tax filing, having the government know everything about your financial transactions without proper cause is not considered very progressive (I guess it depends on what you are trying to progress towards).

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

#205

Post by maerF0x0 »

nostromo wrote: post #157
vkou wrote: post #142

Earlier quoted context omitted.

The only thing worse than a public monopoly is where you have to navigate both a public monopoly, and a private monopoly, which is how taxes work in the US.

There is no monopoly on tax preparation in the US. It’s a highly competitive market. Dozens of companies sell online products to file, and thousands of individual providers are available too.

> It’s a highly competitive market.

It's a competitive market on a stupid game. The market solutions (maybe mostly just intuit) fight to keep the game near impossible for the lay person to play. They generate "GDP" by making it more grievous than it need be.

At least part of this is a symptom of a broken political system (the current process of voting encourages 2 party system which are incentivized to not experiment)

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

#206

Post by NoblePublius »

We’ve completely lost the plot if we’re arguing about whether the government or private companies should maintain a system for filing taxes when ~80% of filers could be sent a bill or refund automatically based on info the IRS already has.

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

#207

Post by ethbr0 »

ericmay wrote: post #127
ethbr0 wrote: post #117

Earlier quoted context omitted.

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 ta…

The difference is that if the IRS provided the only filing solution AND adjudicated taxes, there'd be no adversarial tension.

Right now, the IRS is forced to establish some sort of data interchange format and adjudicate incoming tax filings equally, because they're required to work with TurboTax et al. (even if only required from a practical standpoint).

If they also provided the only filing solution, that pressure would be gone.

IMHO, the best possible outcome is definitely IRS-supplied free file + private options, if users would like. Keeps everyone honest and on their toes.

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

#208

Post by alistairSH »

AnIdiotOnTheNet wrote: post #199
shortcake27 wrote: post #184

Earlier quoted context omitted.

Yeah the American system absurd. “We have all the data but you still need to figure it out yourself and if you get it wrong you’ll get in trouble”. The Australian system has improved a lot over the past few years - PAYG (employment), bank interest, and dividends are all pre-filled on your tax return. So all you need to figure out is deductions and other income. I’d still like to see it taken a step further like in th…

> Yeah the American system absurd. The hilarious thing is that if we remove the context from this statement it applies so broadly that you could mean just about of our systems. Having absurd systems is pretty much our defining characteristic.

Americans Will Always Do the Right Thing — After Exhausting All the Alternatives

-- Winston Churchill (probably not[1])

1 - more likely a generic version of this was posited by Israeli diplomat Abba Eban in the 1960s and mis-attributed to Churchill sometime in the 1980s

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

#209

Post by causi »

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.

I've done it with multiple free services a couple of years and I generally got more back with H&R Block's free page, so I use them now.

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

#210

Post by lr1970 »

shortcake27 wrote: post #184
_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…

Yeah the American system absurd. “We have all the data but you still need to figure it out yourself and if you get it wrong you’ll get in trouble”. The Australian system has improved a lot over the past few years - PAYG (employment), bank interest, and dividends are all pre-filled on your tax return. So all you need to figure out is deductions and other income. I’d still like to see it taken a step further like in th…

> Yeah the American system absurd. “We have all the data but you still need to figure it out yourself and if you get it wrong you’ll get in trouble”.

IRS knows all the income data only in simple cases like salaried employees with W-2 forms. If you are business owner or contractor the things can be more complicated and what IRS really knows is a guessing game. IRS is posturing and bluffing that they know everything and put pressure on a tax-payer to voluntary disclose as much as possible about their income out of fear of criminal persecution. Also they will rarely tell you that you "overpaid" your taxes unless it is a simple math mistake.

Post reply on HN