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

271–280 of 589 posts

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

#271

Post by attractivechaos »

_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 my experience, if I underpay my tax, they will come at me and demand penalty and interest. If I overpay my tax, they will do nothing. This is by design, I think.

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

#272

Post by convolvatron »

bluGill wrote: post #131
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.

The tax industry goes out of their way to make it seem harder than it is to justify their existence. You can do the forms by hand (not even a calculator) faster than most tax software - most of that time is added delays to make it seem like the computer has to work hard to do something hard. Unfortunately if you do things by hand you will eventually make a trivial mistake and the IRS will get mad about that.

they really don't get too mad. I do it by hand, sometimes using a calculator, and they just send you a correction. mostly its been in my favor. California taxes are based off of federal, so CA used to get kind of pissy because eventually they would find out about the correction somehow. last year they send me a notice within a couple days of the IRS

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

#273

Post by alistairSH »

lazide wrote: post #231
alistairSH wrote: post #216

Earlier quoted context omitted.

Those deductions and credits (mostly) apply to people itemizing their deductions. About 30% of households itemize - the remaining 70% take the standard deduction. [EDIT - since the tax changes in 2018, the numbers are closer to 10% itemize/90% standard deduction] And most of the common items are known to the IRS... mortgage and mortgage interest, property taxes, state taxes, education credits, retirement savings. Com…

Most of the economy (as in cash flow) is through businesses, and what you’re saying doesn’t apply to them.

So...? There are 131,000,000 households in the US. Something like 40% of people surveyed use tax prep software (at $50+/year). That's a massive waste of money that society could use on something useful.

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

#274

Post by jrockway »

peoplenotbots wrote: post #145
kevin_thibedeau wrote: post #135

Earlier quoted context omitted.

> There is no reason for a w2 wage earner taking the standard deduction to need to file taxes. Unreported gambling winnings or a low revenue side gig aren't tracked by the IRS.

Are Genshin Impact microtransactions a tax write off?

There are carefully crafted rules to make things like in-game winnings and frequent flyer mile accruals non-taxable. I think the key rule is that you can't convert the in-game currency to real cash; this is why airlines close your frequent flyer account if you sell miles or offer to give other people your awards for money. They probably don't care, but the IRS does.

How this all changed with cryptocurrency, I don't know.

I think taxes are all about what's written down and what logically makes sense. If you pay someone $1000 to do a job, they have to pay taxes on that. If you invite your friends over and spend $1000 on food that they eat, they don't have to pay taxes on that. I don't know why.

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

#275

Post by technothrasher »

thelittleone wrote: post #155
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

You could establish a corporation in a UAE freezone with visa and not even need to keep books. Of course assuming your laws allow it.

US law doesn’t allow it, or at least it doesn’t allow you not to declare and pay US tax on any income you make no matter where you make it.

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

#276

Post by creato »

attractivechaos wrote: post #271
_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…

In my experience, if I underpay my tax, they will come at me and demand penalty and interest. If I overpay my tax, they will do nothing. This is by design, I think.

I’ve overpaid my tax, they told me about it and IIRC I just got one letter with a check in it, I didn’t need to do anything.

I’ve also underpaid and my experience was basically the same (except I had to send a check instead obviously). Edit: and the “penalty” was just modest interest on the underpayment.

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

#277

Post by BugsJustFindMe »

andrewla wrote: post #237

The steelman case for opposing "auto-filing" or having the IRS provide tax preparation is that the intention of requiring everyone to file is that all citizens should be directly aware of the amount of taxes being assessed and the complexity of the tax code itself, with the objective of making people oppose legislative increases in the complexity of the tax code, and to make tax increases more intrusive so that legis…

> The steelman case for opposing "auto-filing" or having the IRS provide tax preparation is that the intention of requiring everyone to file is that all citizens should be directly aware of the amount of taxes being assessed and the complexity of the tax code itself

That's a very weak case when they could just send me a letter telling me how much they took and why, which would accomplish the same thing but better and without saddling me with a bunch of unnecessary labor and/or expense.

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

#278

Post by TheCondor »

godelski wrote: post #257
TheCondor wrote: post #245

Earlier quoted context omitted.

I'll do you one better, maybe two better... Why can my bank and credit card vendors tell me "up to the second" the status of my account. I use a credit card and get an alert on my Apple Watch. The IRS could have an app that shows it in real time (say up to the day) how much tax you've paid and if they think you'll owe more or get a refund based upon what they know at that point and time and what they know from last y…

Maybe this comment can spur several startup ideas. Why is it that we can have highly advanced AI, phones, and monitoring systems but so much of what we do is as if we're living before the internet? Obviously politics (not just a left/right divide, but even at local and budget levels) plays a role. But let's be real, street lights (and cross walk) should be algorithmic and sensor driven, stores should have trivially d…

That's my wish. I'd think the 70% or whatever the number is that takes the standard deduction could be satisfied with a fairly simple app. Businesses, certain business principals, individuals with higher incomes have more complicated taxes but I would think there could be some standard patterns. I also think that most families not in that 70% (or whatever the number is) probably have fairly similar taxes 3 out of 5 years or 4 out of 5 years. If not, maybe there are some loop holes we should look at or some alterations to the tax code to allow for this. Quick books and peach tree and do an awful lot for a lot of businesses, I know it can be done...

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

#279

Post by TimTheTinker »

deathanatos wrote: post #269
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 also switched to FreeTaxUSA this year. Same as in your case, TurboTax got the bigger refund (I was able to figure out why, in my case) … but the extra refund was completely eaten away by the higher cost. I.e., I ended up with more money with FreeTaxUSA, even though the initial return was of poorer quality. (We caught the error and it was corrected anyways … so … yeah.) There was a state tax error, I think, in Turbo…

There are some cases TurboTax can handle that FreeTaxUSA can't, if I'm not mistaken -- AMT due to early ISO exercise being one of them.

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

#280

Post by dabluecaboose »

lazide wrote: post #236
jsty wrote: post #172

Earlier quoted context omitted.

> Of course assuming your laws allow it. The spherical cow of the accounting world

Also a bit of a Heisenbergs cat! A lot of things are ‘legal’ as long as you don’t get audited.

Did you mean "Schrödinger's cat"?
Post reply on HN