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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

#381

Post by BugsJustFindMe »

interroboink wrote: post #348
BugsJustFindMe wrote: post #330

Earlier quoted context omitted.

> The theory makes sense Regardless of how one feels about arguments against taxation, that theory for how to achieve it does not make sense. It is belligerent sleight of hand from people who want to preserve the status quo of a sheltered income funnel for the tax preparation economy at the extremely inefficient labor expense of everyone else. Here's the problem... You're literally creating something entirely unrelat…

It seems your line of reasoning is predicated on the idea that people are rational about these things. I think that can be quite mixed, in reality. A counterpoint might be: if you earnestly and honestly want to change people's behavior via whatever means necessary, then non-logical correlation/causation associations, appeals to emotion, and other smokescreens as you mention are effective tools and may get you there f…

The old "trick people into doing what you want, not what they want, by repeatedly lying to their faces" model of governance.

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

#382

Post by semi »

frumper wrote: post #333
alistairSH wrote: post #254

Earlier quoted context omitted.

I'm afraid that if you get a stock grant from your employer, that puts you beyond where the IRS can send you a pre-filled form that is correct. Sure, but that's a tiny fraction of the population. Nobody is saying the IRS should send you a fixed return. Only that they should send what they have, and if nothing needs changed, great, society is better off.

Lots of deductions and credits are on top of the standard deduction. School expenses, child credits, child care expenses, retirement savings, EIC credits and student loan interest are some very common things.

Imagine if all you had to do at tax time was enumerate those deductions, instead of that and the rest of doing your taxes

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

#383

Post by az226 »

sgerenser wrote: post #291
az226 wrote: post #166

Earlier quoted context omitted.

Exactly. “We’ve submitted your tax return for you using the standard deduction. If you’d like to itemize your deduction, please send us Form 1050 Itemized Deduction worksheet.”

Itemized deductions are far from the only thing that the IRS doesn’t know about. Almost everything on Schedule C, and RSU and ESPP cost basis would also probably require manual intervention. Probably a bunch of other credits as well, like the tax credit for buying an EV, solar/energy efficiency, adoption, various student-related deductions/credits, etc.

You took me literally. Basically IRS can file taxes for all your details without adjustments. If you want to make adjustments, there should be an easy way to fill them in and be done with them. Donations, tax credits, etc.

Most brokers send all the info to the IRS, but there are some that get wrong cost basis for ESPP (Fidelity looking at you) and so you’ll have to rectify that too. But those things should spit out a number that gets adjusted from the IRS number.

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

#384

Post by _8j50 »

astrange wrote: post #357
_8j50 wrote: post #238

Earlier quoted context omitted.

> regurgitate tax information that has already been reported to the government How does the government know my non-compensated travel and moving cost, wfh expenses, cash charity donations,etc...? If people like you get the option to file directly with the IRS, fine by me so long as you don't make the rest of us pay more by losing the ability to play the game and save money.

> wfh expenses Was that ever deductible? You don't get the home office deductions unless you're self employed. > cash charity donations That basically isn't deductible for anyone anymore since nobody itemizes.

For both points, that's my point. You get your guy to figure that out for you. Knows tax laws and asks you questions to see what you can prove,etc...I've itemized when a return was guaranteed before to maximize it.

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

#385

Post by runako »

akira2501 wrote: post #327
runako wrote: post #281

Earlier quoted context omitted.

> If you've never used one of those services, you should Complex tax situations, likely will be using third-party advisors from here out regardless of what the IRS provides for wage earners.

That's honestly great for you and your family, but it also probably means your notions on the impediments to welcome uptake of free filing solutions for people outside of this class are out of touch with the actual problems experienced.

Personally, yes. But I was using the data from GAO from TFA:

> Though 70 percent of taxpayers qualify for those products, fewer than 3 percent of taxpayers use them, according to a Government Accountability Office report.

There's something other than "free" and generally blaming lobbyists that's preventing people from using these products. Without understanding that, it may not make sense to roll them out more broadly (although I do think that should be the goal).

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

#386

Post by interroboink »

BugsJustFindMe wrote: post #381
interroboink wrote: post #348

Earlier quoted context omitted.

It seems your line of reasoning is predicated on the idea that people are rational about these things. I think that can be quite mixed, in reality. A counterpoint might be: if you earnestly and honestly want to change people's behavior via whatever means necessary, then non-logical correlation/causation associations, appeals to emotion, and other smokescreens as you mention are effective tools and may get you there f…

The old "trick people into doing what you want, not what they want, by repeatedly lying to their faces" model of governance.

There's certainly that, but in truth, I didn't mean it that way. More like: "trick people into doing what's in their own best interests, because their hearts may not swayed by logic, even if their minds are."

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

#387

Post by davchana »

brocklobsta wrote: post #15

What I don't understand about these programs is the added income clause. In California the state provides a free tool to file state income taxes (CalFile), but you can't use it if you make over $230,000 a year. Does it really make sense? It's similar with the federal free file program I believe. You would think they would want to encourage high income citizens to use their tool so they can control the deductions/cred…

Plus also if you have any moving expenses (moving 50 miles away because of job, permanently).

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

#388

Post by pstuart »

refurb wrote: post #379
pstuart wrote: post #36

Earlier quoted context omitted.

Check out Grover Norquist and his goals -- this tax hell is intentional.

Disagree. You don't need Grover to make US taxes overly complex and burdensome. Just look at some of the tax bills Democrats have sponsored - vague tax rules that the IRS is responsible for implementing (and often making their own decisions on how to implement). Basically new tax rules are put into place with little regard on making them simple or including data collection as a part of the tax change.

The last time we were given "tax reform" it was mainly about cutting rates for the wealthy rather than streamline and modernize how taxes are handled (the IRS budget has been constrained and prevents them doing anything other than barely function, which is a not an accident).

https://www.policygenius.com/taxes/who-benefited-most-from-t...

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

#389

Post by pstuart »

koolba wrote: post #374
petsfed wrote: post #311

Earlier quoted context omitted.

I already feel it when I see the number every 2 weeks on my paycheck. Or when I'm advised of my property tax bill every 3 months. Or register a car. Or buy something at a physical store. Taxes are everywhere, and you have to work really hard to stay ignorant of how much they're taking out of your pocket. Literally all Norquist is doing is making it so for about 2 weeks a year, what little free time I have after the k…

> Speaking of toll booths vs electronic debit, when I lived in the Bay Area, I had to commute from east bay to west bay every day. For the first 4-5 months, I was paying cash, because in my scant spare time, I hadn't had time to get transponder and direct debit set up. I was paying $35/week. I didn't become less aware of that cost when I switched to the transponder, because the actual cost was time. Time is something…

> It’s because they explicitly do not want people to know what they are paying so they can raise the rates with minimal flak.

Or maybe it's simpler to just say paid and they did that. I'd wager that they're well aware of push-back over fee increases but still do it anyway, because monopoly. And the roads need the money.

On that note, the real fun is going to be about how do we pay for the roads once the majority of traffic is not pay fuel tax...

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

#390

Post by refurb »

RajT88 wrote: post #70
_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 fact, other sane industrialized nations have really got it figured out: https://www.pbs.org/newshour/show/dreading-taxes-countries-s...

I mean, kinda?

I worked in a country that automatically fills out your tax return. Sure, it was nice that the form was pre-populated, but you know what I did? I doubled checked all the numbers to make sure they were right.

Were they? No, my employer had miscalculated retirement contributions resulting in a higher tax bill for me.

So I ended up doing all the math anyways, just like I do in the US.

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