The TurboTax CEO called this direct file test, "a solution and search of a problem."
That is pretty ironic because TurboTax is working to prolong the problem in order to profit from their own solution.
13 States join the IRS direct-file test after tax prep firms dropped the ball
101–110 of 196 posts
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#102We have in France pre-filled taxes, you go to the tax site, click next a few times and you are done. Takes 30 seconds for 90% of the population. Usually people do not even check what they click if they have a standard job. Is the system in the US much more complicated to require software purchases? I get it that it is not prefilled, but is there a lot to actually input in the system?
> Is the system in the US much more complicated to require software purchases? It's intensely more complicated. My 2022 Federal tax filing was over 50 pages. I gave up trying to do it myself with TurboTax about 10 years ago and that was one of the best decisions I have ever made. I can sleep well at night knowing that as long as I provided the necessary information to my accountant, all the right forms will have all…
I'm pretty sure your tax forms in France would also be 50 pages, and you would have to submit a detailed correction of the government forms if you wanted to actually minimize your tax burden. That has more to do with the complexity of your income and assets than anything else. My tax forms in 2021 were about 300 pages if you combine everything (including 1099s, W-2s, and other reporting forms), but that has to do entirely with stock trades, real estate, and small business profits, all of which would be a pain in any tax system. The simplest taxes in the US are 2 pages of forms (the 1040) plus a few W-2s.
The average American can easily fill out their tax papers by hand. TurboTax just sells the dream of finding "hidden" deductions and credits, which basically don't apply to 99% of people.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#103Earlier quoted context omitted.
> What does the average American think about this? That all depends on the government's execution. If they can deliver a system that is more convenient to use, cheaper (no, government services are not "free") and provides better results, then I'm all for it.
I'm pretty sure in this case it could be actually free since the government already collects and verifies all the required information.
Free at point of use, but cannot possibly be free overall.
If it would be free overall, it would take no time to develop or support and would already be rolled out.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#104Earlier quoted context omitted.
Taxes weren’t particularly difficult if like most people you were overpaying before this software showed up. The complexity was originally a way to effectively have different rules for people with accountants than regular citizens thus allowing politicians to shift the tax burden without making the carveouts obvious. Now days we just blatantly tax people living off investments less, etc. Thus defeating the original p…
And the reality today is that, if like a lot of people, you just have a W2 and maybe a 1099 or two, while the 1040 form is probably a bit intimidating, it's pretty straightforward if you're just taking the standard deduction as most people do since Trump era tax changes. Basically, if you're eligible for any of these direct-file arrangements, your taxes are pretty easy to file anyway. I'm all for simplifying tax fili…
Hard agree with this. Filling out your taxes by hand is actually very easy if all you have is the basics (which is most people). When I was doing my taxes for the first couple of years as an adult, I did it by hand and was pleasantly surprised how easy it was. The instructions are very clear and to the point.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#105Earlier quoted context omitted.
And the reality today is that, if like a lot of people, you just have a W2 and maybe a 1099 or two, while the 1040 form is probably a bit intimidating, it's pretty straightforward if you're just taking the standard deduction as most people do since Trump era tax changes. Basically, if you're eligible for any of these direct-file arrangements, your taxes are pretty easy to file anyway. I'm all for simplifying tax fili…
I think a lot of people who complain about the complexity of the US tax code and the "need" for TurboTax would benefit from directly filling out the 1040 by hand one year - most of them would have a pretty easy time doing it. For most people, all you need is a 4-function calculator, your W-2s/1099s, and a pencil, and it will take at most an hour or so. Where the IRS's UX is really bad for the average taxpayer is all…
>and it will take at most an hour or so.
And that's absolutely insane. That's tens of millions of man hours per year spent essentially on rote data entry of data that the IRS already has so that you can submit it to the IRS for them to check against their copy.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#106Earlier quoted context omitted.
> Buy an EV? It’s in a db I don't expect car purchases to be in a federal database (or the schools my children attend, for that matter).
then you're gonna really hate to learn about vehicle registration
Vehicle registration is done by state agencies.
I would not expect that all the data in 50 states' (plus additional territories') databases end up reflected into a federal database today.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#107Earlier quoted context omitted.
And the reality today is that, if like a lot of people, you just have a W2 and maybe a 1099 or two, while the 1040 form is probably a bit intimidating, it's pretty straightforward if you're just taking the standard deduction as most people do since Trump era tax changes. Basically, if you're eligible for any of these direct-file arrangements, your taxes are pretty easy to file anyway. I'm all for simplifying tax fili…
I think they should get rid of all deductions at the individual levels. They just cause confusion and hide true cost of things. For example, I went to buy Jeep. 4xe version was $8000 more. But its battery lasts only 2-3 miles and it would have taken forever to breakeven. But dealership kept insisting that I will get $6000 in tax rebate/deductions so the actual cost is only $2000 more. They had marked up the car by ho…
>They just cause confusion and hide true cost of things.
Hiding the true cost is the point. Or rather, altering the true cost to incentivize something or other.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#108Non-USian here. How does federal income tax work for people with a normal, regular job? If someone just works full time in a shop or on a factory line, do they get yearly tax demand that they have to check and/or calculate themself?
It's a "push" system rather than "pull" that you're thinking of -- the government (in theory) has no idea what someone earned, although they do know how much tax they've already paid during the year, they pretend that they don't. So the employee's task is to present a record to the government (known as "Filing Taxes") that says: I earned this much, and I already paid this much tax, so you owe me this much back (while…
> the government (in theory) has no idea what someone earned
The government gets a copy of your W-2 and 1099s.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#109Earlier quoted context omitted.
And the reality today is that, if like a lot of people, you just have a W2 and maybe a 1099 or two, while the 1040 form is probably a bit intimidating, it's pretty straightforward if you're just taking the standard deduction as most people do since Trump era tax changes. Basically, if you're eligible for any of these direct-file arrangements, your taxes are pretty easy to file anyway. I'm all for simplifying tax fili…
I think a lot of people who complain about the complexity of the US tax code and the "need" for TurboTax would benefit from directly filling out the 1040 by hand one year - most of them would have a pretty easy time doing it. For most people, all you need is a 4-function calculator, your W-2s/1099s, and a pencil, and it will take at most an hour or so. Where the IRS's UX is really bad for the average taxpayer is all…
Frankly, this whole thread is evidence of that. There's been a meme since before Intuit existed that tax prep in the US is akin to performing brain surgery on yourself. I do have enough oddball schedules these days that having an accountant is almost certainly a good idea but, honestly, I piggybacked on my parents' accountant for many years when I probably didn't really have a good reason to.
A lot of people have just convinced themselves that getting a Turbotax update or going to the H&R Block booth at Walmart is just one of those annual rituals you have to do if you're sensible.
Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball
#110Earlier quoted context omitted.
I think a lot of people who complain about the complexity of the US tax code and the "need" for TurboTax would benefit from directly filling out the 1040 by hand one year - most of them would have a pretty easy time doing it. For most people, all you need is a 4-function calculator, your W-2s/1099s, and a pencil, and it will take at most an hour or so. Where the IRS's UX is really bad for the average taxpayer is all…
>and it will take at most an hour or so. And that's absolutely insane. That's tens of millions of man hours per year spent essentially on rote data entry of data that the IRS already has so that you can submit it to the IRS for them to check against their copy.
I would like to think that even if the IRS were to send me some numbers, I'd still spend an hour or so checking them against my own information.