13 States join the IRS direct-file test after tax prep firms dropped the ball • Hacker News Board

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#121

Post by hedora » Thu, Oct 19, 2023, 3:30 PM UTC

bigstrat2003 wrote: post #104

ghaff wrote: post #74

Earlier 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…

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.

Did you go to college?

I had a job on campus and a stipend, and that immediately tossed me into the deep end of “the tax code is actually ambiguous and the difference is three months rent”.

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#122

Post by magicalhippo » Thu, Oct 19, 2023, 3:31 PM UTC

pclmulqdq wrote: post #93

sakjur wrote: post #11

Earlier quoted context omitted.

In Sweden, certain things are reported to the government and others are not. Your task is to validate the prefilled tax forms and add missing income (above thresholds in place to allow for hobbyist level incomes) and deduct missing deductibles. The typical process is to just approve it, but when you’re for example selling real estate you’ll have to append it with information about your capital gains minus deductible…

So does that mean that literally everyone who sends in tax information other than accepting the government's calculations is a huge audit target?

Nah, they do some risk analysis etc.

Me and my SO has had to change ours for many, many years because the banks can only report interest paid on our loan on one of us. So one has to reduce the other has to add this entry. Every year. Never had an audit nor heard anyone else who's had it.

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#123

Post by kristopolous » Thu, Oct 19, 2023, 3:35 PM UTC

gumby wrote: post #69

I love the quote from the Intuit VP, which complained that it would end up “costing billions of dollars in taxpayer money.” The current system costs billions of dollars in taxpayer money, it’s just that today those dollars flow to Intuit. The IRS one should end up costing less overall, even at govt contracting rates.

Why is that person's comments even included? It'd be like reaching out to Charles Ponzi for a quote on business regulation

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#124

Post by gumby » Thu, Oct 19, 2023, 3:36 PM UTC

toomuchtodo wrote: post #76

gumby wrote: post #69

I love the quote from the Intuit VP, which complained that it would end up “costing billions of dollars in taxpayer money.” The current system costs billions of dollars in taxpayer money, it’s just that today those dollars flow to Intuit. The IRS one should end up costing less overall, even at govt contracting rates.

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” ― Upton Sinclair

In this case I’m pretty sure it’s simply his job to say such things and who knows what he actually believes.

But sure, it’s likely that he would vote against a candidate who supported the IRS’s program.

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#125

Post by justinzollars » Thu, Oct 19, 2023, 3:38 PM UTC

comte7092 wrote: post #116

gumby wrote: post #69

I love the quote from the Intuit VP, which complained that it would end up “costing billions of dollars in taxpayer money.” The current system costs billions of dollars in taxpayer money, it’s just that today those dollars flow to Intuit. The IRS one should end up costing less overall, even at govt contracting rates.

That’s just the classic anti public sector service line in general. Whatever your feelings are about single payer healthcare, it’s incredibly disingenuous when politicians debate against it by bringing up the cost of such a system, without comparing it to the current cost of the private system it would replace.

Government size as a proportion of GDP is at 42.36% [1]. How much bigger should it get?

1. https://www.imf.org/external/datamapper/exp@FPP/USA/FRA/JPN/...

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#126

Post by hedora » Thu, Oct 19, 2023, 3:41 PM UTC

amerkhalid wrote: post #86

ghaff wrote: post #74

Earlier 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…

There are two limits on that deduction that are relevant. They can’t be applied to foreign built cars, and there is an income cap.

The Koreans (Kia, Hyundai) found a loophole: The restrictions do not apply to commercial fleets, including vehicles leased to consumers.

So, they offer lease incentives that are structured to give you $7500 off MSRP if you buy the vehicle out of a lease after the first month.

No IRS paperwork required, and no chances of finding some other gotcha when you file your taxes.

If the law hasn’t changed by the time I buy a new EV, I’m going to insist on this, regardless of whether it is domestic made.

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#127

Post by sokoloff » Thu, Oct 19, 2023, 3:42 PM UTC

flandish wrote: post #118

sokoloff wrote: post #106

Earlier quoted context omitted.

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.

Some of us pay state taxes too…

Of course. The upthread comment about EVs was presumably in regards to the federal EV tax credit and how to handle the data flow needed to support it in an automated return generation process.

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#128

Post by INTPenis » Thu, Oct 19, 2023, 3:43 PM UTC

This federal government thing is really confusing to me as a european.

Like the federal government can come to California and shutdown a cannabis dispensary, but they can't make you use an easier way to file your taxes.

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#129

Post by pclmulqdq » Thu, Oct 19, 2023, 3:45 PM UTC

hedora wrote: post #112

pclmulqdq wrote: post #91

Earlier 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…

I used to do it with just the 1040 and a spreadsheet. The problem with that is that there are literally 100 crazy-assed questions that I have to answer in order to fill out all the supplementary worksheets, etc. For instance: I bought a used EV. Do I take the tax break? Is it a deduction or credit? Figuring that out will take at least 10 minutes after you find the right IRS bulletin. Also, we have a roboadvisor, whic…

I would suggest that you are almost certainly in the top 5% on complexity of your tax situation between the roboadvisor, the house, and the EV, if not all of the other things that you are spending 8 hours on. You may be in the top 1% on number of pages in your federal tax return.

Personally, I would love a flat tax, although I would probably pay more under that system. It will never happen, though.

Re: 13 States join the IRS direct-file test after tax prep firms dropped the ball

#130

Post by kjkjadksj » Thu, Oct 19, 2023, 3:52 PM UTC

gumby wrote: post #120

comte7092 wrote: post #116

Earlier quoted context omitted.

That’s just the classic anti public sector service line in general. Whatever your feelings are about single payer healthcare, it’s incredibly disingenuous when politicians debate against it by bringing up the cost of such a system, without comparing it to the current cost of the private system it would replace.

A key factor is that insurance companies are a big sector, and are in everybody’s pension funds. This is one of the reason that the oil companies get subsidies (“green hydrogen” which makes no scientific sense) in the anti-climate-change legislation. Intuit and HR Block are too small to present that level of opposition.

The gain per person from having non profit single payer would probably still be higher than having that sector nuked from your portfolio unless you owned like millions in shares. And if you did own millions of shares, you’d probably be privy enough to see the writing on the wall and buy into a tech company instead with that money ahead of the collapse and public takeover.