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

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

theverge.com

Post reply on HN
Print view View original

151–160 of 196 posts

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

#151

Post by FireBeyond »

TimPC wrote: post #141
hedora wrote: post #112

Earlier quoted context omitted.

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 think UBI and flat tax are fundamentally incompatible. Reasonable levels of UBI require high taxes, and doing so with entirely flat taxes will be quite punitive on the middle class. I think the vast majority of the population think there is a lot of merit to graduated tax rates as well, charging 50% tax on all of someone's income above $10,000,000 isn't as punitive to any sort of living standard as charging 50% tax…

In an in a very high income bracket, as I imagine many here are.

I’ve also lived in “more socialist” countries where I paid higher taxes before moving to the US.

I would have little to no problem passing higher taxes if there was any reasonable assurance that those taxes would go to worthwhile purposes (infrastructure, healthcare, education), and not to the military or pork. Sadly, in America, land of the middleman, we know how unlikely that is.

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

#152

Post by JohnFen »

permo-w wrote: post #146
wussboy wrote: post #119

Earlier quoted context omitted.

"Never invite just one baptist to go fishing with you or he'll drink all your beer." Related?

that's a question actually: during prohibition were Americans allowed wine for mass?

Yes, sacramental wine was legal. Not only that, but the production of sacramental wine is what kept some wineries from going out of business during prohibition.

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

#153

Post by JohnFen »

ghaff wrote: post #110
thfuran wrote: post #105

Earlier quoted context omitted.

>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.

I know that I wouldn't, because I don't want to. I'd just pay the amount the IRS says I should pay and call it good. I'd probably be paying more tax than absolutely necessary, but I honestly wouldn't mind that at all -- especially because I'd be saving money over doing the taxes myself (in the sense of time == money) or paying someone else to do them for me.

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

#154

Post by dmoy »

recursive wrote: post #134
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'm one of the people you're talking about. I tried it and it had the opposite effect. I tried to do it with the plain forms once about 15 years ago. Somehow I ended up reporting the same input twice or something? I'm still not sure what I did wrong, but I ended up getting taxed for income that didn't exist. I didn't know how to correct it. I wrote letters and called the IRS probably dozens of times. I spent more tha…

Shoot, I accidentally reported the same income twice even with turbotax once because I didn't understand what non-covered shares were. (And in my defense, the broker also didn't show cost basis on the 1099-B either, I was just supposed to know)

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

#155

Post by JohnFen »

jghn wrote: post #143
amerkhalid wrote: post #86

Earlier quoted context omitted.

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 had marked up the car by how much government was going to give rebate on and there was no savings for a taxpayer This is the thing that always gets me. After having seen too many examples of this I soured on these incentivized deductions. The benefit always seems to go to the middle man.

Yep. I learned decades ago to ignore those types of incentives because they don't actually provide much (if any) benefit to me.

All they do is make everything more of a hassle.

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

#156

Post by gumby »

kristopolous wrote: post #123
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

If anyone were likely to repeat a legitimate objection it would be these guys.

But to your point: if there were a legit objection we’d have heard it by now.

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

#157

Post by gumby »

kjkjadksj wrote: post #130
gumby wrote: post #120

Earlier quoted context omitted.

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.

I agree with your reasoning, but don’t think it would play out that way.

If a big sector from the S&P sank it would drive an apparent large secular reduction in the overall market, and in particular in the index funds. And opponents would seize upon it and beat the drums.

Most of the financial news is incoherent and lazy — this would be just another example.

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

#158

Post by ghaff »

dmoy wrote: post #154
recursive wrote: post #134

Earlier quoted context omitted.

I'm one of the people you're talking about. I tried it and it had the opposite effect. I tried to do it with the plain forms once about 15 years ago. Somehow I ended up reporting the same input twice or something? I'm still not sure what I did wrong, but I ended up getting taxed for income that didn't exist. I didn't know how to correct it. I wrote letters and called the IRS probably dozens of times. I spent more tha…

Shoot, I accidentally reported the same income twice even with turbotax once because I didn't understand what non-covered shares were. (And in my defense, the broker also didn't show cost basis on the 1099-B either, I was just supposed to know)

I forget when the cost basis reporting requirements got firmed up but there were some point where I had options from a former employer that had gone through a couple rounds of acquisitions and when I eventually sold the shares I ended up throwing my hands up a plugged in some average cost basis that was somewhere in the ballpark and called it a day. It's all pretty automatic these days but it used to often be a real mess to try to do accurately.

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

#159

Post by JohnFen »

vonwoodson wrote: post #56
bell-cot wrote: post #12

Earlier quoted context omitted.

> What does the average American think about this? Like most problems, the average American has (for political purposes) ~zero mental engagement with this. Vs. those for-profit corporations (and a variety of other interest groups) are intensely engaged. And it's all-too-frequently reported that any politician who wants to be (re-)elected to America's Congress needs to be intensely engaged with wooing interest group s…

Here here! And, that is honestly the best. It’s why we have a republic and not a “pure democracy”. Nobody likes taxes, but other than having to interface with the system once a year… who cares ? I can pay H&R Block $X or pay $Y more in taxes. Whoopie!

> I can pay H&R Block $X or pay $Y more in taxes.

I'd much rather my money go to the government than to tax preparers, though.

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

#160

Post by xnorswap »

pclmulqdq wrote: post #91
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 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 appreciate what you're trying to say, but:

This is a direct quote from 1040:

> 14 Add lines 12 and 13

> 15 Subtract line 14 from line 11.

Compared to a real system, that is insane.

You have to deliberately enter redundant information onto a form that should be handled automatically by a computer.

It feels like the only purpose is to catch you out in case you make a mistake.

Furthermore, the system should be set up so most people never even need to file.

You can quickly check in the UK if you need to file via https://www.gov.uk/check-if-you-need-tax-return/

( You don't need even to login to do that one, you can try it out yourself even if you're not in the UK to get a sense for the self-assessment requirements )

Most employed people don't have to file.

And even if you do need to file, you can do so online via another helpful form: https://www.gov.uk/log-in-file-self-assessment-tax-return

Functional online forms which actually take into account your answers and don't ask you to get out a calculator.

And keep in mind that the US tax system feels like it's set up to pretend you "owe" lots of tax, only for there to be a ton of reimbursements or allowances or refunds.

Which is then more forms to fill in (Form 2555 in my case ), each with their own cryptic instructions on where to write numbers and what to add to what:

> Subtract line 25 from line 24. Enter the result here and on line 27 on page 3.

Literally getting you to write it in twice because there's a page break?

Do you really think this is simple?

> 32 Multiply $49.10 by the number of days on line 31. If 365 is entered on line 31, enter $17,920 here

> 33 Subtract line 32 from line 30

> 34 Enter employer-provided amounts. See instructions

> 35 Divide line 34 by line 27. Enter the result as a decimal (rounded to at least three places), but don’t enter more than “1.000”

> 36 Housing exclusion. Multiply line 33 by line 35. Enter the result but don’t enter more than the amount on line 34. Also, complete Part VIII

That's a direct quote of 5 lines in a row from form 2555.

That's not a tax form that's a fucking arithmetic test.

Oh, and that "See Instructions" means a completely different booklet of guidance, in case anyone thought it was on the form itself.

Post reply on HN