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IRS Direct File to open to all 50 states and D.C. for 2025 tax season

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Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#111

Post by giantg2 »

pooper wrote: post #93
JumpCrisscross wrote: post #90

Earlier quoted context omitted.

> going to be hard to argue with people on the basis of what was "good" I'd expand this to examples of either party undoing legislation the other championed and passed. It's exceedingly rare, in large part by design.

I still hope we can undo the "permanent" tax cuts of 2017 at some point.

Which ones specifically? I haven't followed how the individual elements have played out. Many of the elements seem minor, but I don't remember if the CBO broke down which portions would create the deficit. I assume it's the corporate pieces, but don't know which ones.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#112

Post by dheera »

macrael wrote: post #81

It's SUCH a win that they managed to roll this out to a small set of tax situations and states to start. Every government project I've been on has required creativity in defining an MVP that doesn't include shipping to everyone. This was cited consistently as one of the great successes of this project, they were able to ship something that successfully filed 150k taxes b/c they were able to scope things down to somet…

sigh this is a baby step but

- Many if not most software engineers in California earn more than the $200K household limitation for using Direct File

- From my understanding there is no way auto-generate my state tax return from Direct File so I would have to do all the work twice even if I can use it

- Complicating my tax situation (legally) allows me to save more money, I would save far more than the price of TurboTax by using TurboTax instead of Direct File, as much as I hate it

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#113

Post by tantalor »

londons_explore wrote: post #88
yndoendo wrote: post #53

I would argue that having to file taxes through a 3rd party accountant or service is not only forced commerce but also broken glass economics. Looks like it helps the economy by creating jobs but the job is redundant and does not create anything of value. Where are crimes more likely to occur, a city with 10,000 or 1 million? Where are financial crimes more likely to occur, people that make $10,000 a year or people t…

Conventional wisdom is that if one can fund the IRS with one extra dollar, and they use that dollar to collect two dollars more taxes (from evaders), than that was a good way to spend taxpayers money. Many economists don't agree though. If you care about economic success of the country, the goal isn't 'collect as many taxes as possible'. The goal is to make the citizens wealthier in real terms. Effort your citizens p…

Economics is not divorced from ethics. Fairness matters. If people think the system is rigged they won't participate, or they will try to find their own way to exploit the system.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#114

Post by giantg2 »

yndoendo wrote: post #53

I would argue that having to file taxes through a 3rd party accountant or service is not only forced commerce but also broken glass economics. Looks like it helps the economy by creating jobs but the job is redundant and does not create anything of value. Where are crimes more likely to occur, a city with 10,000 or 1 million? Where are financial crimes more likely to occur, people that make $10,000 a year or people t…

"I would argue that having to file taxes through a 3rd party accountant or service is not only forced commerce but also broken glass economics"

Where are people being forced to use a 3rd party? My understanding is that direct file is optional, hiring someone is optional, and using tax software is optional. Isn't it still possible to file with paper on your own?

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#115

Post by lesuorac »

frutiger wrote: post #52
swozey wrote: post #36

Earlier quoted context omitted.

The tax system here (usa) is an absolute joke. I owed $5k this year and I literally did nothing different except receive a small 5% raise last year. I have the most basic taxes you can, single, no kids, no house. Literally just a salary paycheck every 2 weeks. Had no idea I would owe anything, much less that much money until I filed 2 weeks prior to our tax date in April and you're expected to pay everything you owe…

> I owed $5k this year and I literally did nothing different except receive a small 5% raise last year. This is a common gripe I hear from US tax filers, and I fall into the same psychological trap myself. After all, it always feels bad to have to pay a 4 or 5 figure sum to anyone. Instead, you should see this as a benefit -- you had the opportunity to extract gains from the stock market (or other investment) on mone…

I don't remember what all the limits are but the first time you underpay beyond a certain amount the government looks the other way but the second+ time you have to pay penalties. Penalties for a situation wholly in control of the government. They wrote the withholding tables your employer is abiding by to withhold _not enough_ to avoid you having a penalty at the end of the year.

Although I suspect this only matters to FANG where the changes to withholding from the Tax Cuts & Jobs Act meant you had to modify the supplemental withholding rates so you wouldn't get penalized.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#116

Post by khuey »

whimsicalism wrote: post #71
demosthanos wrote: post #63

Earlier quoted context omitted.

What is the income limit? The IRS's publication describing the program for 2023 lists a 1099-INT income limit but no W-2 income limit: https://www.irs.gov/pub/irs-pdf/p5917.pdf

"You can’t use Direct File if your wages are more than $200,000 ($160,200 if you had more than one employer)." from https://directfile.irs.gov/income

Based on those numbers it sounds like the limitation is more "Direct File can't handle the Additional Medicare Tax or overwithheld FICA yet" than a baseless exclusion of higher income taxpayers.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#118

Post by IncreasePosts »

londons_explore wrote: post #88
yndoendo wrote: post #53

I would argue that having to file taxes through a 3rd party accountant or service is not only forced commerce but also broken glass economics. Looks like it helps the economy by creating jobs but the job is redundant and does not create anything of value. Where are crimes more likely to occur, a city with 10,000 or 1 million? Where are financial crimes more likely to occur, people that make $10,000 a year or people t…

Conventional wisdom is that if one can fund the IRS with one extra dollar, and they use that dollar to collect two dollars more taxes (from evaders), than that was a good way to spend taxpayers money. Many economists don't agree though. If you care about economic success of the country, the goal isn't 'collect as many taxes as possible'. The goal is to make the citizens wealthier in real terms. Effort your citizens p…

You need to ask yourself how the tax evader uses their $2, and how the government uses their $1. And you need to ask yourself about the perceived rule of law, and how many more tax evaders you would create by letting it be known that it is easy to get away with tax evasion. And you need to ask yourself if you want tax evaders to have a leg up on investments compared to full-tax-payers.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#119

Post by lesuorac »

spiderice wrote: post #73
mminer237 wrote: post #16

Earlier quoted context omitted.

1. It surely costs way more in employee expenses to monitor, correct, and collect such small fines. Plenty of times they'll just let a $200 fine go because it's not worth the effort to collect. 2. Taxes are a means to an end, as is the government. There's no benefit to fining people for clerical mistakes besides encouraging them to not make them. There's no value created by fines. There's no shareholder greedily pock…

1. citation needed 2. In an ideal world, yes. In practice, citation needed.

1. Citation is really needed.

EITC makes up 36% of all audits and its for people making below 20k.

https://www.propublica.org/article/earned-income-tax-credit-...

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#120

Post by whimsicalism »

khuey wrote: post #116
whimsicalism wrote: post #71

Earlier quoted context omitted.

"You can’t use Direct File if your wages are more than $200,000 ($160,200 if you had more than one employer)." from https://directfile.irs.gov/income

Based on those numbers it sounds like the limitation is more "Direct File can't handle the Additional Medicare Tax or overwithheld FICA yet" than a baseless exclusion of higher income taxpayers.

good to know, thank you! totally support excluding features if it helped them get to an earlier release for most taxpayers - but hopefully they go to it eventually
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