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How the Maker of TurboTax Fought Free, Simple Tax Filing

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Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#281

Post by SilasX »

danso wrote: post #137

The fact that a tax-hater such as Grover Norquist opposes reforming the tax-filing procedures illustrates the complex dichotomy between giving government good responsibility without giving it dictatorship-like responsibility. In Norquist's opinion, making taxes too easy to file will make citzenry too complacent about how they're being nickel-and-dimed and will lull them into not pursuing reform. OK, fair enough. But…

>But what about a scenario in which for 30-50 million Americans file for their taxes by sending a SMS (as it's apparently done in Scandinavian countries)? And all the other taxpayers, they're wondering: "Why the f-ck can't my taxes be that easy??"

How does your independent consultancy cram all of its income and expenditure items into an SMS?

Less snark version: the main cause of complicated tax code is needing to have rules about how much you can deduct for an expense when determining net income (for entities taxed by net rather than gross income, like corporations and independent contractors), not from special credits or varying rate schedules.

That problem, in turn, is amplified by the size of the taxes, which gives people an incentive to abuse whatever leeway is given by the deduction rules, forcing them to be more precise, leading tax experts to abuse the new language, and so on.

Btw, just did my taxes. Did you know that the cost of classes to change your career or improve earnings isn't deductible unless it's from an institution on an approved list?

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#282

Post by pdubs »

pc86 wrote: post #108
pdubs wrote: post #74

Earlier quoted context omitted.

Only if it's malicious or intentional. A mistake will be picked up and you'll get a form a year or two later asking you to accept or challenge proposed corrections. If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable. I'm not saying the whole system isn't needlessly complex, but don't make it out like the IRS is actively out to get you.

My return for 2008 or 09 was a mess . I had one 1099 I never received from a former employer I'm convinced was trying to screw me, I had one 1099 sent to a former address and a debt forgiveness 1099 from a credit card charge off. I got a packet from the IRS listing the adjustments, what they proposed I owed and very clear and detailed instructions on how to respond to each of the three changes. Incredibly easy to res…

I challenged the adjustments to one of my returns and the most difficult part for me was finding a damn fax machine while I was on hold with a very helpful woman at the IRS. In the end they admitted they made a mistake (to their credit, an understandable one) in saying that I made a mistake and I lost a total of maybe an hour or two of my time.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#283

Post by SilasX »

greyboy wrote: post #68
niggler wrote: post #28

Earlier quoted context omitted.

I think many of us here don't get paid by W2 or by 1099. We are compensated in different ways which don't require those types of filings (e.g. K1), in which case we do need to fill out forms.

I can't speak specifically for the group here, but the vast majority of US taxpayers by a large margin _are_ compensated via W-2 or 1099. Isn't that who it should be optimized for, rather than outliers or exceptions?

Definitely ... until someone finds tax advantages to being in a different category and people gradually "reinvent" themselves as being in that category.

You were outraged at hedge fund managers classifying their income as interest (15% tax) rather than "earned income" (~35% income tax)? Well, wait until the income tax goes back up to 50+%, and see how many non-"earned income" ways there are to compensate employees...

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#284

Post by scott_s »

flagnog wrote: post #215
ajross wrote: post #205

Earlier quoted context omitted.

Is that what happened in this case? Again, this is turning into an anti-government diatribe. The original assertion was that the IRS would apply heavy penalties for getting math wrong on the return. No, that's incorrect. Then it was that they'll assess a 12% penalty. No, that's wrong too, it's just a 4% APR. Now your claim is that they're... what, lying in wait ? Deliberately maximizing penalties? That's not my exper…

how do you like working for the IRS? Seriously - you're arguing FOR the group that takes money from people at gun point?

Yes. That's how we pay for the public goods that our society relies on.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#285

Post by KMag »

niggler wrote: post #263
sschueller wrote: post #254

Earlier quoted context omitted.

Worst part is that we have to pay US taxes as well local taxes even if we don't live or make any money in the US. If you live in a county with an effective lower tax rate you have to pay the difference. I take home less money than someone with the same job and same expenses. In addition it's so cumbersome to file from abroad that I have to pay someone. It's like the king of England collecting taxes from the ones who…

"Worst part is that we have to pay US taxes as well local taxes even if we don't live or make any money in the US." You can resign your citizenship. I remember hearing reports of people doing this last year (going to Singapore)

Be careful there. It's explicitly illegal to resign one's U.S. citizenship for the purpose of reducing one's tax bill.

For instance, Saverin nominally gave up his U.S. citizenship in order to make doing business in S.E. Asia easier.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#286

Post by KMag »

sliverstorm wrote: post #130
ajross wrote: post #122

Earlier quoted context omitted.

No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true. We've made five-figure goofs on taxes in the past and a simple letter explaining the mistake (assuming it's an explainable mistake and you didn't get caught in actual attempted fraud) is enough to get the penalty waved.

This is my experience as well, and the experience of everyone I know. At least for us, the IRS is not out to give us the run-around. Besides, if you think about it, even if you figure the IRS is greedy and only motivated by money, the biggest returns for them are catching fraudulent millionaires dodging tens or hundreds of thousands, rather than slapping you with a $100 fine over a $2.38 mistake.

Another profitable tactic would be to find the sweet spot of people who make enough money that they can be accused of large tax errors, but not make so much money that they can afford to fight it all the way out in court.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#288

Post by mgkimsal »

seanalltogether wrote: post #252
mgkimsal wrote: post #247

Earlier quoted context omitted.

As a US person who visits other countries, I get scared about making a mistake in immigration issues. Going through customs in a country where you don't speak the language (well or at all) is scary.

I agree. Applying for a UK visa is not a walk in the park and you can lose a lot of money on application fees for failing to include documentation that covers every single statement you make on an application, even if that statement isn't integral to them approving the visa.

I had a visa to Russia delayed because under employer I put 'self', and they didn't seem to grok that. To their credit, the agency called me and asked for clarification, vs mailing documents back.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#289

Post by darkarmani »

FireBeyond wrote: post #217
brk wrote: post #147

Earlier quoted context omitted.

Seconded. Mine was a 6 figure mistake. I fact, it COST the IRS money to contact me. Once they sent info I realized the error, and that I did not in fact owe 6 figures. Paid it anyway so my wife wouldn't stress about penalities, restated ( took a year) and then received a refund with hefty interest paid by the IRS. Along the way their support line was helpful in getting some questions answered.

At the risk of seeming flippant, but if you can afford to pay a six figure mistake just "so my wife wouldn't stress", then she probably really didn't have too much to stress about, financial burden of penalties or otherwise.

I don't know. Not paying what appears to be a 6-figure tax bill would be pretty stressful considering the amount of taxes the IRS would think you were evading.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#290

Post by darkarmani »

navait wrote: post #31
MatthewPhillips wrote: post #18

Earlier quoted context omitted.

The government is not bad at code because of lobbying, they're bad at code because of fluctuating budgets, low salaries, and ridiculous processes.

The IRS was recruiting for interns at my university recently, who could eventually become full time workers. However, I found that at best I could enter as a GS-9, and those were positions with 5 years of expirience. The best salary I could get from that was $53,000 in NYC. Even the lowest offers my friends were getting were $60k in a low-cost area. If the government was able to fund it's IT operations at market rate…

It used to be that they hired at GS-7, but accelerated you to GS-12 in 2.5 years. GS-9 at 6-months and then 11, 12 after a year each.

Within 10 years you'll get a capped GS-14 spot (105k-136k) and by 15 years, you'll have 5 weeks vacation, 13 holidays, alternative work schedule, 13 days of forever accruing sick time (think family medical leave for having kids). Oh, and you can't be fired unless you do something really stupid -- so clock in and out 9-5.

Oh and you get COLA increases even if you don't get step or grade raises.

I only lasted a year, but I have friends that are still there. The fact that you can't get fired also applies to the colleagues you'll be working with...

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