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Free Tax Software Is Bad

common-form.com

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Re: Free Tax Software Is Bad

#2

Post by jarcane »

Thing is, this is a new phenomenon, being accessible free for so very many people.

Federal "free e-File" cut off is a lot lower than what TurboTax is offering this year; I only ever even qualified for federal most years, state still cost, and not long ago even if you qualified for free e-file on income grounds you could still be charged a percentage of your refund if it went over a certain amount (I wound up paying a little bit while I was in college and collecting Obama's student tax credit).

This "Absolute Zero" thing is something they've offered above and beyond the requirement, most likely to encourage more people to connect to the system and make it easier to sell them on doing it again through TT next year when it's not so free anymore.

And I find it a little rich that Common Form is criticizing them on this, considering they only even support filing a 1040EZ, which is a vastly simpler form than even a 1040A, is only available below a certain income cutoff (which cutoff used to line up almost exactly with the "free e-file" rule), and they're charging $20 for them to process a 1-page form you can do by hand in about 20 minutes.

Re: Free Tax Software Is Bad

#3

Post by raverbashing »

Yeah, that's why in a lot of countries you just use the state-sanctioned software and be done with it.

This is just BS from companies afraid to lose their cash cow.

Fraud is always going to happen, period. Deal with them and that's it.

Re: Free Tax Software Is Bad

#6

Post by repomies69 »

It is quite funny, looking from a small country, how big the "tax software" industry is in the US. I live in Finland, but even we have about 5 alternatives for accounting software etc. However, not much for personal use. I often wonder how big percent of the software people work only on these problems, which relate to tax filings, refunds etc.

Re: Free Tax Software Is Bad

#7

Post by raziel2p »

repomies69 wrote: post #6

It is quite funny, looking from a small country, how big the "tax software" industry is in the US. I live in Finland, but even we have about 5 alternatives for accounting software etc. However, not much for personal use. I often wonder how big percent of the software people work only on these problems, which relate to tax filings, refunds etc.

Same here, coming from Norway. My process of filling in taxes is get an e-mail notifying me it's ready to be checked, log in to a government website using a secure ID chip thingy, check that the yearly income and tax percentage looks correct, click OK, done.

Taxes are paid continuously by my employer on each salary payment, and if at the end of the year it turns out I paid too little, I get a bill, and if I paid too much, I get a return to my bank account.

Re: Free Tax Software Is Bad

#8

Post by josteink »

raverbashing wrote: post #3

Yeah, that's why in a lot of countries you just use the state-sanctioned software and be done with it. This is just BS from companies afraid to lose their cash cow. Fraud is always going to happen, period. Deal with them and that's it.

> in a lot of countries you just use the state-sanctioned software

Make that free, web-based & state-hosted online solutions.

What is this tax-software thing you are taking about?

Re: Free Tax Software Is Bad

#9

Post by jsprogrammer »

Privatized tax collectors are bad. Private collectors have every incentive to make collection as difficult as possible so as to cement their position (and profits).

A government that employs a tax scheme that is so complicated that it requires private collectors is signalling dysfunction and is presenting an attack surface whereby that government is open to undue influence from the collectors while simultaneously hampering the people's ability to direct the affairs of that government.

How much time does a person have to spend to understand and comply with the requirements of the tax scheme? Well, in the US, practically no one knows because they are paying a private collector to figure it out for them. Even when going with a private collector the time I spend at the end of the year is measured in hours. Without the private collector it would likely be more than a dozen hours, and that's just for filling out forms. There is also a significant time cost to maintain and store various documents throughout the year.

Now consider that those are the costs if you are already familiar with the scheme. If you aren't already familiar with the scheme, you're pretty much SOL. The government doesn't even notify you that you are required to pay any taxes until you don't and informs you that they are coming after you for penalties. Go check out the IRS's website [1], no where on the landing page is there an obvious explanation of what your responsibilities are. If you manage to make it to the form 1040 instructions[2], you've got a 100+ page PDF to read up on just to learn how to fill out one of the forms. There's also handfuls of other forms and and instructions all over their site, with no comprehensive structure or explanation for.

The above scenario is already a nightmare and it doesn't even touch on what the actual tax scheme is[3], which the IRS doesn't even bother to host, but instead links to the website of a the law school at an Ivy League university. When you try to read the scheme on the third party site, you have to click through several layers of titles, subtitles, chapters, subchapters, sections, etc. just to be able to read one portion of the scheme at a time. As you try to just get to an actual sentence in the scheme you get prompted by a pop-up to donate $50+ to an unidentified entity for an ambiguous cause[4].

At this point, I've given up researching the matter further. The current system is indefensible and needs to be abandoned as soon as possible.

[1] http://www.irs.gov [2] http://www.irs.gov/pub/irs-pdf/i1040gi.pdf [3] http://www.law.cornell.edu/uscode/text/26 [4] http://i.imgur.com/vSppOXX.png

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