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IRS tests free e-filing system that could compete with tax prep giants

washingtonpost.com

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Re: IRS tests free e-filing system that could compete with tax prep giants

#131

Post by bluGill »

whimsicalism wrote: post #103
_yb2s wrote: post #51

Earlier quoted context omitted.

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

My partner and I are both W2 earners and filing our taxes takes like under half an hour. Are we doing something wrong? It seriously does not seem hard to file taxes.

The tax industry goes out of their way to make it seem harder than it is to justify their existence. You can do the forms by hand (not even a calculator) faster than most tax software - most of that time is added delays to make it seem like the computer has to work hard to do something hard. Unfortunately if you do things by hand you will eventually make a trivial mistake and the IRS will get mad about that.

Re: IRS tests free e-filing system that could compete with tax prep giants

#132

Post by Osiris »

gowld wrote: post #90
jandrese wrote: post #16

For what it is worth, even with my medium-complex tax return I have had great results with freetaxusa.com for the past few years. The first couple of times we used it we ran the taxes through TurboTax and FreeTax at the same time and due to better UI the FreeTax version was faster and less confusing. That said, at the end of the process after entering all of the same information in the same places the TurboTax one di…

Can it import and parse documents from banks / investments? That's the most important part.

No. They are hosting adding a beta feature that will part W2s but it didn’t work for me.

Re: IRS tests free e-filing system that could compete with tax prep giants

#133

Post by chc »

_yb2s wrote: post #51
ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

There have been many proposals along these lines, but Republicans in Congress don't like it because they believe making it painful to file taxes will win support for their generalized opposition to taxes.

Re: IRS tests free e-filing system that could compete with tax prep giants

#134

Post by coev »

bluSCALE4 wrote: post #42

The only thing that sucks is that HR Blocks and they’re equivalent fill what otherwise would be a vacant or slot machine spots in many neighborhoods. Either way, good riddance.

More space for spirit halloween and hastily made escape rooms.

Re: IRS tests free e-filing system that could compete with tax prep giants

#135

Post by kevin_thibedeau »

_yb2s wrote: post #51
ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

> There is no reason for a w2 wage earner taking the standard deduction to need to file taxes.

Unreported gambling winnings or a low revenue side gig aren't tracked by the IRS.

Re: IRS tests free e-filing system that could compete with tax prep giants

#136

Post by SoftTalker »

LostLocalMan wrote: post #116
whimsicalism wrote: post #103

Earlier quoted context omitted.

My partner and I are both W2 earners and filing our taxes takes like under half an hour. Are we doing something wrong? It seriously does not seem hard to file taxes.

It's not hard if you have simple incomes and deduction, it's just a bloated process that you have to pay to complete (if you make enough money) and you are at risk of penalty if you accidentally fat finger manually copying printed text into a computer since the IRS already knows all the values and will know if you submitted something wrong. What would be better is if the IRS just sent you the stuff they know and you…

You can't accidentally commit tax fraud. Fraud requires intent. Errors on forms are not fraud.

Yes if your tax situation is simple, the IRS already knows everything. In many other cases (even something pretty common like self-employment income) they do not know, and you have to tell them.

Re: IRS tests free e-filing system that could compete with tax prep giants

#137

Post by mikestew »

tivert wrote: post #100
lotsofpulp wrote: post #96

Earlier quoted context omitted.

90% of federal tax filers in the US do not itemize, which includes the majority of home owners.

> 90% of federal tax filers in the US do not itemize, which includes the majority of home owners. Isn't that a relatively recent thing? IIRC, the standard deduction was massively increased a few years ago.

Isn't that a relatively recent thing?

Yes, it is. What difference do you think that makes in the present day?

Re: IRS tests free e-filing system that could compete with tax prep giants

#138

Post by cyberax »

RandallBrown wrote: post #59
_yb2s wrote: post #51

Earlier quoted context omitted.

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

How would you know if you're going to take the standard deduction without doing your taxes? I'm fairly certain the federal government doesn't know about all my deductions.

The government knows about your main itemized deductions like mortgage interest. Then it can just compare it with your standard deduction and select the one that is greater.

Of course, you might still want to amend that, but as the first pass it can be quite accurate.

Re: IRS tests free e-filing system that could compete with tax prep giants

#139

Post by petsfed »

runako wrote: post #66

"The IRS currently refers people seeking no-cost filing options to a consortium of companies that provide free e-filing for taxpayers below a certain income level. Though 70 percent of taxpayers qualify for those products, fewer than 3 percent of taxpayers use them, according to a Government Accountability Office report." This low uptake absolutely has to be one of the impediments to a rollout of a free IRS-run tax s…

This is because every member of that consortium uses some combination of dark patterns and nonsensical restrictions to divert users away from the free option towards their pay options.

Propublica did a report on this (linked several times in this discussion) that showed how difficult it was to get to the actually-free version of TurboTax.

Re: IRS tests free e-filing system that could compete with tax prep giants

#140

Post by mikestew »

RandallBrown wrote: post #59
_yb2s wrote: post #51

Earlier quoted context omitted.

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

How would you know if you're going to take the standard deduction without doing your taxes? I'm fairly certain the federal government doesn't know about all my deductions.

How would you know if you're going to take the standard deduction without doing your taxes?

People wealthy enough to even think that their deductions might exceed the standard deduction are not only in the vast minority, they're also wealthy enough that paying for TurboTax isn't an issue because they have their accountant do the taxes.

IOW, you're optimizing for the exception, not the majority case.

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