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Free IRS-run tax filing pilot to be available in 13 states

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Re: Free IRS-run tax filing pilot to be available in 13 states

#191

Post by LordDragonfang »

frumper wrote: post #154
LordDragonfang wrote: post #146

Earlier quoted context omitted.

>They should just give you an itemized breakdown and ask if it's correct. I'm sorry, but this response comes up every time, and every time the answer is "yes, that's why I said you should be able to just tell them it's correct." It doesn't have to be any more difficult than checking a box. 90% of people are just going to use the standard deduction (no, seriously: in 2019 it was 87.3%[1]), and for most people their fi…

It's very reasonable to take the standard deduction with other deductions and credits. The standard deduction only replaces some of them. edit: It's also possible you file before things are reported to the IRS about you.

And in each case those additional deductions apply to a small minority of people, and they are often things the IRS can probably already know. All of which you can choose to add with a question or two. You're missing the point, though - the IRS already has 90% of my data. Under no circumstances should I be having to re-enter my W-2, a document they already have on file, and stress about making errors in data entry.

Re: Free IRS-run tax filing pilot to be available in 13 states

#192

Post by greyface- »

amalcon wrote: post #177
ghaff wrote: post #88

Earlier quoted context omitted.

That list suggests that if you have a 1099 (which I assume is most people with meaningful savings), you probably won't qualify.

> Interest of $1,500 or less The only 1099 that most people will get, even with meaningful savings, meets this description.

"Gig work" typically results in 1099 rather than W-2 income, and is common.

Re: Free IRS-run tax filing pilot to be available in 13 states

#193

Post by zzzeek »

SV_BubbleTime wrote: post #145
zzzeek wrote: post #60

Credit to Joe Biden and the Inflation Reduction Act for making this possible. If Trump wins again he's going to have a lot of work destroying all the progress Biden has made in just one term.

My satire detector is surely broken. It’s just wobbling between wtf and woosh. It’s OK, I don’t need to understand everything all the time.

Read the PR. it explicitly credits the Inflation Reduction Act for funding and making the whole thing possible.

Re: Free IRS-run tax filing pilot to be available in 13 states

#194

Post by fire »

Kon-Peki wrote: post #186
tombert wrote: post #83

Earlier quoted context omitted.

Yeah, this has been my frustration too; I got audited by the IRS in 2021 because I forgot to declare stock sales, and so I owe about $8,000: $7,000 for the missing taxes and a $1,000 fine. I wasn't terribly mad about the money (if I owe $7,000 then that's what I owe, it was my fault), but what I was mad about was the fact that I had to do anything in 2021 at all. If the IRS knows enough to know what I owe them, then…

They don’t know enough to know how much you owe them, but they do know that you got $xx,xxx from a brokerage account and that the tax would be $7,000 unless there were some things unknown to them that would make it a lower amount. You didn’t tell them about any of those things, so they assumed the full amount but were perfectly willing to be shown that that this assumption was wrong.

my favorite part is how brokerages like morgan stanley don't report the cost basis when they report your sales to the irs, and for no reason I can find.

This means that if you don't report sales from your side so you can note the cost basis, the irs assumes a cost basis of 0 and calculates owed tax on the entire sale value - this applies to stuff like RSU grants as well, and trips up a great many people entering the tech sector ( especially young people who may not have much tax filing experience )

I legitimately don't know why brokerages don't all include the cost basis by default ( or why they aren't required to by law )

Re: Free IRS-run tax filing pilot to be available in 13 states

#195

Post by LordDragonfang »

kevin_thibedeau wrote: post #161
LordDragonfang wrote: post #65

Earlier quoted context omitted.

See, this is the thing that gets me. For almost anyone who fits in this box, you shouldn't have to file in the first place . Not "shouldn't have to pay", but literally, "should not have to send documents to the government telling them how much you owe them" - because they already have all of that information . They should just give you an itemized breakdown and ask if it's correct.

Then people with informal income streams will systematically underpay.

...Which is exactly how it is now, because there's nothing stopping you from not reporting payment under the table. The marginal increase in the number of people who might decide to commit tax fraud because they see the government doesn't know about all their waitressing tips (but were previously dutifully doing all the bookkeeping to report them?) is negligible compared to the hundreds of thousands of potential economic activity the current system wastes per year.

Re: Free IRS-run tax filing pilot to be available in 13 states

#196

Post by TJSomething »

coconut08 wrote: post #116
radlad wrote: post #109

Earlier quoted context omitted.

FWIW, FreeTaxUSA[0] is much cheaper than Intuit and has worked great for me the past few years. I find it slightly easier than TurboTax, in fact. [0] https://www.freetaxusa.com/

sorry... cheaper? surely a place called free tax usa would be free?

It's free for me, but I don't have state income taxes.

Re: Free IRS-run tax filing pilot to be available in 13 states

#198

Post by erik_seaberg »

nashashmi wrote: post #151
tombert wrote: post #50

This is great news; no matter how restricted it may be initially, I think having a "guaranteed-free" tax filing system will be great for most people, especially lower-income people. The private companies have demonstrated pretty clearly that they will do everything they can to avoid people actually having free tax filing, and while ~$50-100 might not seem like a ton of money, keep in mind that at the current United S…

Just print out the sheet from your broker of all the trades you did with the end result of gains circled. Send that in. You should be ok from doing anything more complex.

If you buy or vest more shares, you might not be able to use capital losses to offset your gains until you understand the wash-sale rule.

Re: Free IRS-run tax filing pilot to be available in 13 states

#199

Post by h2odragon »

mdaniel wrote: post #42

Does that mean I can FOIA for the source code? I ask in all seriousness: I believe some things are withheld/redacted due to "national security" but if they hard-coded mainframe credentials in their source code that's not my fault

Much government source is public domain by default, and they are decent about publishing it. If this is owned by the IRS, then probably it will be public. If its a service contracted out, then perhaps not.

Re: Free IRS-run tax filing pilot to be available in 13 states

#200

Post by lr4444lr »

gamblor956 wrote: post #41
lr4444lr wrote: post #11

Earlier quoted context omitted.

Maybe. Or maybe a lot of people will leave refunds on the table because the software will be bad at helping people identify their deductions. Also, my wife paid a joint filing online under my SSN, and the system couldn't figure that out and claimed we were in arrears. I'm not hopeful.

Also, my wife paid a joint filing online under my SSN, and the system couldn't figure that out It's not surprising the system couldn't figure that out. There is no such thing as a joint-filing under a single SSN. You need to include both spouse's SSNs or ITINs on the 1040 to file jointly, and the return is treated as a "joint" return (meaning, equally by both spouses).

We did include both, but we either had to make an account under one of our names, or the check had a name that didn't match on another spot (it was quite a while ago). Despite the IRS having our filing records, they couldn't match it to the payment. It's really not a hard problem.
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