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Free Tax Software Is Bad

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Re: Free Tax Software Is Bad

#21

Post by ptaipale »

josteink wrote: post #8
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?

Finland: the tax administration knows almost everything about your money already, income tax is withheld by employers in advance through a pay-as-you-earn system (and this has been on for decades).

Tax authorities would like to get direct access to see bank accounts, that's not on yet.

Filing a tax return is very easy. Usually you need to do nothing, but if you have some specific tax deductions - not much is eligible - then you can do it with a fairly simple Web interface, or leave an equally simple paper form.

Re: Free Tax Software Is Bad

#22

Post by ceejayoz »

I'm usually quite good about catching "we're gonna sell your data!" dark patterns, but having just done my taxes on TurboTax I definitely saw that consent form and didn't understand its implications. Yeesh.

Re: Free Tax Software Is Bad

#23

Post by maxerickson »

ptaipale wrote: post #21
josteink wrote: post #8

Earlier quoted context omitted.

> 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?

Finland: the tax administration knows almost everything about your money already, income tax is withheld by employers in advance through a pay-as-you-earn system (and this has been on for decades). Tax authorities would like to get direct access to see bank accounts, that's not on yet. Filing a tax return is very easy. Usually you need to do nothing, but if you have some specific tax deductions - not much is eligible…

Your first paragraph is largely true for the US (people running quite small businesses don't necessarily have to keep up with pay as you earn, but the limits are a few thousand dollars and then the correct thing is to make regular payments during the year).

Re: Free Tax Software Is Bad

#24

Post by sokoloff »

chii wrote: post #20
sokoloff wrote: post #17

Earlier quoted context omitted.

I'd use "preparer" everywhere you use "collector" above. The private companies don't actually collect the money; that goes straight to/from the government. The private companies, whether silicon or carbon-based, just serve to help you prepare your tax return (ie: calculate your total tax and file the return). I agree with you on the complexity points, as I spend in the just barely four-figures annually for my CPA/EA…

> push that information to you in a customized-to-you fashion. but the IRS somehow knows exactly what you owed them and why, so why can't they just perform that calculation before hand, and then tell you it, instead of forcing an onerous process on everyone else, and waste people's resources paying for tax-preparation services?

The largest blocker in my experience is that they don't have that information processed for 6-18 months after the filing deadline.

Source: personal experience with a period of very-late filing in my younger and dumber days.

Other factors are that they can't possibly know your total liability. They literally don't know exactly what you owe them.

Cash-based employment or trade, sales of securities purchased prior to the very recent cost-basis rules, basically anything schedule C or E (small business or rental property), etc, etc.

They might be able to auto-file something close for the simple W-2 employee case with no investments, but they don't have a secret computer system with your full return auto-prepared and just waiting to catch you for forgetting to enter $12 in bank interest from a long-forgotten account.

Re: Free Tax Software Is Bad

#25

Post by wsha »

Interesting point. For the past few years, I have printed out my return and mailed it in because that is free and e-filing costs money. I do it partly because it is cheaper but also partly because I find it sad that e-filing is not easier and more cost effective for the government to handle than a paper submission (if it is, it is sad that the government is not incentivizing it through cost). Maybe the government just prints the e-filed return out and adds it to the stack of mailed in returns to be processed. It seems like there would be big gains in efficiency if the government had a standard digital submission protocol, if they could get past the initial cost to develop it and could handle the security issues it would entail.

Re: Free Tax Software Is Bad

#26

Post by [deleted] »

chii wrote: post #20
sokoloff wrote: post #17

Earlier quoted context omitted.

I'd use "preparer" everywhere you use "collector" above. The private companies don't actually collect the money; that goes straight to/from the government. The private companies, whether silicon or carbon-based, just serve to help you prepare your tax return (ie: calculate your total tax and file the return). I agree with you on the complexity points, as I spend in the just barely four-figures annually for my CPA/EA…

> push that information to you in a customized-to-you fashion. but the IRS somehow knows exactly what you owed them and why, so why can't they just perform that calculation before hand, and then tell you it, instead of forcing an onerous process on everyone else, and waste people's resources paying for tax-preparation services?

[deleted]

Re: Free Tax Software Is Bad

#27

Post by tonfa »

lawl wrote: post #11
josteink wrote: post #8

Earlier quoted context omitted.

> 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?

For Switzerland there's a java based software that allows you to print a PDF in the end you can send by snail-mail. See this page if you're interested: https://translate.google.com/translate?sl=auto&tl=en&js=y&pr... They also have a web based solution, but I personally prefer not to use it, because I don't trust it.

I switched to the online version, and I can't really tell the difference vs. the java software.

Out of curiousity what do you not trust?

Re: Free Tax Software Is Bad

#28

Post by jarcane »

maxerickson wrote: post #23
ptaipale wrote: post #21

Earlier quoted context omitted.

Finland: the tax administration knows almost everything about your money already, income tax is withheld by employers in advance through a pay-as-you-earn system (and this has been on for decades). Tax authorities would like to get direct access to see bank accounts, that's not on yet. Filing a tax return is very easy. Usually you need to do nothing, but if you have some specific tax deductions - not much is eligible…

Your first paragraph is largely true for the US (people running quite small businesses don't necessarily have to keep up with pay as you earn, but the limits are a few thousand dollars and then the correct thing is to make regular payments during the year).

The difference is that US agencies don't actually use this information, likely because of privacy regulations and stop forth. The right hand rarely knows what the left is doing, unless law enforcement or homeland security get involved.

You can see this even more starkly in the difference between the two in regards to medical records. Or even just basic personal details. My Kela card mostly tells doctors all they need to know, and even my address changes seem to get around without my having to do anything about it.

It was a bit unsettling at first for an American, but the systems here are largely pretty efficient except where unemployment is concerned...

Re: Free Tax Software Is Bad

#29

Post by chrisan »

chii wrote: post #20
sokoloff wrote: post #17

Earlier quoted context omitted.

I'd use "preparer" everywhere you use "collector" above. The private companies don't actually collect the money; that goes straight to/from the government. The private companies, whether silicon or carbon-based, just serve to help you prepare your tax return (ie: calculate your total tax and file the return). I agree with you on the complexity points, as I spend in the just barely four-figures annually for my CPA/EA…

> push that information to you in a customized-to-you fashion. but the IRS somehow knows exactly what you owed them and why, so why can't they just perform that calculation before hand, and then tell you it, instead of forcing an onerous process on everyone else, and waste people's resources paying for tax-preparation services?

> but the IRS somehow knows exactly what you owed them and why

They know how much you owe them before deductions.

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