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IRS Direct File to open to all 50 states and D.C. for 2025 tax season

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Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#271

Post by davemp »

gottorf wrote: post #98
yndoendo wrote: post #53

I would argue that having to file taxes through a 3rd party accountant or service is not only forced commerce but also broken glass economics. Looks like it helps the economy by creating jobs but the job is redundant and does not create anything of value. Where are crimes more likely to occur, a city with 10,000 or 1 million? Where are financial crimes more likely to occur, people that make $10,000 a year or people t…

> Where are crimes more likely to occur, a city with 10,000 or 1 million? A city of 10,000 may very well have a higher rate of crime. In terms of your analogy, consider my lawn man, who only takes cash for his services. I know he's not taking in millions of dollars a year (or even hundreds of thousands), but I also strongly suspect that he does not report all of his income. Same goes for every cash-only business I kn…

> Not much you can do to hide, for example, a land value tax.

Unfortunately I’m not sure this is entirely true: https://www.nytimes.com/2021/04/03/opinion/sunday/property-t...

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#272

Post by rockinghigh »

galdosdi wrote: post #259
dheera wrote: post #134

Earlier quoted context omitted.

> There are 50 states, and every single one of them has their own idea That's not my problem. The states are part of the country. This is as bad as restaurants charging tips instead of stating one number. Government dudes should meet and work it out between state/federal and give me one damn number. All I want is one number.

Incorrect. You must not be a US citizen (or else went to a poor quality K12 school that failed to teach the basic civics) States are NOT an administrative subdivision of the larger country. This is a common misconception. They are not at all like Japanese prefectures, not like Canadian provinces, nor like the counties or parishes that US states are subdivided into. States are fully sovereign entities that retain to t…

No need for personal attacks. The states and the federal government could better coordinate tax filing, it would not be against the US constitution.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#273

Post by selimthegrim »

kbolino wrote: post #70
larkost wrote: post #25

Earlier quoted context omitted.

That sounds like you are agreeing with the post you are replying to: the IRS is trying very hard to stick to their rules. You have a deduction that neither you nor the IRS have paperwork for (since the fund is not acknowledging it as a covered expense), so they are following the rules. I can understand how you are frustrated about the situation, but this does not seem to me to be random behavior, but rather straightf…

If following the rules looks like there are no rules, what is the purpose of the rules?

No Country For Old Men: IRS edition

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#274

Post by throw7 »

I realize "baby steps" and I should be happy for the incremental improvements. But somehow I just can't help feeling this will stall. freetaxusa was already "free" for federal and I don't see a seamless transition to filing for states anytime soon. The cost will just shift to that value point.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#275

Post by giantg2 »

g15jv2dp wrote: post #197
giantg2 wrote: post #150

Earlier quoted context omitted.

I'm not saying it's a bad service. I'm saying for $30 some audit and legal representation is cheap insurance. The IRS can audit anyone they want. My finances are not exceedingly complicated, nor am I a high earner. It's an extremely low risk but still can happen.

I'm sorry but paying $30 for legal insurance sounds like a red flag. Either they know for absolutely sure that they will never have to pay out on the insurance, or they don't intend to pay out if/when you need it. Have you read the fine print to make sure there isn't an exclusion that will void the insurance as soon as there is any kind of problem? E.g., if the user made any kind of mistake in declaring stuff to the…

Yeah, they'll provide support if it was a mistake. It's not they they never pay out, it's just that it's exceeding rare. Group life costs me like $200/yr and pays out over $300k. Insurance can be cheap if the frequency is low.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#276

Post by giantg2 »

BeetleB wrote: post #185
giantg2 wrote: post #117

I'll still be using 3rd party software. The main benefit is the guarantee of audit support and legal representation. For such a small fee, that's decent insurance. You'll get no such benefit working directly with the IRS.

> The main benefit is the guarantee of audit support and legal representation. I strongly urge you to read the fine print. The support is usually quite limited.

Yeah, it's not like they give you a high priced litigator. What you do get is someone to work through the return with you to verify things and a consultation on what the options are. The details vary by which company you go with.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#277

Post by saagarjha »

coffeecat wrote: post #231
randerson wrote: post #128

Earlier quoted context omitted.

Anyone with company stock grants, investments, or unusual scenarios is going to find it difficult to file their tax correctly without an accountant or software. The US tax code is too complex for a regular person.

Filing a DIY tax return with investments is intimidating at first, but it's really not hard once you've done it the first time. Assuming you're not doing any esoteric cost basis adjustments, it's just a matter of knowing where to copy the numbers from your consolidated 1099. Interest and dividends go right onto your 1040. Realized capital gains go on Schedule D. If you hold any foreign stock, claim your foreign tax c…

Depends, some states (hello, California!) tax your HSA gains.

Re: IRS Direct File to open to all 50 states and D.C. for 2025 tax season

#279

Post by jltsiren »

galdosdi wrote: post #259
dheera wrote: post #134

Earlier quoted context omitted.

> There are 50 states, and every single one of them has their own idea That's not my problem. The states are part of the country. This is as bad as restaurants charging tips instead of stating one number. Government dudes should meet and work it out between state/federal and give me one damn number. All I want is one number.

Incorrect. You must not be a US citizen (or else went to a poor quality K12 school that failed to teach the basic civics) States are NOT an administrative subdivision of the larger country. This is a common misconception. They are not at all like Japanese prefectures, not like Canadian provinces, nor like the counties or parishes that US states are subdivided into. States are fully sovereign entities that retain to t…

US states are not fully sovereign. There is a simple test for that: can a state secede unilaterally. If not, states are subordinate to the federal government.

The original idea of the US was a decentralized state. The Union is the sovereign entity, while power rests with the individual states, unless explicitly given to the federal government. Over time, it became clear that you can't run a country like that in the modern world. Slowly, with creative interpretations of the Constitution, the federal government gained more and more power over the states.

One of the distinctive features of the actual US system is that it's often unclear which level of government has the authority to regulate a particular matter. Much of the political debate is about the constitutionality of laws and regulations, which may have been in force for decades. And controversial legislation often ends up in the Supreme Court, which may then decide that the state or the federal government did not have the authority to regulate that.

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