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Killing TurboTax

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Re: Killing TurboTax

#431

Post by kennywinker »

yunesj wrote: post #379
azog_alone wrote: post #316

Earlier quoted context omitted.

The reason the tax code is so complicated is BECAUSE OF TurboTax. They lobby heavily to keep things complex and have brought down potential competitors through legal means. As such, "killing TurboTax" is the correct first step.

I didn’t see evidence in the linked article and the cited article therein that Intuit tried to prevent a simplification of the tax code. They just tried to stop the government from trying to build competitor software (partially paid for by Intuit and others in the tax accounting industry). Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it. I th…

> Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it.

That's not how the proposed systems work. The proposed system is: gov sends you a notice "here is your filled out tax return based on everything we know about you" and then you look over the return, make any modifications you believe are correct, and send it to them. You're not "challenging" something.

Re: Killing TurboTax

#432

Post by knowaveragejoe »

kingaillas wrote: post #322
wwww4all wrote: post #79

Earlier quoted context omitted.

Democrats have the entire government now, President, senate and the house. Democrats had filibuster proof majority when Obama was president. Why are you just blaming Republicans?

>Democrats had filibuster proof majority when Obama was president. For 2 years. And spent basically the entire time barely getting ACA through. Not a lot of "political capital" leftover for battling to have free tax filing.

They only had a filibuster-proof majority for a few months:

http://www.msnbc.com/rachel-maddow-show/fleeting-illusory-su...

Re: Killing TurboTax

#433

Post by alkonaut »

leshow wrote: post #227

This discussion feels incomplete without mentioning "return-free filing". A lot of countries you don't even need to send a return because the government already has all the info you need. https://www.taxpolicycenter.org/briefing-book/what-other-cou...

I do mortage deductions etc. and I filed my taxes some years back by responding to a text message. "If this looks right and you don't want to change anything, just reply YES and you are done for this year", basically.

In recent years it's just a smartphone app or website. Typically you cclick "next" 3 times to review and then submit.

It's around as simple as your average online retail experience.

Re: Killing TurboTax

#434

Post by asciident »

codegeek wrote: post #398
bob1029 wrote: post #298

"Killing TurboTax" is essentially a meme until we meaningfully simplify the tax code. There is no software development team on earth who could catch up with the full capabilities of TurboTax without some sort of fundamental shift in the business. I really hate to say this as someone who makes a living out of it, but dealing with the current amount of complexity in the tax code with a piece of software that a non-expe…

Agreed. This is primarily not a "software" problem. Unless we simplify our tax codes in the US, tools like turbotax will stay. In fact, to be honest, turbotax was great when I used it last in 2009ish (I know they got acquired by Intuit and have gone downhill due to Intuit ) but the point is that it is overall an excellent software that really makes it easy to calculate and file things based on current tax codes. I wo…

Simplifying the tax code will require removing special exemptions for certain interest groups. This is often rephrased as "raising the taxes on [group]" which gets a lot of pushback. For example, raising the taxes on teachers, native americans, certain small businesses, public servants, antarctica scientists, students at for-profits, etc. It's hard to fight against that message.

Re: Killing TurboTax

#435

Post by warkdarrior »

gamblor956 wrote: post #419
ralphc wrote: post #400

Earlier quoted context omitted.

Also, don't forget the IRS has a quasi-adversarial relationship with you. You're trying to pay as little tax as legally allowed, they want you to pay more. They're not motivated to show you ways to pay less tax.

This is false. The IRS wants you to pay the amount calculated as due under the information they have available about your income. The IRS is not motivated to collect more income or to deprive taxpayers of refunds. They're motivated to do their jobs, whether that means issuing a notice of amount due, or paying out a refund check (which they do for millions of taxpayers without issue, every year).

If I donate to a charity, it may reduce the tax I have to pay, especially my income is at the boundary between two tax brackets. Would IRS suggest such a donation in order to reduce the tax amount? Tax advisors do that all the time.

Re: Killing TurboTax

#437

Post by dragonwriter »

codegeek wrote: post #398
bob1029 wrote: post #298

"Killing TurboTax" is essentially a meme until we meaningfully simplify the tax code. There is no software development team on earth who could catch up with the full capabilities of TurboTax without some sort of fundamental shift in the business. I really hate to say this as someone who makes a living out of it, but dealing with the current amount of complexity in the tax code with a piece of software that a non-expe…

Agreed. This is primarily not a "software" problem. Unless we simplify our tax codes in the US, tools like turbotax will stay. In fact, to be honest, turbotax was great when I used it last in 2009ish (I know they got acquired by Intuit and have gone downhill due to Intuit ) but the point is that it is overall an excellent software that really makes it easy to calculate and file things based on current tax codes. I wo…

> This is primarily not a "software" problem.

This is true.

> Unless we simplify our tax codes in the US, tools like turbotax will stay.

The two are linked because a lot for he lobbying comes from the same place, so its unlikely that one would get changed without the other, but there's less essential link other than shared lobbying interest than you seem to think: even with the complexity of the system quite a lot of the information is already in the IRS’s hands.

Re: Killing TurboTax

#438

Post by dan-robertson »

bob1029 wrote: post #298

"Killing TurboTax" is essentially a meme until we meaningfully simplify the tax code. There is no software development team on earth who could catch up with the full capabilities of TurboTax without some sort of fundamental shift in the business. I really hate to say this as someone who makes a living out of it, but dealing with the current amount of complexity in the tax code with a piece of software that a non-expe…

Is there some software solution that may make things easier. For example if rules are written in a language like prolog could you have the system ask you the relevant questions? Would the set of rules be easier to maintain?

Re: Killing TurboTax

#439

Post by loopercal »

warkdarrior wrote: post #435
gamblor956 wrote: post #419

Earlier quoted context omitted.

This is false. The IRS wants you to pay the amount calculated as due under the information they have available about your income. The IRS is not motivated to collect more income or to deprive taxpayers of refunds. They're motivated to do their jobs, whether that means issuing a notice of amount due, or paying out a refund check (which they do for millions of taxpayers without issue, every year).

If I donate to a charity, it may reduce the tax I have to pay, especially my income is at the boundary between two tax brackets. Would IRS suggest such a donation in order to reduce the tax amount? Tax advisors do that all the time.

>especially my income is at the boundary between two tax brackets

Wait, can you explain how tax brackets work because I think there may be a fundamental misunderstanding here.

If we have two brackets, 10% for $100, what do you think the tax bill would be for someone who earned $101?

Re: Killing TurboTax

#440

Post by tylerhou »

warkdarrior wrote: post #435
gamblor956 wrote: post #419

Earlier quoted context omitted.

This is false. The IRS wants you to pay the amount calculated as due under the information they have available about your income. The IRS is not motivated to collect more income or to deprive taxpayers of refunds. They're motivated to do their jobs, whether that means issuing a notice of amount due, or paying out a refund check (which they do for millions of taxpayers without issue, every year).

If I donate to a charity, it may reduce the tax I have to pay, especially my income is at the boundary between two tax brackets. Would IRS suggest such a donation in order to reduce the tax amount? Tax advisors do that all the time.

That's not how taxes work. Unless you would have donated to a charity anyway in a subsequent year, you never gain money on net from donating since your tax rate is marginal.

Even if you have super low income and you are on the border for benefits (EITC, Medicare), donating to a charity will not make you eligible for those benefits because that eligibility is determined by AGI, which is income before deductions.

The only situation which this makes sense on net is if you tell your tax advisor that you want to donate some amount of money over the next few years. Then the advisor might tell you to donate in high-earning years to offset a higher marginal rate. In the above proposed scheme, the IRS would only get one year's worth of data, so it cannot recommend you this type of tax avoidance.

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