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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

#71

Post by RIMR »

Alupis wrote: post #15
droptablemain wrote: post #2

If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.

I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be…

This is overly optimistic. Intuit is the leader in this space, and they haven't produced a compelling new feature in decades. They have spent far more of their energy fighting the government to maintain their status quo than doing anything material for their customers. They even have gone as far as to lie to their customers about their eligibility for free filing just to skim a little bit off the top of the lowest earners. Even in the presence of competition, the barrier to entry is so high that Intuit has maintained a virtual monopoly on home tax preparation. They will fight to uphold/regain that before they ever fight for you.

Yes, there are alternatives, but what possible enhancement could any of them provide that is worth anything? Tax preparation is largely deterministic, and maximizing deductions is a largely human-lead task that is only beneficial to higher earners who have an accountant that does their taxes for them and don't care about services like TurboTax and FreeTaxUSA.

For most working class Americans a guaranteed free solution provided by the IRS itself is a no-brainer. You know that the government isn't in the business of maximizing profits at all costs, and you get the peace of mind that the IRS itself calculated your taxes, and that you are unlikely to get the blame if there is an error.

Tax collection is a critical function that the government relies on, it should overwhelmingly be a government-lead process that doesn't cost people any more than what they owe in taxes. I hope all of these predatory tax filing businesses go under, because paying taxes is a civic duty that people shouldn't be reliant on private organizations to fulfill for them.

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

#72

Post by Eumenes »

Analemma_ wrote: post #9

I've been using FreeTaxUSA for a while now to do my taxes, and I like it very much. (If you use TurboTax or H&R Block or something, I strongly recommend giving FreeTaxUSA a look). I was sort of wondering if the IRS would just buy them wholesale and use that as the free file software, since it's already "finished" and making another one would be duplicated effort. But is there precedent for that, the government just b…

FreeTaxUSA is great and my situation isn't trivial. Think I paid $39? I hope the IRS does not buy them.

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

#75

Post by RIMR »

l33t7332273 wrote: post #62
TylerE wrote: post #24

Earlier quoted context omitted.

Lobbying by the tax prep companies is a big part of how it got so byzantine in the first place.

Can you elaborate on that, perhaps with some substantive example? I believe that these companies lobby to keep IRS from providing free tax prep, but I do not think that they lobby to make the tax code more complicated. It’s my understanding that the tax code is complicated as a result of disparate efforts to increase support among voting blocks, to encourage/discourage behaviors, and to reward supporters/backers.

https://billmoyers.com/story/how-lobbying-by-tax-preparer-he...

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

#76

Post by whyenot »

droptablemain wrote: post #2

If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.

Will the IRS version also do my state taxes? Can it "slurp" in the statements from my brokerage accounts? Can it do rental income? I have no love for Intuit and all the rest, but even with the constant up-selling and the other BS you have to put up with, it does help me tremendously with what would otherwise be a complicated task that I dread doing every year.

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

#77

Post by bastardoperator »

Alupis wrote: post #15
droptablemain wrote: post #2

If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.

I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be…

I agree and they already do to some extent. I could easily do my own taxes. I pay for a service because they take on liability when it comes to my tax return being correct. If they screw up, and they have, they fix it. That is worth 50-100 dollars to me...

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

#78

Post by jjulius »

To clarify: This is not a full launch, it's just a "limited pilot" that will only be available in 13 states in 2024.

Arizona

California

Florida

Massachussetts

Nevada

New Hampshire

New York

South Dakota

Tennessee

Texas

Washington

Wyoming

Someone please correct me if I'm wrong.

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

#80

Post by dpifke »

nlh wrote: post #14

This is only tangentially-related, but I know I'm asking the right audience: I switched, blissfully, away from Quicken/Quickbook/Xero/all that heavy crap to very simple and elegant textfile-based accounting (ledger/hledger) and it's been the best and most flexible accounting experience I've ever had. I finally feel completely in control of my companies' books. Is there an equivalently-blissful tax-filing software/ser…

With Beancount, I use metadata tags in my chart of accounts for the tax form and line number, e.g.

  2017-01-01 open Expenses:GA:Insurance USD
    tax_form: "1040 Schedule C"
    tax_line: "15"
    tax_description: "Insurance (other than health)"
I can then report my transactions based on the tax_form and tax_line attribute, which gets me much of the way there. I still have to do the math on derived lines on the forms, but this at least makes sure the inputs are gathered correctly.

Being able to write comments is also super-useful. A real life example:

  ; We can make a "Section 1.263(a)-1(f) de minimis safe harbor election" to
  ; treat repairs and improvements to tangible property as an expense, which
  ; would otherwise have to be capitalized.  A statement that we are making the
  ; election must be attached to our tax return and should include name, address,
  ; and Taxpayer Identification Number.  Under the election, we must apply the de
  ; minimis safe harbor to all expenditures meeting the criteria for the election
  ; in the taxable year.  The limit is $2,500 per invoice.
  ;
  ; https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations
  2016-01-01 open Expenses:RD:Hosting:Repairs:DeMinimis USD
    tax_form: "1040 Schedule C (R&E)"
    tax_line: "21"
    tax_description: "Repairs and maintenance"
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