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IRS tests free e-filing system that could compete with tax prep giants

washingtonpost.com

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Re: IRS tests free e-filing system that could compete with tax prep giants

#91

Post by anonymouskimmer »

kristopolous wrote: post #25
jandrese wrote: post #16

For what it is worth, even with my medium-complex tax return I have had great results with freetaxusa.com for the past few years. The first couple of times we used it we ran the taxes through TurboTax and FreeTax at the same time and due to better UI the FreeTax version was faster and less confusing. That said, at the end of the process after entering all of the same information in the same places the TurboTax one di…

I go with them too. Everytime this comes up though I post this https://apps.irs.gov/app/freeFile/browse-all-offers/ There's many nice and cheap options out there. Please, if you value basic democracy, don't give money to Intuit or TurboTax - not a dollar, not a penny. But do click on their paid ads whenever you see them and just close out after the page load. That company needs to be dismantled brick by brick, byte b…

I did OLT again this year. Due in part to how many click throughs they require if you aren't paying or doing state taxes through them, and due in part to significant personal distractions this year, I didn't notice that I actually hadn't filed until after April 17th, despite finishing everything but the final click-throughs in early February.

Fortunately I'm owed so shouldn't be paying any penalties for filing late. But it's still annoying.

I'm looking forward to an IRS free file system that won't require 5+ click-throughs to submit.

Re: IRS tests free e-filing system that could compete with tax prep giants

#92

Post by elicash »

linuxftw wrote: post #43

The IRS has no incentive to make sure you get all the deductions you're allowed. They don't have incentives to make sure the software works well under load and at scale. Whatever they put out will likely be half-baked, and the software will degrade rapidly because the tax laws change each year. I suspect, that given the currently complexity of the tax system itself (rather than the filing, which seems to be pretty st…

This likely will depend on the administration. With the ACA, for example, you see Democratic administrations try to get more people to take part in receiving subsidies and GOP administrations not wanting to put additional resources towards advertising them. (Not trying to get into a debate here on whether that's good/bad.)

In this case with the IRS program, the WaPo article even notes about the Biden administration wanting to "better serve low- and middle-income Americans entitled to a bevy of credits." As in, they want to make sure folks get all the deductions (and other benefits) they're allowed.

Edit: Let me also add that many people use paper forms because it's free (or other reasons). There has always been a publicly-funded version of a way to pay your taxes. But because it's paper, it's been very expensive for the government to administer. This also incentivizes the IRS to keep this system updated each year.

Re: IRS tests free e-filing system that could compete with tax prep giants

#94

Post by CodeWriter23 »

You all are so cute thinking the government is going to perform this function when in reality they are simply going to choose a third party to outsource to.

Probably without even giving Intuit a chance to bid on it. Not that I like Intuit, they suck IMO. But I do think a vendor selection process such as this should be an open one. Instead we will have more back room-brokered graft.

Re: IRS tests free e-filing system that could compete with tax prep giants

#95

Post by gowld »

alfalfasprout wrote: post #83

The software is nice and all... but the real problem is that the tax code is just way too complex. If you have properties, RSU income, other investment income, W2 income, and have to deal with multiple states you can have three different CPAs come up with three different numbers. At the end of the day, if you're a billionaire earned income is a teeny tiny part of your earnings and most of it is kept unrealized for ta…

Paying 50% is a complaint about the tax rate, not complexity.

Billionaires not paying tax on unearned gains is a complaint about the tax policy and its basis in $ not assets, not complexity.

Doctors and Software Engineers earning >$500K/yr and paying 50% of it in tax proves that social mobility is quite enabled.

Re: IRS tests free e-filing system that could compete with tax prep giants

#96

Post by lotsofpulp »

jrochkind1 wrote: post #85
cstoner wrote: post #74

Earlier quoted context omitted.

The vast majority of people take the standard deduction, so offering a "here's what we think you owe, but if you disagree feel free to do the full return" form would be a huge efficiency gain. Your comment seems like a prime case of perfect being the enemy of good.

> The vast majority of people take the standard deduction Unless they are a homeowner, probably. Part of the issue is that the US tax code is a lot more complex than most countries. (And the homeowner-targetted deductions are kind of insane and bad policy too). Still, I don't disagree with the basic premise. They probably know enough to know if itemizing your homeowner-related things would be better for you, and do i…

90% of federal tax filers in the US do not itemize, which includes the majority of home owners.

Re: IRS tests free e-filing system that could compete with tax prep giants

#97

Post by elicash »

CodeWriter23 wrote: post #94

You all are so cute thinking the government is going to perform this function when in reality they are simply going to choose a third party to outsource to. Probably without even giving Intuit a chance to bid on it. Not that I like Intuit, they suck IMO. But I do think a vendor selection process such as this should be an open one. Instead we will have more back room-brokered graft.

That might be true later! But so far: "The system was developed by the IRS and U.S. Digital Service, the White House’s technology consulting agency."

You can learn more about the U.S. Digital Service here: https://www.usds.gov/mission

Re: IRS tests free e-filing system that could compete with tax prep giants

#98

Post by d--b »

RajT88 wrote: post #70
_yb2s wrote: post #51

Earlier quoted context omitted.

The weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it…

In fact, other sane industrialized nations have really got it figured out: https://www.pbs.org/newshour/show/dreading-taxes-countries-s...

Not all though. I developed admin-phobia since I moved back to France. Being a contractor here is such a FUCKING nightmare compared to UK and US. Sure the US could do without turbotax. BUT AT LEAST YOU GUYS HAVE TURBOTAX

Re: IRS tests free e-filing system that could compete with tax prep giants

#99

Post by gowld »

junar wrote: post #44
brocklobsta wrote: post #15

What I don't understand about these programs is the added income clause. In California the state provides a free tool to file state income taxes (CalFile), but you can't use it if you make over $230,000 a year. Does it really make sense? It's similar with the federal free file program I believe. You would think they would want to encourage high income citizens to use their tool so they can control the deductions/cred…

If you're curious why, it's because of the California itemized deduction phase-out, line 29 in the instructions below [1]. CalFile only cares about handling "simple" items. Other notable exclusions [2] are capital gains, health savings accounts, Schedule C, Schedule E, and Roth IRA conversions and distributions. [1] https://www.ftb.ca.gov/forms/2022/2022-540-ca-instructions.h... [2] https://www.ftb.ca.gov/file/ways-t…

What if I earn >$229,908 but don't want to itemize? (or "do"; that web page is unreadable)

Re: IRS tests free e-filing system that could compete with tax prep giants

#100

Post by tivert »

lotsofpulp wrote: post #96
jrochkind1 wrote: post #85

Earlier quoted context omitted.

> The vast majority of people take the standard deduction Unless they are a homeowner, probably. Part of the issue is that the US tax code is a lot more complex than most countries. (And the homeowner-targetted deductions are kind of insane and bad policy too). Still, I don't disagree with the basic premise. They probably know enough to know if itemizing your homeowner-related things would be better for you, and do i…

90% of federal tax filers in the US do not itemize, which includes the majority of home owners.

> 90% of federal tax filers in the US do not itemize, which includes the majority of home owners.

Isn't that a relatively recent thing? IIRC, the standard deduction was massively increased a few years ago.

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