4 ms·
the deep cynicism here is how people think Turbo tax is doing a pubic service by making taxes easier and cheaper, that's how effective their marketing is. Convi
by elberto34 10y ago
the deep cynicism here is how people think Turbo tax is doing a pubic service by making taxes easier and cheaper, that's how effective their marketing is. Convince the public there is a problem that only said company can solve.
- bluedino 10y agoPaying TurboTax $59.99 is cheaper than going to H&R Block and paying a tax preparer $169
- texuf 10y agoThe IRS already knows what taxes you owe. In most cases they could just send you a bill.
- bluedino 10y agoYour state and local government would also have to send you a bill.
- tormeh 10y agoYeah, if they can check if I've paid the correct taxes then they know how much I should pay. Can't they just tell me?
- sokoloff 10y agoNo. How would they know how many charitable donations you made? How would they know how many miles you drove for your business? How would they know how much you spent on travel for your company? How would they know how much you paid for the raw materials for the products you sold? Or your business utilities, rent, etc? How would they know your unreimbursed medical expenses or casualty losses?
- bluejekyll 10y agoThe issue here is that taxes have been over complicated with deductions. If it was just simply based off earnings and there were no deductions it would be simple. Obviously taxes would need to be reduced if all deductions were removed. I for one would love to see a zero deduction tax law, and simple validation of earnings.
- sokoloff 10y agoI think you're still stuck on W-2 employees (which is a pretty large and common case, I admit, and I'd love to see that simplified). You will always need accounting for businesses (IMO). Suppose you ran a lemonade stand. You bought some equipment, some raw materials, you used some utilities, you used some space, you bought a banner and some flyers to advertise your stand, you hired a lawyer to help set it up, you bought a business license, you bought cups and napkins, you took in some receipts. Let's presume you turned a profit. On what figure should you pay taxes? The gross receipts (every dollar you took in)? Or just the profit (receipts minus expenses)? And that's just a lemonade stand; imagine the complexity of a larger scale business...
- bluejekyll 10y agoSure. Let's focus on the individual return first. In terms of businesses, I hold somewhat controversial belief that businesses should not be taxed. Their employees are taxed, and people recieving dividends are taxed. By not taxing businesses, we'd also balance out the unfairness in the system today, where large companies are able to offset all profits with deductions, and small companies which actually pay quite a bit. The point is to bring fairness to the tax system.
- rmah 10y agoThat would only be reasonable if you think that only poor and middle-income people should pay taxes. Everyone else would be able to opt out via a series of corporate shells.
- nodesocket 10y agoOnly true if you have a simple standard w-2 job. With stocks, capital gains, dividends, write-offs, company you need to handle these manually and the government doesn't know your write-offs and all sources of income.
- ceejayoz 10y agoCapital gains and dividends get reported to the IRS. If nothing else, the IRS could say "here's the info we have, feel free to review and add anything we don't know about".
- sokoloff 10y agoFor a W-2 employee taking the standard deduction, perhaps. The IRS cannot correctly calculate what the typical small business owner owes, what the typical real estate investor owes, what the typical upper middle class family owes, because they don't have all the information available to them.
- 67726e 10y agoWhat's your point? They can help all the typical cases. If you need additional help, then you can find an accountant to help.
- sokoloff 10y agoMy point is that "The IRS already knows what taxes you owe." is patently false in the vast majority of cases. In 2012 (the last year for which I have a breakdown: https://www.irs.gov/pub/irs-soi/12rswinbulreturnfilings.pdf https://www.irs.gov/pub/irs-soi/12rswinbulreturnfilings.pdf ), of the 239 million returns filed, about 143 million are individual returns. Of the 143 million individual returns, about 13% or 18.6 million use 1040EZ ( http://www.freeby50.com/2012/12/what-percent-of-people-file-1040-1040a.html http://www.freeby50.com/2012/12/what-percent-of-people-file-... ). The IRS probably has enough information to file 1040EZs for most people, but certainly not enough for 1040A, 1040, or most business returns. So, of the 293 million returns filed, about 18.6 million or 6.3% of them could be auto-filed by the IRS. About 1 in 16 total returns and about 1 in 8 personal returns. To me, 6.3% (or even 13%) is a far cry from "all the typical cases". They can mostly handle one particular case; that might be the case that you personally have; I have no objection to them offering that as a service. Just don't be confused and think that that that's all the typical cases.
- smsm42 10y agoGreat analysis. One thing to add though - some of these people have to also file state returns. Which in TurboTax pretty much automatic, but without it it'd be separate return which has to be filed separately - which means same work as for Federal, so people would still need something like TurboTax - unless also each state that has income tax makes their own system too.
- seanmcdirmid 10y agoFor the last 9 years, I've been filing tax returns on money I've earned abroad: no 1099 and definitely no W2. One year somehow they blew away my foreign tax credit and said I owed $30K (note: they were really nice about it and I eventually was able to fix the mistake). Taxes get complicated REALLY quickly as you move beyond single W2 earnings.
- nodesocket 10y agoOr $650 which was my fee from H&R last year for one hour of service. (I own a California LLC) Anybody know a good alternative? I'm thinking about trying TurboTax Self-Employed for $89.99.
- Washuu 10y agoHR Block's online filing system is pretty good. I have used it every year since 2005. I only started recently in the past few years paying for the upgraded services(about $50) due to mortgages and other income.
- nodesocket 10y agoAre you using the self-employed version? I need itemized deductions including rent.
- cowsandmilk 10y agoI ended up on the self-employed version due to my side hustle. I'm pretty sure this was included there. You don't have to pay until you file, so you can poke around for free and see if it includes everything you believe you need.
- edoceo 10y agoThat's a good price. My accountant bill is like $3k/yr. 4 companies+equity, moderately complex personal.
- lifeformed 10y agoI use TurboTax Self-Employed and it works pretty well for me. It handles everything I can think of for my 2 LLCs. It takes some time though. If you have all your expenses already worked out, then it's not too bad.
- nodesocket 10y agoThanks, I think I'll give Self-Employed a try.
- nilved 10y agoOf course, you shouldn't need to pay anything. That is a false dichotomy. The way tax returns are done is deliberately abusive to citizens. They'll chase you down if you owe them money, but not if they owe you. In that case you need to jump through flaming hoops every year to appease them. It's not a coincidence.
- bluedino 10y agoThe beauty is you don't. If you go to HR's website they basically say "click here to file for free!", and "click here to make an appointment at your nearest office"
- beezle 10y agoNot entirely true. I have received money back on taxes that I filed with an error that resulted in my overpayment. So in a simple case, yes they will return money they owe you. But I would not expect them to file an optimized return on your behalf and you probably already know if you should be doing this yourself.
- metaphor 10y ago> But I would not expect them to file an optimized return on your behalf and you probably already know if you should be doing this yourself. Playing devil's advocate, why not? They all claim to maximize your tax return, and TurboTax specifically claims no tax knowledge needed too.
- sokoloff 10y agoTurboTax claims no knowledge of the tax law is needed. Knowledge of your personal circumstances is required and TurboTax's interview process guides you through extracting that information. Charitable donations (to take a straight "optimized return" angle). How much did you give? Did you receive anything of value in return? Intuit (TurboTax) doesn't know that info. H&R Block doesn't. The IRS doesn't. CreditKarma doesn't. You do.
- c3534l 10y agoH&R Block is a ripoff. Get yourself a real accountant. Or do your taxes yourself (it's really not difficult).
- cmurf 10y agoIt takes a lot more time with Turbotax than H&R Block or even just handing stuff over to a regular accountant who does tax preparation. The obscenity of paying $1000 for small business tax preparation was not moderated by the even more obscene alternative of spending four days with TurboTax (or any other software for that matter). But at least TaxAct is a small company that's been around for about as long as TurboTax and I think their business model is far more ethical than Intuit, who are doing the absolute worst thing by basically legally bribing elected officials to keep tax preparation complicated enough that they are a going concern.