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This appears to be about people who filed taxes through Credit Karma, not normal users. You need to file your taxes somewhere, and Credit Karma is probably the

by chc 9y ago

This appears to be about people who filed taxes through Credit Karma, not normal users. You need to file your taxes somewhere, and Credit Karma is probably the best free option available.

jobigoud 9y ago
This makes me realize I don't know how the American system works. You file your taxes to private companies? Then they send it to the IRS? You can't just fill a form, online or on paper, and send it to the administration yourself?
- dragonwriter 9y ago
  > You can't just fill a form, online or on paper, and send it to the administration yourself? Yes, you can. There are both paper and fillable electronic forms (and, for simple cases with incomes under $66,000, tax prep software) available free from the government, and you can file them for free, by mail or electronically, as appropriate, with the IRS.
  - chc 9y ago
    But of course the IRS probably isn't the only entity to which you owe taxes (states and the federal government are separate entities), so the IRS's forms only get you part of the way. What services like Credit Karma do is let you input your W-2 forms or similar (which indicate taxes paid), ask you questions to determine any adjustments you might need/want to make, generate the correct forms to send to the IRS and your state tax agency, and transfer the money you owe from your bank account. Doing all that by hand is quite a bit more work.
- cosmie 9y ago
  As someone else mentioned, you are fully able to submit federal tax returns directly to the IRS. The issue comes in with knowing which forms your situation warrants, which variants of those forms are most appropriate for your situation, whether or not your situation is eligible for favorable exemptions or credits for certain taxes, etc. The US tax code is dazzlingly situationally dependent; the same set of basic financial reporting data the IRS receives can result in wildly different interpretations of tax liability depending on the personal situation of the individual. And the tax preparation companies market based around their ability to understand all of the adjustments and how to interpret them as broadly as legally allowable and be able to minimize your tax liability better than the other one. If you have a super standard situation, you don't get much benefit from using these services except ensuring that you checked off all the right boxes. And in fact, most of them offer a free service tier, with the goal of hoping they identify something about your situation in the process that would warrant "upgrading" you to a paid tier to save money on your taxes. CreditKarma offered free filing services this year, because they monetize not on the tax service itself but on the incredibly detailed and reliable knowledge of your financial situation which enhances their ability to sell you as a lead to financial companies (their core business). Individual states may or may not have their own income tax you owe, which then follows the exact same process but with a completely different set of tax laws to adhere to. It's a super messed up system, but the companies that own the tax preparation softwares (Inuit and H&R Block) pay incredible amounts of money in lobbying our representatives to prevent the tax policy from getting streamlined or funding IRS projects to provide public, free resources to allow individuals to better self-service. Both of which are existential threats to their business model and they allocate enough of their revenue to efforts that ensure the threat gets contained.

by chc 9y ago

This appears to be about people who filed taxes through Credit Karma, not normal users. You need to file your taxes somewhere, and Credit Karma is probably the best free option available.

jobigoud 9y ago

This makes me realize I don't know how the American system works. You file your taxes to private companies? Then they send it to the IRS? You can't just fill a form, online or on paper, and send it to the administration yourself?

dragonwriter 9y ago
> You can't just fill a form, online or on paper, and send it to the administration yourself? Yes, you can. There are both paper and fillable electronic forms (and, for simple cases with incomes under $66,000, tax prep software) available free from the government, and you can file them for free, by mail or electronically, as appropriate, with the IRS.
- chc 9y ago
  But of course the IRS probably isn't the only entity to which you owe taxes (states and the federal government are separate entities), so the IRS's forms only get you part of the way. What services like Credit Karma do is let you input your W-2 forms or similar (which indicate taxes paid), ask you questions to determine any adjustments you might need/want to make, generate the correct forms to send to the IRS and your state tax agency, and transfer the money you owe from your bank account. Doing all that by hand is quite a bit more work.
cosmie 9y ago
As someone else mentioned, you are fully able to submit federal tax returns directly to the IRS. The issue comes in with knowing which forms your situation warrants, which variants of those forms are most appropriate for your situation, whether or not your situation is eligible for favorable exemptions or credits for certain taxes, etc. The US tax code is dazzlingly situationally dependent; the same set of basic financial reporting data the IRS receives can result in wildly different interpretations of tax liability depending on the personal situation of the individual. And the tax preparation companies market based around their ability to understand all of the adjustments and how to interpret them as broadly as legally allowable and be able to minimize your tax liability better than the other one. If you have a super standard situation, you don't get much benefit from using these services except ensuring that you checked off all the right boxes. And in fact, most of them offer a free service tier, with the goal of hoping they identify something about your situation in the process that would warrant "upgrading" you to a paid tier to save money on your taxes. CreditKarma offered free filing services this year, because they monetize not on the tax service itself but on the incredibly detailed and reliable knowledge of your financial situation which enhances their ability to sell you as a lead to financial companies (their core business). Individual states may or may not have their own income tax you owe, which then follows the exact same process but with a completely different set of tax laws to adhere to. It's a super messed up system, but the companies that own the tax preparation softwares (Inuit and H&R Block) pay incredible amounts of money in lobbying our representatives to prevent the tax policy from getting streamlined or funding IRS projects to provide public, free resources to allow individuals to better self-service. Both of which are existential threats to their business model and they allocate enough of their revenue to efforts that ensure the threat gets contained.