4 ms·
> Filing status and dependent information is a small fraction of the information content of a tax return, so having you file just that would itself be simpler t
by hundt 8y ago
> Filing status and dependent information is a small fraction of the information content of a tax return, so having you file just that would itself be simpler than asking you to file a tax return
True, although that was just one example. Another example is the credit for education expenses. Here are the requirements for the American Opportunity Credit, the best one:
* Be pursuing a degree or other recognized education credential
* Be enrolled at least half time for at least one academic period beginning in the tax year
* Not have finished the first four years of higher education at the beginning of the tax year
* Not have claimed the AOTC or the former Hope credit for more than four tax years
* Not have a felony drug conviction at the end of the tax year
The IRS + the schools could theoretically figure out only three of those five requirements. I guess four if all states reported felony convictions to the IRS.
If you don't meet those requirements, there is another one available with different rules for which expenses qualify.
This is not an uncommon tax situation! I helped a lot of lower/middle-class taxpayers prepare their returns through a free IRS service a few years ago, and this came up all the time.
> once you've filed it once, they could prepopulate it and require updated filings of that information only if changes occurred
But changes occur all the time. So the information would not be accurate for long, and you have no way of knowing when it has become wrong. In the case of the education credits, a common occurrence is that the student ceases to be a dependent of the parent (an issue which depends on how much support the parent gives the child, something the IRS has no way of knowing), meaning who is entitled to the credits changes.
Even for simpler things, like which of your children qualify for the child tax credit, changes are not extremely rare.
It's not that hard to guess when changes might have happened based on additional information. But this basically requires the IRS to reimplement TurboTax, or at least a crappy version of it that kicks people out of scope whenever things are not trivial. Without those types of inquiries I think the confidence that a given return is correct would be extremely low, absent a serious simplification of the tax code.
Edit in response to your edit:
> Something “like TurboTax” that also precompleted information that was tied to forms that are already filed directly by third parties with the IRS would be essentially equivalent to pre-filled forms for a very large number of filers.
Yeah, that would be awesome! I definitely agree that a "TurboTax lite" that was synced with the government info and allowed you to click through a bunch of screens confirming various things would be a pretty good experience. Although I actually think the real TurboTax is pretty close to this for simple situations, because they can import your information from major payroll providers, brokerages, etc.