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H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017)
- gigatexal 8y agoIn Germany this year a law passed that while a bit vague mandates all banks by the end of this year provide an external API to at least their current accounts (checking accounts). This is PSD2. Imagine if the same could be done in the states and the reaction of banks: I doubt American banks would like to become dumb pipes to allow fintech firms to build value on top of them. I see these tax preparers no different. And I hope one day a truly simple and free tax return process actually takes hold.
- icebraining 8y agoTo clarify for those who aren't aware: PSD2 is EU-wide, not just in Germany; all member-states should have such laws by now.
- dmitriid 8y agoBecause of PSD2 some banks in Europe are finally investing in their own apps, analytics etc. to create more value for customer, or invest in third-party apps like Tink. But yeah, in the US it would cause an uproar.
- elektor 8y agoAre there any good resources for filing your own taxes? I’ve always relied on family members and want to take a crack at it.
- deleted 8y ago[deleted]
- pascalxus 8y agoWell, it's good that your doing your homework on it first. Because, once you start using one, the cost of switching rises a bit because each year, they have youre last years info which comes in handy quite a bit: they can pre-fill out some of your stuff like addresses, employers, name, ssn, etc. Also, look for one that doesn't raise your rate once you start using it for a few years: some of them do that.
- sergers 8y agoDepends where you live. In Canada there are free options to file your taxes, and ability to pull in last year/ current info if signing into your CRA account. I used to use studiotax, but last year started using simpletax. Essentially I sign in, and then sign into my cra account, it has all my info prepoluated. I don't understand why the govt cant just file my taxes for me when they already have the info
- smkellat 8y agoSimply put, the IRS doesn't have the data access Hollywood makes it look like they have. There are timeframes for the Combined Annual Wage Reporting joint task force to have the data trickle downstream from SSA to IRS. It isn't immediately available to them which is why there is the so-called "PATH Act hold" that stops any returns claiming EITC or Additional Child Tax Credit from refunding out before February 15th each year now so at least some data is on-hand. As long as some payers & employers can still file income reporting forms on paper, they have an awfully long time after April 15th to get those documents in to IRS too.
- anoncoward111 8y agoHave done MA's (now-defunct) free e-file and NY state's paper form. Don't do it, it's a massive waste of time and energy and the chance for human error is massive. I only did mine because Oracle and ADP issued me a completely incorrect W2 and TurboTax doesn't let you submit it with incorrect wages reported. Luckily though I got all my money back in like 2 months
- Cyph0n 8y agoFYI, Credit Karma is providing free online tax filing regardless of your income. In general, I think online tools become worth their cost when you are claiming mutliple deductions and have income from various sources across more than one state. Otherwise, the 1040EZ is where you should start.
- aeonsky 8y agoI don’t believe the 1040EZ exists anymore.
- haneefmubarak 8y agoCorrect. The 1040 has been redesigned to be as easy to fill out as the prior 1040EZ, IMHO.
- idunno246 8y agojust remember that credit karma makes all it's money from selling you credit cards... so by using them to fill out your taxes you give them all the info on your income info to further "personalize" these ads
- Cyph0n 8y agoAre you certain that Intuit and others aren’t doing the same thing? That is, using your data to gain insights?
- gst 8y agoAfter logging in to TurboTax (for the first time in a tax year) it asks you if it can share your data with its parent company (Intuit). Declining works and doesn't have any impact on TurboTax. However, based on how the UI for that looks like it might not be obvious for some people that data-sharing is optional.
- gst 8y agoMore personalized ads seem to be a win-win situation. If I'm already seeing credit card ads I'd like to at least see ones that are relevant for me.
- brownbat 8y agoThere is an open source project: http://opentaxsolver.sourceforge.net/ http://opentaxsolver.sourceforge.net/ Just noting it, not advising or recommending anything -- whether this is wise or not definitely depends on your own particular situation.
- aynawn 8y agoThat's cool because the author has also updated it for the 2018 tax year. From their YouTube video it looks like it needs polishing from an aesthetic perspective but if it does the job and cuts out the middle man then it's good. I'll have to try it out this year. A much better job would be an open source modern website that is updated by the community and supports both federal and state taxes, importing tax documents, and highly secure to ensure a strong middle finger to these overbearing companies.
- aynawn 8y agoCorrection, it has been updated last for the 2017 tax year. His website says that by the end of Jan 2019 it will be updated for the 2018 tax year.
- freddie_mercury 8y agoJust read the IRS instructions that come with the forms. I do my taxes by hand and don't find the instructions especially complicated or hard to read.
- astura 8y agoJust fill out form 1040, the IRS provides instruction booklet on how to fill it out. Both the form and the instructions are available on their website. Then use software (I reccomend taxhawk, don't overpay for turbotax) and compare the 1040 they generated with your manual 1040. If they match, great. If not, figure out why.
- piyush_soni 8y agoI always thought that's the case, because there's absolutely no reason it has to be that complicated, or for them (goverment) not to do what companies like TurboTax do themselves.
- downrightmike 8y agoThe IRS is already doing your taxes in the first place. That is how they know when you didn't include a job etc. They run the numbers to check against. There is no reason that this can't be the default for 95% of citizens. Want to amend the numbers the IRS came up with? Just file your own taxes that year.
- piyush_soni 8y agoThat's exactly what I have been telling my friends for so long! They already have all of my income and expenditure details. Why don't they just fill it themselves and let me one click approve?
- smkellat 8y agoActually, you'd be surprised how little of your life's information is on-hand compared to the eligibility requirements for certain tax credits and benefits. The biggest example is deduction of gambling losses. IRS knows how much you've won (receipt of Form W-2G) but unless you give it an accounting of how much you've lost it has no clue at all.
- xyzzy123 8y agoThere's an argument that: If the IRS does not show all it's cards up front, people might disclose additional income the IRS were not aware of. If you think of filing taxes like a negotiation, there's benefit to "not being the first to name a number". With that said, I am absolutely "pro" automatic filing.
- labster 8y agoI doubt that the "pro" argument is worth the lost economic productivity of taxpayers, or the time spent double-checking the average citizen's math. In public policy you should always be aware that you are not optimizing for rule compliance alone. You optimize for the healthiest society, which typically contains a small amount of cheating. Random tax audits of the middle class probably don't make enough income to justify their existence-- but they scare enough people into compliance.
- dTal 8y agoA textbook example of the "Shirky Principle", to wit: Institutions will try to preserve the problem to which they are the solution.
- datavirtue 8y agoSusan G. Komen for the cure. Prevention is so boring.
- bluejekyll 8y agoThis is a great example of why the way in which politicians raise money and how they are lobbied is corruptive. This is a case where quite easily 80% of their constituency would applaud the change. But a minor set of companies with an ability to contribute large sums of money (for or against) is able to influence something like this passing. Citizens United and similar SCOTUS cases have made it even that much more unlikely that the situation will be improved any time soon.
- temp231239 8y agoI have seem this happening in many areas - GMO and ISP squashing well-fare schemes for farmers and internet users. If only news agencies did proper job highlighting these issues, companies wouldn't date to indulge in acts like these.
- aaronbrethorst 8y agoIf your elected officials refuse to accept corporate PAC money, thank them. If your elected officials accept corporate PAC money, tell them to cut it out because you'll be supporting a primary challenger who refuses all corporate PAC donations...and then support a primary challenger who refuses all corporate PAC donations. Having elected officials who reject all corporate PAC money isn't a panacea all on its own, but it's a great start.
- jimktrains2 8y agoHow would a candidate accept pac money since they're currently bared from doing so or (overtly) coordinating.
- aaronbrethorst 8y agoCandidates accept PAC money all the time. It has nothing to do with coordinating. These are donations to a campaign. Here's a list: https://www.opensecrets.org/political-action-committees-pacs/top-recipients?cycle=2018&type=B https://www.opensecrets.org/political-action-committees-pacs... See how Kevin McCarthy, House Minority Leader, raked in almost $8mm in the last election cycle? That's because he'd have been Speaker if Republicans had held the House. Those $8mm in donations would've bought companies like Goldman Sachs, MetLife, Altria, and others plenty of phone calls with McCarthy. https://www.opensecrets.org/members-of-congress/contributors?cid=N00028152&cycle=2018 https://www.opensecrets.org/members-of-congress/contributors...
- crisdux 8y agoPosts like this come around every year. There is a belief held by some that we should avoid making taxes easier to file. We shouldn't just take the number given to us by our government. Some believe filing a tax return should be an explicit process so we are conscious of government burden. Also, a more practical reason. The government can't tell you all of the deductions you are entitled to.
- maxxxxx 8y agoThe whole reasoning behind not prefilling makes no sense. The government tells you what it knows and you can then amned the return in whatever way you wish, e.g. deductions. There really is nothing negative for the tax payer as far as I can tell.
- sokoloff 8y agoMy experience is that the IRS doesn’t have all of your data ready by April 15th. My tax guy requests a transcript of my account every year and the data is woefully incomplete in mid-April. Tends to be complete by mid-August. I have no idea what the delay is.
- perl4ever 8y agoAs I just posted elsewhere, having a form prefilled would be a negative if the taxpayer is liable for mistakes, as is the current US system. I would like to know if, in countries where taxes are simpler, the government takes responsibility for its own mistakes. I mean, if the pre-filled return were grossly wrong, and the IRS changed its mind later and wanted more money, that would be tolerable. But it would not be tolerable to treat it as evasion or negligence to file what they provide me. I am wondering how it works in other countries now.
- BeetleB 8y ago>The whole reasoning behind not prefilling makes no sense. While I don't support the reasoning in the GP, it does make sense, and in my experience, is largely true. Many people I interact with (coworkers, etc) have very little understanding of the tax system - precisely because they don't do their own taxes (they either pay a very expensive person, or use something like TurboTax). If the government gave them a prefilled form, I fully expect that most people will not understand taxes. The reason I don't put much weight in the argument is that their feared scenario is already the current reality. Right now there is a burden to do taxes, and yet most people still have almost no understanding of it. They just pay someone to do it for them.
- Meekro 8y agoThe article doesn't show evidence that the lobbying was effective. The tax prep industry wanted the Free File Act passed to prohibit the IRS from implementing automatic tax filing. Senator Warren introduced a bill to require the IRS to make automatic tax filing available. "Neither Warren’s bill [the good act] nor the Free File Act [the evil act] made it out of committee." Sounds more like the do-nothing Congress at work.
- paul7986 8y agoThanks for pointing this out. I have used Turbo Tax for the last five years or so and won't be using them anymore. Each year either the state or federal come back to me saying I didnt pay what I fully owed them. Now with a pre-filled return from the fed I'd know. Hopefully more TurboTax customers hear of this and boycott them as well!
- briandear 8y agoTurbotax is awesome and I have never had the government come back and say I owe more. If that’s happening to you, you clearly aren’t doing your taxes correctly.
- cristianMD 8y agoI had the same problem. never using turbotax again
- deanmoriarty 8y agoSame comment I posted above: did you ever track down the cause of the mismatch?
- paul7986 8y agoAnswering here... I used Snaptax each year it was offered/promoted in the app. That failed me and I had to pay back taxes. The last year or two I just followed their arduous step by step process in filing. That also failed me and I had to pay back taxes. Now I see this.. the most efficient and best way US taxes could be filed yet moneybags is holding us back from the most innovative/efficient system for filing. If the fed and state sent me my return saying I owe X... ok here’s that money and I’m done til next year. No surprise IRS letters saying I owe back taxes.
- deanmoriarty 8y agoIf I were to receive communication from the IRS saying that I owe extra taxes, I would compare my 1040 line by line until I can exactly track where I forgot to include the amount the IRS is asking. You are painting it as if they were black box calculations: they are not, especially for "traditional" tax situations it's very feasible to follow the forms (automatically filled by turbotax) and understand where your return differs. That being said, I agree with you that it would be nice if we were directly "billed" by the IRS, but what I wanted to understand from you, and reason of my question, was __exactly__ where TurboTax failed (e.g. exact line of the form or "Oh, I forgot to include a 1099INT via SnapTax that was reported to the IRS"), to get a better perspective of the specific issue. I've been using TurboTax for 10 years with a fairly elaborate tax situation (W2, multiple 1099INT, multiple 1099B, AMT tax for startup equity, AMT credits, backdoor Roth IRA, ...) and I've always been able to get the number right to the point that I never received any further bills from IRS (though I might get audited in the future, obviously).
- grovernorquista 8y agoThere's another bad-faith actor in this fight to make you burn your time preparing tedious tax bullshit for your personal taxes. It's Grover Norquist: https://www.huffingtonpost.com/grover-norquist/grover-norquist-taxes_b_3005698.html https://www.huffingtonpost.com/grover-norquist/grover-norqui... To give these folks something they don't deserve (an assumption of good faith, non-cynicism, benefit of the doubt, etc): they think "letting" the IRS do folks' taxes will lead to more taxes and poor, defenseless taxpayers simply won't have the courage to challenge a "bill" from the IRS. Simple fix: let folks contest whatever final "pay this number and you're done" amount they get invoiced for & sear that into federal law. But you probably won't ever hear Grover and all the other looney tunes ever mention that. They don't want easy, hassle-free IRS filing. It's an opportunity for people to be pissed (who wants to pay money for the government) There's also talk about your taxes fitting on a postcard and that, as usual from the scumbags nominally in charge of our country, is bullshit too because it just conceals a ton of paperwork (source: https://www.accountingtoday.com/opinion/the-postcard-tax-return-a-simple-solution https://www.accountingtoday.com/opinion/the-postcard-tax-ret...)
- kevin_thibedeau 8y agoThe IRS is working off of incomplete information about your income and eligibility for deductions. There is no way they can fill out a form under the current tax regime.
- everdev 8y agoIf you have a W-2 and no other income/expenses they can get pretty close. The idea of simple taxes almost always includes the ability to still do them in detail if you'd like. The idea is that the government would send you a bill (or a refund) and you can pay it (or accept it) and be done or reject it and do your own taxes like you currently do.
- rayiner 8y ago30% of people choose to itemize, mainly people who own real property. And out of those who don’t, many still can claim credits for child care expenses, health care expenses, and education expenses. If the default bill sent by the IRS wouldn’t include all those things, then the result would be exactly what the Norquists of the world fear: a de facto tax increase. Note also that the H&R Block/Intuit software are free for 70% households. The remaining households are the higher income ones that would most likely itemize anyway.
- shmerl 8y agoIntuit is really corrupt. Use someone else if for tax filing. There are better alternatives.
- gst 8y agoWhat are the better alternatives? Last year I tried out all the major offerings, and TurboTax was the only one that worked without any issues. TaxAct didn't even manage to fix their broken electronic import of broker data until some point in March or April.
- shmerl 8y agoI've used TaxAct, and didn't have any issues with import.
- gst 8y agoThey fixed the import in March or April. I tried importing earlier and just got the error message that the import functionality is not available yet. Here's a thread about that issue: https://www.bogleheads.org/forum/viewtopic.php?t=210511 https://www.bogleheads.org/forum/viewtopic.php?t=210511 I understand that I could have waited a little bit longer with filing my taxes. But the fact that key functionality is missing from a product doesn't give a lot of confidence in that they have enough resources to handle their job. The only feature from TaxAct that I'm missing from the online version of TurboTax is attaching PDF files for transactions. With TaxAct I can report aggregated transaction data and just attach the PDF from my broker which is then automatically included with the efiled return. With TurboTax that's not possible yet and I'd need either list transactions individually (which is easy due to electronic import) or send the itemized broker statement by mail.
- kwhitefoot 8y agoIs there any other country that makes taxation so painful for ordinary employees? Her, Norway, and in the UK, most people never have to fill in anything.
- kerng 8y agoI wish this would get a lot more attention. The world could be rather simple, majority of people would just be happy with a straight forward process. What annoys me is not the money I have to spend on filing taxes nor to pay my fair share, but the actual time I waste every year doing so.
- justapassenger 8y agoThis so much. I’m fine with taxes (I benefited a lot from services provided by them, when I needed). But the whole process is made complex for no good reason. I want to show to government all my money, have them tell me what I owe, and if I don’t agree, have an appeal process.
- hueving 8y agoThe problem usually isn't the knowing how much you made bit. It's the knowing how much you can deduct because that's all based on expenses.
- SparklingCotton 8y agoIn a simple tax system there aren't that many deductions. This is especially true for low-tax jurisdictions. If you want non-standard deductions, create a company and do normal accounting. 50-100 standard deductions can be handled centrally by the IRS with no issues. It's been done in other countries for decades.
- sokoloff 8y agoThe IRS does not get a feed with the details of our charitable giving. They also don’t get a feed of various ad valorem taxes I pay. Those are common, non-business cases where the IRS doesn’t have enough info to properly prepare a return. Small business returns (even simple Schedule C “hobby businesses”) definitely can’t be done correctly in an automated fashion.
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- csomar 8y ago> Intuit spent more than $2 million lobbying last year, much of it spent on legislation that would permanently bar the government from offering taxpayers prefilled returns. H&R Block spent $3 million, also directing some of their efforts towards the bill. Not only this is an example of a broken system but also shows how fragile it is. You only need $5m to sabotage the advancement of the system and waste millions of productive man hours.
- anonymous5133 8y agoThere is nothing stopping any private organization from making free tax filing software.
- saagarjha 8y agoOther than the fact that it costs time and money to write this software? And as other commenters have mentioned, people have tried to do this in the spirit of “open source”. It’s just that the problem it’s solving is something that can be viewed as an artificial one.
- Spivak 8y agoThis I think is the core of the argument. Saying that the government should compute your taxes for you is essentially arguing that the cost of tax prep should be paid by the IRS/your taxes. Unless you believe that the IRS can do it better/more efficiently than the current group of companies providing the service then we might not really gain anything.
- gst 8y agoThat's a good point! Most of the data already known to the IRS is available in an electronic format anyway. I fire up TurboTax, electronically import my W-2, the tax statements from my bank, etc. and I'm 90% done. And the remaining items (various deductions, reporting my foreign bank accounts, etc.) are things that the IRS itself probably also wouldn't know right at the beginning of the year.
- maceurt 8y agoThe IRS already computes your taxes. They use it to check your filings.
- nodesocket 8y agoMaking taxes easier is something both sides of the aisle politically should agree on. Doing taxes, especially being a small business owner is way too complicated. While the Tax Cuts and Jobs Act of 2017 did make improvements, especially for standard W2 employees, my taxes for 2018 are still going to take me days to aggregate, complete, and file.
- charliebrownau 8y agoWestern mainstream Groups FAILING * TV * Movies * News * Scifi * Comedy * Comics * culture cons * AAA video gaming * Culture games (MTG/etc) * Scouts * Government * Universities * Education * Marriage * Housing sector * Banking Sector * LAW * Courts * Family courts
- aynawn 8y agoLike most engineers I'm in favor of automation. Besides the already mentioned open source software for tax filing, are there any tax filing companies that do not lobby the government or contribute money against prefilling our forms? If so I'd love to give them my business.
- deleted 8y ago[deleted]