4 ms·

I 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 Turb

I 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 ago
The 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 ago
  That'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 ago
    Actually, 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 ago
  There'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 ago
    I 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.
  - deleted 8y ago
    [deleted]
  - deleted 8y ago
    [deleted]
  - naniwaduni 8y ago
    Even if we offered the IRS the choice, though, I doubt they'd would choose the current system. It's easier to check someone else's diffs on your own (systematically generated) work than to check everyone's individually. The IRS operates at scale.
- briandear 8y ago
  Then why do people get tax refunds? Clearly the government and your employer get withholding wrong, so why would we trust them to calculate our bill? They have absolutely no incentive to minimize your taxes and every incentive to maximize them.
  - kingosticks 8y ago
    It's right most of the time. Most people do not get refunds. It's when abnormal payroll events occur. Everyone's job here is to absolutely pay the correct amount of tax. If either side get it wrong, they must correct it (with the appropriate interest).
    - sokoloff 8y ago
      The IRS (really the US Treasury) does not pay interest on (within tax year) over-withholding.
      - kingosticks 8y ago
        And that is not surprising, another thing they need to fix on their journey to a modern tax collection system. I was describing HMRC.
  - piyush_soni 8y ago
    Yes, a lot of people get tax refunds, but a lot of them have exactly zero refund or due amount. It will at least help those.
  - spc476 8y ago
    There's a form the employee fills out detailing how much to withhold during the year. Most people use the default, which is to withhold the most, thus those that get a refund are overpaying their taxes over the year. Prior to WW-II, everybody had to file quarterly income tax payments. It was during WW-II that withholding became a thing (maybe something to do with increasing monetary flow towards the government or something). It remained a thing afterwards. Because of the withholding, most people are unaware of exactly how much they are actually paying in taxes, especially given the "windfall" every year of refunds. "Woo hoo! Gubment gave me money!" and all that.
stephen_g 8y ago
There is a lot of evidence from other countries too. In Australia, the Government provides a free web app (used to be a Windows/Mac app) where you can file your taxes. 90% of people can just check that the income figures reported by employers are right, maybe throw in some deductions and click 'file'. You get a refund transferred and a receipt (or bill) by email within the next two weeks. It basically does everything that an individual could need to do, although you can go to an accountant if you want (if you can't be bothered, or have particularly complex things you need advice on).
datavirtue 8y ago
When it gets around to it they will just farm it out to them.

I 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 ago

The 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 ago
That'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 ago
  Actually, 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 ago
There'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 ago
  I 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.
- deleted 8y ago
  [deleted]
- deleted 8y ago
  [deleted]
- naniwaduni 8y ago
  Even if we offered the IRS the choice, though, I doubt they'd would choose the current system. It's easier to check someone else's diffs on your own (systematically generated) work than to check everyone's individually. The IRS operates at scale.
briandear 8y ago
Then why do people get tax refunds? Clearly the government and your employer get withholding wrong, so why would we trust them to calculate our bill? They have absolutely no incentive to minimize your taxes and every incentive to maximize them.
- kingosticks 8y ago
  It's right most of the time. Most people do not get refunds. It's when abnormal payroll events occur. Everyone's job here is to absolutely pay the correct amount of tax. If either side get it wrong, they must correct it (with the appropriate interest).
  - sokoloff 8y ago
    The IRS (really the US Treasury) does not pay interest on (within tax year) over-withholding.
    - kingosticks 8y ago
      And that is not surprising, another thing they need to fix on their journey to a modern tax collection system. I was describing HMRC.
- piyush_soni 8y ago
  Yes, a lot of people get tax refunds, but a lot of them have exactly zero refund or due amount. It will at least help those.
- spc476 8y ago
  There's a form the employee fills out detailing how much to withhold during the year. Most people use the default, which is to withhold the most, thus those that get a refund are overpaying their taxes over the year. Prior to WW-II, everybody had to file quarterly income tax payments. It was during WW-II that withholding became a thing (maybe something to do with increasing monetary flow towards the government or something). It remained a thing afterwards. Because of the withholding, most people are unaware of exactly how much they are actually paying in taxes, especially given the "windfall" every year of refunds. "Woo hoo! Gubment gave me money!" and all that.

stephen_g 8y ago

There is a lot of evidence from other countries too. In Australia, the Government provides a free web app (used to be a Windows/Mac app) where you can file your taxes. 90% of people can just check that the income figures reported by employers are right, maybe throw in some deductions and click 'file'. You get a refund transferred and a receipt (or bill) by email within the next two weeks. It basically does everything that an individual could need to do, although you can go to an accountant if you want (if you can't be bothered, or have particularly complex things you need advice on).

datavirtue 8y ago

When it gets around to it they will just farm it out to them.