11 ms·

Yeah they do, of course they do. They are in business to make money, after all. The real story is the absolute travesty of government corruption that TurboTax

Yeah they do, of course they do. They are in business to make money, after all. The real story is the absolute travesty of government corruption that TurboTax and HR Block have perpetrated by making it illegal for the government to make tax filing as easy as it should be. It's one of the things I would immediately correct if I was king for a day.

dacohenii 8y ago
There's a good Planet Money episode about this, in case you like podcasts: https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero https://www.npr.org/sections/money/2017/03/22/521132960/epis...
- damian2000 8y ago
  That was a great episode, the guy funded a lobbyist from his own pocket to the tune of $70k but still lost
  - mywittyname 8y ago
    The best part, IMHO, was the Republican Senator they interviewed that came out and said that they (Conservatives in Congress) wanted tax filing to be onerous.
vertis 8y ago
Really makes me appreciate the ATO (Australia). Free online tax filing has been a thing for quite a few years. You end up with an accountant only if your tax is somewhat complex, which tends to correspond with higher income.
- arethuza 8y ago
  Or places like the UK where most people don't even need to do a tax return and if you do doing it online for free isn't too bad - only time I've used an accountant was when things were when my tax affairs were moderately complex.
- stagger87 8y ago
  So basically the same as the US.
  - rando444 8y ago
    In Australia, like in Europe and most countries, when you log in to do your taxes, your forms are pre-filled with everything the government already has on record for you. You can add to it or modify it as you see fit, but the vast majority of people just accept the default values and they're done. Most people spend more time finding their login info than verifying their taxes. With the amount people complain about the US system, it doesn't sound like they are doing the same thing.
    - ac29 8y ago
      That's definitely better than what we have in the US, but the majority of people in the US don't need more than the standard form 1040 [0], which isn't too hard to fill out. Tax software vendors and accountants want people to believe its more complicated than it really is, when in reality most people only have a single source of income, and maybe a child tax credit and mortgage interest credit. For these people, doing taxes "by hand" shouldn't take more than 10 or 15 minutes. [0] https://www.irs.gov/pub/irs-pdf/f1040.pdf https://www.irs.gov/pub/irs-pdf/f1040.pdf
      - Symbiote 8y ago
        That form isn't long, but would be less intimidating if it were spread out over 3-4 pages, with larger fonts and no abbreviations. Compare a UK tax form (not for the usual, simple case; I don't know if there is a form for that): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787629/SA100_2019.pdf https://assets.publishing.service.gov.uk/government/uploads/... (Although as it says, 92% of people fill in this form online. I can't look, as it requires a login, but it should be a good UX going by the other forms on the gov.uk site.)
        stordoff 8y ago
jakelazaroff 8y ago
This is directly related, I think. One reason the IRS hasn't made it easier is a deal with the industry group "Free File Alliance", which essentially privatizes this (indeed, the page TurboTax is hiding here is their Free File page). However, while 70% of taxpayers would be eligible for free filing, in practice only 3% do — no doubt because tax prep companies make it so difficult to find and use this option. These companies are offering products like this as a carrot to prevent the IRS from competing with them, and then deliberately making them as difficult to find and use as possible. Source: https://www.propublica.org/article/congress-is-about-to-ban-the-government-from-offering-free-online-tax-filing-thank-turbotax https://www.propublica.org/article/congress-is-about-to-ban-...
- dontbenebby 8y ago
  Edit: As a child comment pointed out, the issue was a brokerage account I opened in addition to the Roth IRA. (The Roth IRA deposit limit is smaller than the 401K deposit limit) /// The problem with that is there's often caveats. Ex: in grad school I did a summer internship, and put my profits into an IRA. Later on, I found out I could not use many free file software, because they considered handling the dividends my index funds had generated as a premium feature, even though I was below the income limit. Eventually I found out the AARP had a free tax prep program that did not have that restriction (nor was it limited to over 65s), but it took a lot of effort to avoid paying 50+ bucks just to process a tiny, tiny bit of tax because it was in the "wrong" category. IMHO it's not cool to nudge low income people to not save for retirement. If anyone else has had this frustration, bookmark this page: https://secure.aarp.org/applications/VMISLocator/searchTaxAideLocations.action https://secure.aarp.org/applications/VMISLocator/searchTaxAi...
  - jakelazaroff 8y ago
    I don't think this is true. Under "What you need to get started" on the IRS's Free File information page [1]: > Forms 1099-DIV and Forms 1099-R, showing dividends and distributions from retirement and other plans paid to you during the year Note that there is a difference between a tax product's freemium tier (where they can upsell) and their Free File product (where they cannot). A big part of the problem here is that these companies do their best to make you conflate the two — and then hide the second one, so they can upsell unsuspecting taxpayers who don't know the difference. [1] https://www.irs.gov/e-file-providers/what-you-need-to-get-started https://www.irs.gov/e-file-providers/what-you-need-to-get-st...
grecy 8y ago
> The real story is the absolute travesty of government corruption that TurboTax and HR Block have perpetrated by making it illegal for the government to make tax filing as easy as it should be You know this applies to pretty much every service in the US right? A company wants to make massive profits, so it just lobbies and buys the laws it wants. Healthcare, private prisons, banking, "security" (TSA), education, transport, etc. etc. etc. If you were king for a day, I hope you'd fix a lot more than just doing taxes.
- cr0sh 8y ago
  I don't know why, but all of this "privatization" bugs the hell out of me. Maybe it has something to with wanting to see my taxes being used properly, rather than going to a private company's profits. Maybe it's the abstraction; that'd I like to know that the workers I see doing the work for the government are government employees, and that I am, in some small way, helping them? I mean, sure, with a private company that's still a thing - but maybe I also like seeing road crews with the city's emblem and such working on issues - not a private company doing it? You know that here in the USA, there is virtually a single private company that handles emergency and construction signage in every state? When you see signs out that say "Road Construction Ahead" or the flashing signs on trailers, or even just some construction cones - all of those are owned and placed by virtually one company? The name of the company is "United Rentals" - and while if you look on the back of those signs they may have different company names printed on them, when you call the number, it will always patch you through to the United Rentals phone bank/answering service. You might call "Bob's Signs" - but United Rentals will answer. We can't even handle placing road signs out using public means and employees. I'm sure somewhere in all of this, it was done as part of the whole process of breaking up (public) worker's unions.
  - fifnir 8y ago
    > I don't know why You know exactly why it bugs you and you're absolutely right. I think what's confusing is how can other people NOT see these huge problems
  - j_m_b 8y ago
jimrhods23 8y ago
If the government made it easy, the default tax form would give no benefit to the taxpayer. Many uneducated people would just hand it in and not have any write offs/deductions anyway. By making it require a small amount of effort, people are forced to take a look at what they are paying. People with money/educated about taxes would actually take the time to fill out the forms and benefit from deductions. It wouldn't really make that much of a difference. I also am wondering what is so difficult about taxes now? Most people with 1 or 2 jobs just need to fill out a 1040 form, which takes an hour or two at most, and send it in. I really don't think we benefit society by catering to an uneducated/indifferent populace.
- kalleboo 8y ago
  Part of the problem is of course the convoluted tax code in the US with all the very specific deductions and odd cases, where other countries may have much more simplified tax codes to avoid the problem completely.
- JohnFen 8y ago
  I don't understand your argument at all. You seem to be arguing that making taxes difficult is a good thing because it's educational? I disagree. All it does is increase the time and expense of doing taxes. > People with money/educated about taxes would actually take the time to fill out the forms and benefit from deductions. I don't think this is universally true. People will do a cost/benefit on this stuff. For some people, it will be worth the tradeoff required to maximally reduce taxes. For others, it absolutely is not. Why penalize the latter group? > I really don't think we benefit society by catering to an uneducated/indifferent populace. It's not catering to a specific group, it's avoiding penalizing that group. From my point of view, intentionally making taxes complex really amounts to an additional unwarranted tax on people.
josho 8y ago
> of course they do. They are in business to make money, after all. Companies can fulfill their obligations without resorting to trickery. They clearly aren't meeting the spirit of their obligation/commitment and therefore should be punished. So, the government should punish these companies by implementing your second point. If it wasn't clear previously then the industry behavior has now made it obvious they act in bad faith, and are a detriment to both consumers and society in general.
test6554 8y ago
I would be happy for if the government made a free-file api and let for-profit companies and open-source projects alike create solutions for consumers. It would be like the government owning the telephone poles and letting any ISP run their cables on it to try and compete for customers.

dacohenii 8y ago

There's a good Planet Money episode about this, in case you like podcasts: https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero https://www.npr.org/sections/money/2017/03/22/521132960/epis...

damian2000 8y ago
That was a great episode, the guy funded a lobbyist from his own pocket to the tune of $70k but still lost
- mywittyname 8y ago
  The best part, IMHO, was the Republican Senator they interviewed that came out and said that they (Conservatives in Congress) wanted tax filing to be onerous.

vertis 8y ago

Really makes me appreciate the ATO (Australia). Free online tax filing has been a thing for quite a few years. You end up with an accountant only if your tax is somewhat complex, which tends to correspond with higher income.

arethuza 8y ago
Or places like the UK where most people don't even need to do a tax return and if you do doing it online for free isn't too bad - only time I've used an accountant was when things were when my tax affairs were moderately complex.
stagger87 8y ago
So basically the same as the US.
- rando444 8y ago
  In Australia, like in Europe and most countries, when you log in to do your taxes, your forms are pre-filled with everything the government already has on record for you. You can add to it or modify it as you see fit, but the vast majority of people just accept the default values and they're done. Most people spend more time finding their login info than verifying their taxes. With the amount people complain about the US system, it doesn't sound like they are doing the same thing.
  - ac29 8y ago
    That's definitely better than what we have in the US, but the majority of people in the US don't need more than the standard form 1040 [0], which isn't too hard to fill out. Tax software vendors and accountants want people to believe its more complicated than it really is, when in reality most people only have a single source of income, and maybe a child tax credit and mortgage interest credit. For these people, doing taxes "by hand" shouldn't take more than 10 or 15 minutes. [0] https://www.irs.gov/pub/irs-pdf/f1040.pdf https://www.irs.gov/pub/irs-pdf/f1040.pdf
    - Symbiote 8y ago
      That form isn't long, but would be less intimidating if it were spread out over 3-4 pages, with larger fonts and no abbreviations. Compare a UK tax form (not for the usual, simple case; I don't know if there is a form for that): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787629/SA100_2019.pdf https://assets.publishing.service.gov.uk/government/uploads/... (Although as it says, 92% of people fill in this form online. I can't look, as it requires a login, but it should be a good UX going by the other forms on the gov.uk site.)
      - stordoff 8y ago

jakelazaroff 8y ago

This is directly related, I think. One reason the IRS hasn't made it easier is a deal with the industry group "Free File Alliance", which essentially privatizes this (indeed, the page TurboTax is hiding here is their Free File page). However, while 70% of taxpayers would be eligible for free filing, in practice only 3% do — no doubt because tax prep companies make it so difficult to find and use this option. These companies are offering products like this as a carrot to prevent the IRS from competing with them, and then deliberately making them as difficult to find and use as possible. Source: https://www.propublica.org/article/congress-is-about-to-ban-the-government-from-offering-free-online-tax-filing-thank-turbotax https://www.propublica.org/article/congress-is-about-to-ban-...

dontbenebby 8y ago
Edit: As a child comment pointed out, the issue was a brokerage account I opened in addition to the Roth IRA. (The Roth IRA deposit limit is smaller than the 401K deposit limit) /// The problem with that is there's often caveats. Ex: in grad school I did a summer internship, and put my profits into an IRA. Later on, I found out I could not use many free file software, because they considered handling the dividends my index funds had generated as a premium feature, even though I was below the income limit. Eventually I found out the AARP had a free tax prep program that did not have that restriction (nor was it limited to over 65s), but it took a lot of effort to avoid paying 50+ bucks just to process a tiny, tiny bit of tax because it was in the "wrong" category. IMHO it's not cool to nudge low income people to not save for retirement. If anyone else has had this frustration, bookmark this page: https://secure.aarp.org/applications/VMISLocator/searchTaxAideLocations.action https://secure.aarp.org/applications/VMISLocator/searchTaxAi...
- jakelazaroff 8y ago
  I don't think this is true. Under "What you need to get started" on the IRS's Free File information page [1]: > Forms 1099-DIV and Forms 1099-R, showing dividends and distributions from retirement and other plans paid to you during the year Note that there is a difference between a tax product's freemium tier (where they can upsell) and their Free File product (where they cannot). A big part of the problem here is that these companies do their best to make you conflate the two — and then hide the second one, so they can upsell unsuspecting taxpayers who don't know the difference. [1] https://www.irs.gov/e-file-providers/what-you-need-to-get-started https://www.irs.gov/e-file-providers/what-you-need-to-get-st...

grecy 8y ago

> The real story is the absolute travesty of government corruption that TurboTax and HR Block have perpetrated by making it illegal for the government to make tax filing as easy as it should be You know this applies to pretty much every service in the US right? A company wants to make massive profits, so it just lobbies and buys the laws it wants. Healthcare, private prisons, banking, "security" (TSA), education, transport, etc. etc. etc. If you were king for a day, I hope you'd fix a lot more than just doing taxes.

cr0sh 8y ago
I don't know why, but all of this "privatization" bugs the hell out of me. Maybe it has something to with wanting to see my taxes being used properly, rather than going to a private company's profits. Maybe it's the abstraction; that'd I like to know that the workers I see doing the work for the government are government employees, and that I am, in some small way, helping them? I mean, sure, with a private company that's still a thing - but maybe I also like seeing road crews with the city's emblem and such working on issues - not a private company doing it? You know that here in the USA, there is virtually a single private company that handles emergency and construction signage in every state? When you see signs out that say "Road Construction Ahead" or the flashing signs on trailers, or even just some construction cones - all of those are owned and placed by virtually one company? The name of the company is "United Rentals" - and while if you look on the back of those signs they may have different company names printed on them, when you call the number, it will always patch you through to the United Rentals phone bank/answering service. You might call "Bob's Signs" - but United Rentals will answer. We can't even handle placing road signs out using public means and employees. I'm sure somewhere in all of this, it was done as part of the whole process of breaking up (public) worker's unions.
- fifnir 8y ago
  > I don't know why You know exactly why it bugs you and you're absolutely right. I think what's confusing is how can other people NOT see these huge problems
- j_m_b 8y ago

jimrhods23 8y ago

If the government made it easy, the default tax form would give no benefit to the taxpayer. Many uneducated people would just hand it in and not have any write offs/deductions anyway. By making it require a small amount of effort, people are forced to take a look at what they are paying. People with money/educated about taxes would actually take the time to fill out the forms and benefit from deductions. It wouldn't really make that much of a difference. I also am wondering what is so difficult about taxes now? Most people with 1 or 2 jobs just need to fill out a 1040 form, which takes an hour or two at most, and send it in. I really don't think we benefit society by catering to an uneducated/indifferent populace.

kalleboo 8y ago
Part of the problem is of course the convoluted tax code in the US with all the very specific deductions and odd cases, where other countries may have much more simplified tax codes to avoid the problem completely.
JohnFen 8y ago
I don't understand your argument at all. You seem to be arguing that making taxes difficult is a good thing because it's educational? I disagree. All it does is increase the time and expense of doing taxes. > People with money/educated about taxes would actually take the time to fill out the forms and benefit from deductions. I don't think this is universally true. People will do a cost/benefit on this stuff. For some people, it will be worth the tradeoff required to maximally reduce taxes. For others, it absolutely is not. Why penalize the latter group? > I really don't think we benefit society by catering to an uneducated/indifferent populace. It's not catering to a specific group, it's avoiding penalizing that group. From my point of view, intentionally making taxes complex really amounts to an additional unwarranted tax on people.

josho 8y ago

> of course they do. They are in business to make money, after all. Companies can fulfill their obligations without resorting to trickery. They clearly aren't meeting the spirit of their obligation/commitment and therefore should be punished. So, the government should punish these companies by implementing your second point. If it wasn't clear previously then the industry behavior has now made it obvious they act in bad faith, and are a detriment to both consumers and society in general.

test6554 8y ago

I would be happy for if the government made a free-file api and let for-profit companies and open-source projects alike create solutions for consumers. It would be like the government owning the telephone poles and letting any ISP run their cables on it to try and compete for customers.