10 ms·

TurboTax to charge more lower-income customers

144 points by howard941 7y ago

mnm1 7y ago
I don't blame TurboTax (Intuit). They do what any company in that position would. Hell, a good percentage of companies that exist probably shouldn't exist. TurboTax is definitely one of them. I blame our shit government for making such deals and not creating proper legislation. That's why such shit companies exist. There's literally no solution to this. Yeah, one can vote but that isn't actually a solution as it clearly doesn't get anything done. We have a failing government that is not and may never have been representative of any of its people, save for the ultra-rich. That's the real failing here. TurboTax is just a symptom of this disease.
- opportune 7y ago
  You should blame Intuit since they lobbied for themselves to be put in this position
  - apta 7y ago
    Both the briber, err lobbyer, and the bribee are to be blamed.
  - mnm1 7y ago
    And who wrote the laws allowing bribery? Congress. That's where the blame lies. If you create a system that can be abused, it will. If you create a system that's corrupt, why are you surprised when there's corruption? Blame the disease not the symptom. Our government is the disease. Corporations like intuit are just symptoms of the corruption. Legal corruption is still corruption. As they say, this is a feature not a bug from our government's point of view. Greatest country in the world for people who love to bribe. Corruption in most other places pales by comparison. Most places in the world outlaw bribery of government officials. We embrace it. So what if people get ripped off or even lose their lives? Business above all.
  - chillacy 7y ago
    I don’t blame the mice for eating my garbage when I leave the door open, that’s just what mice do, they’re just trying to survive. It’s my job to keep the door closed.
- paulgb 7y ago
  There is a (partial) solution to this: support press like ProPublica that bring the issues to light. Their reporting on a bill related to this, the Taxpayer Fist Act (H.R. 1957), was directly responsible for squashing a bad bill.
- rongenre 7y ago
  They lobbied for this particular disease. They're entirely worthy of blame.
  - kjsbfkjbf 7y ago
    Can we blame agents for acting rationally under capitalism?
    - jakelazaroff 7y ago
      Yes. It's rational to e.g. steal if you know you can get away with it, but it doesn't make it right.
      - chillacy 7y ago
        Awfully confusing since stealing in this case (lobbying) is currently legal. Getting upset at TurboTax for lobbying is like getting upset when a baseball player steals a base.. it’s part of the game. If it isn’t working then change the rules of the game! Trying to shame every baseball player into not stealing bases isn’t gonna work, they want to win.
        kup0 7y ago
        I find their profit strategies to be abhorrent with their nag screens, bait & switches, dark patterns, purposely confusing "free" wording, no-indexing of the real freefile page, and so forth. I think that is clearly unethical business behavior. But you're saying one can only get upset at a company if they do something illegal, not if one considers what that company is doing unethical, regardless of legality? Legal does not equal ethical.
        chillacy 7y ago
        Why not just enshrine a reflection of our morality into law itself? Large groups of people have shown a pretty bad track record of caring about "ethical behavior".
vorpalhex 7y ago
I have no issue with companies making profit but TurboTax is a bad product, with terrible scam-esque profit strategies, and actively preys upon the poor. Their "audit protection", the constant nag screens IN A PRODUCT I ALREADY PAID FOR, their push for you to upgrade (with no discount at the end if you didn't use the upgraded features), and so on. Tie that in with the "spend your refund before you get" double dipping offers, and it's a scam. I hate TurboTax, they have no real competitors, and the federal government should make them redundant.
- mattbreeden 7y ago
  > their push for you to upgrade (with no discount at the end if you didn't use the upgraded features) This one actually got me this year. They force you to upgrade prior to seeing if the upgrade helps. I 'upgraded' to see if itemizing a certain thing would beat my standard deduction. It didn't, so I removed that whole section. But then I forgot to downgrade and accidentally paid an extra 30-50$ or whatever it was for absolutely nothing- something they could have easily detected. Obviously the responsibility lies on me for overpaying, but most other businesses wouldn't have taken the extra money for something I didn't use.
- henryfjordan 7y ago
  The Federal Government cannot, by law, compete with TurboTax
  - saagarjha 7y ago
    Why, is it illegal for them to make tax filing easier (if it is, did TurboTax lobby for it?)
    - acdw 7y ago
      It is right now, and they did. They've been trying to make it permanent: https://techcrunch.com/2019/04/09/the-government-is-about-to-permanently-bar-the-irs-from-creating-a-free-electronic-filing-system/ https://techcrunch.com/2019/04/09/the-government-is-about-to...
acdw 7y ago
Don't use TurboTax. I found out about IRS's VITA[1] program a few years ago and it's been a game-changer. The only real limits is that you make less than $55K, and it specifically targets those with disabilities and limited-English speakers. When I went, my preparer even said that they don't really care if you make more than $55K, as long as the return isn't super complicated. [1]: https://www.irs.gov/individuals/free-tax-return-preparation-for-you-by-volunteers https://www.irs.gov/individuals/free-tax-return-preparation-...
astrea 7y ago
I don't even understand the tax preparation system in general. As a newly-minted Adult, I find it rather frustrating that I collect all the documents that the government and I both have (or they've sent me) and fill out one big form that condenses all that info. Then if I mess it up/lie, the government comes after me. Ridiculously inefficient system.
- dole 7y ago
  That's because it's "voluntary compliance", somewhat based on the honor system, if you can believe that. If you mess up isn't as big a deal as it is if you cheat and are caught. Some people make their livelihood on attempting to lie on their taxes, a fudge here, a fudge there in order to collect more than their share. Some get away with it.
- vonmoltke 7y ago
  > I collect all the documents that the government and I both have Our tax system is terrible and convoluted, but this statement is not actually correct. In may cases you get copies of tax forms from businesses before the IRS has processed the business return, possibly before the business return has even been submitted. Business and personal returns are processed in parallel and cannot be reconciled against each other until they have all been done. That's why audits almost always have at least one tax year of lag, because that's how long it takes to get through everything. Filing extensions make the process even worse.
  - astrea 7y ago
    Ah okay. I just assumed that the fact that my paycheck itemizes the tax withholdings that they were already receiving or at least aware of my taxes to date.
matthijs 7y ago
Great podcast about the TurboTax ProPublica articles: https://gimletmedia.com/shows/reply-all/6nhgol/144-dark-pattern https://gimletmedia.com/shows/reply-all/6nhgol/144-dark-patt...
- djhworld 7y ago
  I'm from the UK but listened to this episode, one of the shocking aspects to it was they set noindex directives on the FreeFile site - although looks like they've removed them since https://www.propublica.org/article/turbotax-deliberately-hides-its-free-file-page-from-search-engines https://www.propublica.org/article/turbotax-deliberately-hid...
basseq 7y ago
On a meta level, this is a little biased and click-baity: the Trump references, the "abuses of power" mission statement, the emphasis on "the Disabled, the Unemployed and Students". In short, Intuit moved from previously-free features to their paid tiers. This move may have disproportionately affected low-income taxpayers, though—if true—that impact was unintentional, not targeted.[1] The article cites several different features that were monetized and affect lower-earning taxpayers[2] as well as those affecting higher-end earners[3], but doesn't state that this list is comprehensive, and doesn't prove that impact was disproportionate. ALL THAT SAID, there's still some crappy dark patterns here, as well as broader tax-ecosystem improvements that would benefit taxpayers that Intuit has fought tooth and nail to block. So I'm certainly not defending Intuit here, but I'd find more objective reporting to be more compelling. [1] "The income levels of the groups that were being driven to paid products 'was never really considered.'" [2] "One of these forms was for a tax credit that goes exclusively to poor taxpayers who are elderly or get disability benefits. Another is used by low- to middle-income households that receive a credit for putting money in a retirement account." (Which, if it's what I'm thinking of, applies to above-average earners, too.) "A third is used by taxpayers who collected unemployment benefits." "And then there are people with student loans, who also have to use Deluxe." (Unclear if this is a change.) [3] "The company’s changes also affected parents who get a credit for child care expenses, as well as people filing the schedule for interest and dividends."
- threezero 7y ago
  Why would you say the impact on low-income people was unintentional? Do you think that Intuit would release a tax product without an analysis of who it would affect? It feels like you’re giving Intuit the benefit of the doubt here when numerous sources, including Intuit employees, say that Intuit deliberately set out to increase revenue at the expense of lower income taxpayers.
  - basseq 7y ago
    I'm quoting the article: > “They were always supposed to be customer focused, customer first,” one former staffer said. But the income levels of the groups that were being driven to paid products “was never really considered.” Where's the numerous sources that said Intuit deliberately set out to increase revenue at the [disproportionate] expense of lower income taxpayers (emphasis mine)?
CalRobert 7y ago
If you're able to do your taxes by hand but just want to efile, there is https://www.freefilefillableforms.com/ https://www.freefilefillableforms.com/ . Terrible UI (and the emails about failed form validation are comical) but it works, and is free.
thetruthseeker1 7y ago
Enterprises like these are free to make whatever decisions they want and I don't think it's fair to evaluate them with morals that seem to imply they are evil. What I mean is : this enterprise is not a monopoly, and there is competition, and it is free to fail ( unlike some banks lets say). If some other tax website provides better value, people are free to move to that.
- thetruthseeker1 7y ago
  If you disagree with this view that is not a reason to down vote. If you think the point I am making is irrelevant or insulting or a bunch of other reasons which are not addressing the topic at hand, then that is a reason to down vote. I will continue to argue that it's ok that a tax firm like Intuit can operate with profit being it's main motive
- chillacy 7y ago
  I agree people are too quick to reach for labels like evil when the reality is that systems create incentives and groups of people follow incentives (basically don’t hate the player hate the game) and do an amazing job at rationalizing their actions as good (we’re all the protagonist of our own stories). However we don’t have to throw in the towel and let these things run wild. If TurboTax exists by the grace of rent seeking and fixing tax filing at the federal level increases our overall productivity/happiness then we should try to change the system.
itslennysfault 7y ago
Anyone using TurboTax should switch to https://www.freetaxusa.com/ https://www.freetaxusa.com/ I don't work for either company. I'm just someone that used TurboTax for 5 years and switched this year. Intuit has a huge history of lobbying against simplification of tax code, and there was even a bill to create a government run self serve e-file platform that Intuit helped kill. Also, Free Tax USA is a better UX and it's "free". Federal is free you pay like $10 to file state. I live in WA (no state income tax) so it was totally free for me. I paid $6.99 for the premium support just 'cause I wanted to give them some money 'cause I appreciate the service.
FluffyKitty 7y ago
If you're in Canada, and want to stop supporting TurboTax, I recommend giving SimpleTax.ca a try. It's free for everyone, but you can donate after you file your taxes if you want. I was also very impressed with their privacy policy [1]. [1] https://simpletax.ca/privacy https://simpletax.ca/privacy
Proven 7y ago
Why do thy use it if they can't afford it? Besides, "lower income customers" pay little to no tax. TurboTax Timmy made a decent ROI (assuming he hasn't pirated the software, in which case the ROI was awesome) on TurboTax - that must count for something.
danielfoster 7y ago
TurboTax isn’t the IRS and it isn’t their responsibility to help tax payers navigate the overly complicated tax code for free (to the extent that the company doesn’t lobby for complex tax laws). Congress should create a streamlined tax filing system for everyday people. Students also should not be charged for filing with a 1098, but I would also expect anyone in graduate school to be able to file a simple tax return on their own.
kup0 7y ago
I used H&R Block this time around (I just picked a competitor, no real reason for specifically choosing H&R), because I ran into the same thing. The student loan interest deduction was free through them. Most competitors were offering it for free, still, so I'd just say dump TurboTax like I did. I'll never go back. There were quite a few competitors I considered. H&R even allows import of TurboTax files which saved a bunch of time.

144 points by howard941 7y ago

mnm1 7y ago

I don't blame TurboTax (Intuit). They do what any company in that position would. Hell, a good percentage of companies that exist probably shouldn't exist. TurboTax is definitely one of them. I blame our shit government for making such deals and not creating proper legislation. That's why such shit companies exist. There's literally no solution to this. Yeah, one can vote but that isn't actually a solution as it clearly doesn't get anything done. We have a failing government that is not and may never have been representative of any of its people, save for the ultra-rich. That's the real failing here. TurboTax is just a symptom of this disease.

opportune 7y ago
You should blame Intuit since they lobbied for themselves to be put in this position
- apta 7y ago
  Both the briber, err lobbyer, and the bribee are to be blamed.
- mnm1 7y ago
  And who wrote the laws allowing bribery? Congress. That's where the blame lies. If you create a system that can be abused, it will. If you create a system that's corrupt, why are you surprised when there's corruption? Blame the disease not the symptom. Our government is the disease. Corporations like intuit are just symptoms of the corruption. Legal corruption is still corruption. As they say, this is a feature not a bug from our government's point of view. Greatest country in the world for people who love to bribe. Corruption in most other places pales by comparison. Most places in the world outlaw bribery of government officials. We embrace it. So what if people get ripped off or even lose their lives? Business above all.
- chillacy 7y ago
  I don’t blame the mice for eating my garbage when I leave the door open, that’s just what mice do, they’re just trying to survive. It’s my job to keep the door closed.
paulgb 7y ago
There is a (partial) solution to this: support press like ProPublica that bring the issues to light. Their reporting on a bill related to this, the Taxpayer Fist Act (H.R. 1957), was directly responsible for squashing a bad bill.
rongenre 7y ago
They lobbied for this particular disease. They're entirely worthy of blame.
- kjsbfkjbf 7y ago
  Can we blame agents for acting rationally under capitalism?
  - jakelazaroff 7y ago
    Yes. It's rational to e.g. steal if you know you can get away with it, but it doesn't make it right.
    - chillacy 7y ago
      Awfully confusing since stealing in this case (lobbying) is currently legal. Getting upset at TurboTax for lobbying is like getting upset when a baseball player steals a base.. it’s part of the game. If it isn’t working then change the rules of the game! Trying to shame every baseball player into not stealing bases isn’t gonna work, they want to win.
      - kup0 7y ago
        I find their profit strategies to be abhorrent with their nag screens, bait & switches, dark patterns, purposely confusing "free" wording, no-indexing of the real freefile page, and so forth. I think that is clearly unethical business behavior. But you're saying one can only get upset at a company if they do something illegal, not if one considers what that company is doing unethical, regardless of legality? Legal does not equal ethical.
        chillacy 7y ago
        Why not just enshrine a reflection of our morality into law itself? Large groups of people have shown a pretty bad track record of caring about "ethical behavior".

vorpalhex 7y ago

I have no issue with companies making profit but TurboTax is a bad product, with terrible scam-esque profit strategies, and actively preys upon the poor. Their "audit protection", the constant nag screens IN A PRODUCT I ALREADY PAID FOR, their push for you to upgrade (with no discount at the end if you didn't use the upgraded features), and so on. Tie that in with the "spend your refund before you get" double dipping offers, and it's a scam. I hate TurboTax, they have no real competitors, and the federal government should make them redundant.

mattbreeden 7y ago
> their push for you to upgrade (with no discount at the end if you didn't use the upgraded features) This one actually got me this year. They force you to upgrade prior to seeing if the upgrade helps. I 'upgraded' to see if itemizing a certain thing would beat my standard deduction. It didn't, so I removed that whole section. But then I forgot to downgrade and accidentally paid an extra 30-50$ or whatever it was for absolutely nothing- something they could have easily detected. Obviously the responsibility lies on me for overpaying, but most other businesses wouldn't have taken the extra money for something I didn't use.
henryfjordan 7y ago
The Federal Government cannot, by law, compete with TurboTax
- saagarjha 7y ago
  Why, is it illegal for them to make tax filing easier (if it is, did TurboTax lobby for it?)
  - acdw 7y ago
    It is right now, and they did. They've been trying to make it permanent: https://techcrunch.com/2019/04/09/the-government-is-about-to-permanently-bar-the-irs-from-creating-a-free-electronic-filing-system/ https://techcrunch.com/2019/04/09/the-government-is-about-to...

acdw 7y ago

Don't use TurboTax. I found out about IRS's VITA[1] program a few years ago and it's been a game-changer. The only real limits is that you make less than $55K, and it specifically targets those with disabilities and limited-English speakers. When I went, my preparer even said that they don't really care if you make more than $55K, as long as the return isn't super complicated. [1]: https://www.irs.gov/individuals/free-tax-return-preparation-for-you-by-volunteers https://www.irs.gov/individuals/free-tax-return-preparation-...

astrea 7y ago

I don't even understand the tax preparation system in general. As a newly-minted Adult, I find it rather frustrating that I collect all the documents that the government and I both have (or they've sent me) and fill out one big form that condenses all that info. Then if I mess it up/lie, the government comes after me. Ridiculously inefficient system.

dole 7y ago
That's because it's "voluntary compliance", somewhat based on the honor system, if you can believe that. If you mess up isn't as big a deal as it is if you cheat and are caught. Some people make their livelihood on attempting to lie on their taxes, a fudge here, a fudge there in order to collect more than their share. Some get away with it.
vonmoltke 7y ago
> I collect all the documents that the government and I both have Our tax system is terrible and convoluted, but this statement is not actually correct. In may cases you get copies of tax forms from businesses before the IRS has processed the business return, possibly before the business return has even been submitted. Business and personal returns are processed in parallel and cannot be reconciled against each other until they have all been done. That's why audits almost always have at least one tax year of lag, because that's how long it takes to get through everything. Filing extensions make the process even worse.
- astrea 7y ago
  Ah okay. I just assumed that the fact that my paycheck itemizes the tax withholdings that they were already receiving or at least aware of my taxes to date.

matthijs 7y ago

Great podcast about the TurboTax ProPublica articles: https://gimletmedia.com/shows/reply-all/6nhgol/144-dark-pattern https://gimletmedia.com/shows/reply-all/6nhgol/144-dark-patt...

djhworld 7y ago
I'm from the UK but listened to this episode, one of the shocking aspects to it was they set noindex directives on the FreeFile site - although looks like they've removed them since https://www.propublica.org/article/turbotax-deliberately-hides-its-free-file-page-from-search-engines https://www.propublica.org/article/turbotax-deliberately-hid...

basseq 7y ago

On a meta level, this is a little biased and click-baity: the Trump references, the "abuses of power" mission statement, the emphasis on "the Disabled, the Unemployed and Students". In short, Intuit moved from previously-free features to their paid tiers. This move may have disproportionately affected low-income taxpayers, though—if true—that impact was unintentional, not targeted.[1] The article cites several different features that were monetized and affect lower-earning taxpayers[2] as well as those affecting higher-end earners[3], but doesn't state that this list is comprehensive, and doesn't prove that impact was disproportionate. ALL THAT SAID, there's still some crappy dark patterns here, as well as broader tax-ecosystem improvements that would benefit taxpayers that Intuit has fought tooth and nail to block. So I'm certainly not defending Intuit here, but I'd find more objective reporting to be more compelling. [1] "The income levels of the groups that were being driven to paid products 'was never really considered.'" [2] "One of these forms was for a tax credit that goes exclusively to poor taxpayers who are elderly or get disability benefits. Another is used by low- to middle-income households that receive a credit for putting money in a retirement account." (Which, if it's what I'm thinking of, applies to above-average earners, too.) "A third is used by taxpayers who collected unemployment benefits." "And then there are people with student loans, who also have to use Deluxe." (Unclear if this is a change.) [3] "The company’s changes also affected parents who get a credit for child care expenses, as well as people filing the schedule for interest and dividends."

threezero 7y ago
Why would you say the impact on low-income people was unintentional? Do you think that Intuit would release a tax product without an analysis of who it would affect? It feels like you’re giving Intuit the benefit of the doubt here when numerous sources, including Intuit employees, say that Intuit deliberately set out to increase revenue at the expense of lower income taxpayers.
- basseq 7y ago
  I'm quoting the article: > “They were always supposed to be customer focused, customer first,” one former staffer said. But the income levels of the groups that were being driven to paid products “was never really considered.” Where's the numerous sources that said Intuit deliberately set out to increase revenue at the [disproportionate] expense of lower income taxpayers (emphasis mine)?

CalRobert 7y ago

If you're able to do your taxes by hand but just want to efile, there is https://www.freefilefillableforms.com/ https://www.freefilefillableforms.com/ . Terrible UI (and the emails about failed form validation are comical) but it works, and is free.

thetruthseeker1 7y ago

Enterprises like these are free to make whatever decisions they want and I don't think it's fair to evaluate them with morals that seem to imply they are evil. What I mean is : this enterprise is not a monopoly, and there is competition, and it is free to fail ( unlike some banks lets say). If some other tax website provides better value, people are free to move to that.

thetruthseeker1 7y ago
If you disagree with this view that is not a reason to down vote. If you think the point I am making is irrelevant or insulting or a bunch of other reasons which are not addressing the topic at hand, then that is a reason to down vote. I will continue to argue that it's ok that a tax firm like Intuit can operate with profit being it's main motive
chillacy 7y ago
I agree people are too quick to reach for labels like evil when the reality is that systems create incentives and groups of people follow incentives (basically don’t hate the player hate the game) and do an amazing job at rationalizing their actions as good (we’re all the protagonist of our own stories). However we don’t have to throw in the towel and let these things run wild. If TurboTax exists by the grace of rent seeking and fixing tax filing at the federal level increases our overall productivity/happiness then we should try to change the system.

itslennysfault 7y ago

Anyone using TurboTax should switch to https://www.freetaxusa.com/ https://www.freetaxusa.com/ I don't work for either company. I'm just someone that used TurboTax for 5 years and switched this year. Intuit has a huge history of lobbying against simplification of tax code, and there was even a bill to create a government run self serve e-file platform that Intuit helped kill. Also, Free Tax USA is a better UX and it's "free". Federal is free you pay like $10 to file state. I live in WA (no state income tax) so it was totally free for me. I paid $6.99 for the premium support just 'cause I wanted to give them some money 'cause I appreciate the service.

FluffyKitty 7y ago

If you're in Canada, and want to stop supporting TurboTax, I recommend giving SimpleTax.ca a try. It's free for everyone, but you can donate after you file your taxes if you want. I was also very impressed with their privacy policy [1]. [1] https://simpletax.ca/privacy https://simpletax.ca/privacy

Proven 7y ago

Why do thy use it if they can't afford it? Besides, "lower income customers" pay little to no tax. TurboTax Timmy made a decent ROI (assuming he hasn't pirated the software, in which case the ROI was awesome) on TurboTax - that must count for something.

danielfoster 7y ago

TurboTax isn’t the IRS and it isn’t their responsibility to help tax payers navigate the overly complicated tax code for free (to the extent that the company doesn’t lobby for complex tax laws). Congress should create a streamlined tax filing system for everyday people. Students also should not be charged for filing with a 1098, but I would also expect anyone in graduate school to be able to file a simple tax return on their own.

kup0 7y ago

I used H&R Block this time around (I just picked a competitor, no real reason for specifically choosing H&R), because I ran into the same thing. The student loan interest deduction was free through them. Most competitors were offering it for free, still, so I'd just say dump TurboTax like I did. I'll never go back. There were quite a few competitors I considered. H&R even allows import of TurboTax files which saved a bunch of time.