6 ms·

No, it can work with the complicated path too, they present you with what they already know about you and give you the opportunity to add more information that

by astura 6y ago

No, it can work with the complicated path too, they present you with what they already know about you and give you the opportunity to add more information that they don't yet know. They then calculate what you owe and tell you. At some point they are going to calculate what you owe based on what you provide them and what is reported to them, no matter what. Laws that authorize "auto tax" can also come with extra reporting requirements.

dave5104 6y ago
Not to mention, I'm sure the "happy path" will accommodate a significant number of tax payers.
- astura 6y ago
  Currently, probably >85%, given that ~90% percent of households took the standard deduction in 2018.
  - ghaff 6y ago
    The standard deduction is pretty high these days. I'll probably be back to not itemizing next year but my taxes are certainly not simple.
robert_foss 6y ago
This is how it is done in Sweden. And after having lived in 2 other countries it is clearly the way to go. The tax authority sends you a summary and you just approve it.
- sfteus 6y ago
  This always made the most sense to me. You get your return and review it; sign off if it's good, modify and return it if you have more claims, something is wrong / missing. I'd wager the majority of people wouldn't have a reason to submit a revised return. And if the federal government generated your return, hopefully that would give them reason to automatically exclude you from audit, (ideally) reducing the burden of auditors.
- dtech 6y ago
  Works this way in the Netherlands too, you login on a website and just click through the information they have pre-filled in normal cases.
- vinkelhake 6y ago
  As a Swedish expat in California I cringe everytime tax season comes. Both because of how annoying it is, and because I know how simple it can be.
  - deleted 6y ago
    [deleted]
sokoloff 6y ago
There is a much greater depth of detail that I provide to my tax preparer than I'd be willing to share with the IRS. I tell my tax preparer everything and have perfect confidence that my taxes will be prepared correctly and in accordance with the tax code and that nothing which is not required to be disclosed will be disclosed. Much of what I provide to my preparer is irrelevant to my tax obligations and anything that's irrelevant I would prefer not be disclosed. I'm mostly a W-2 schmo without any particularly complex business arrangements and with a spouse who employs themself in a consulting capacity, puts the statutory maximum into tax-deferred accounts every year, and we have minor kids who are required to file returns due to kiddie tax laws. I can imagine many people would rather pay a high three or low four-figure per year bill for tax prep and representation rather than give the IRS full access to their financial lives. I do support (and strongly so) the idea that the IRS could provide simple, default tax prep based on the information they receive. Where I break is what escalation path should exist; I think there must remain an effective and private escalation path for more complex scenarios. (In many ways, that makes it even easier to implement. Make the simple case automated-by-default. Punt all the complex cases to the current system.)
- harperlee 6y ago
  May I ask examples of things that you are not confident sharing with the IRS, that you do not have the obligation to share with the IRS, and that can affect the taxes you owe? In my (foreign) mind, whatever might affect your obligation final number you are legally required to do so (either preemptively or when asked), so I don't fully understand.
  - sokoloff 6y ago
    Many things that I tell my preparer are needed later, but not now. (Tax basis for RSUs that vested. Value of capital improvements to my property.) Other things are needed only if we elect to method A of calculation, but not if we use method B of calculation. So I give him all the data; he computes my obligations using method A and method B, chooses the better option, and reports only the data needed to support that method's calculations. I pay my preparer to be an expert in tax code, to represent me in any audits, and incidentally to prepare my return correctly. Part of that expertise is that I don't have to be an expert, so I tell him everything and he politely rolls his eyes and smiles when I dump irrelevant things on his desk.
deleted 6y ago
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by astura 6y ago

dave5104 6y ago

Not to mention, I'm sure the "happy path" will accommodate a significant number of tax payers.

astura 6y ago
Currently, probably >85%, given that ~90% percent of households took the standard deduction in 2018.
- ghaff 6y ago
  The standard deduction is pretty high these days. I'll probably be back to not itemizing next year but my taxes are certainly not simple.

robert_foss 6y ago

This is how it is done in Sweden. And after having lived in 2 other countries it is clearly the way to go. The tax authority sends you a summary and you just approve it.

sfteus 6y ago
This always made the most sense to me. You get your return and review it; sign off if it's good, modify and return it if you have more claims, something is wrong / missing. I'd wager the majority of people wouldn't have a reason to submit a revised return. And if the federal government generated your return, hopefully that would give them reason to automatically exclude you from audit, (ideally) reducing the burden of auditors.
dtech 6y ago
Works this way in the Netherlands too, you login on a website and just click through the information they have pre-filled in normal cases.
vinkelhake 6y ago
As a Swedish expat in California I cringe everytime tax season comes. Both because of how annoying it is, and because I know how simple it can be.
- deleted 6y ago
  [deleted]

sokoloff 6y ago

There is a much greater depth of detail that I provide to my tax preparer than I'd be willing to share with the IRS. I tell my tax preparer everything and have perfect confidence that my taxes will be prepared correctly and in accordance with the tax code and that nothing which is not required to be disclosed will be disclosed. Much of what I provide to my preparer is irrelevant to my tax obligations and anything that's irrelevant I would prefer not be disclosed. I'm mostly a W-2 schmo without any particularly complex business arrangements and with a spouse who employs themself in a consulting capacity, puts the statutory maximum into tax-deferred accounts every year, and we have minor kids who are required to file returns due to kiddie tax laws. I can imagine many people would rather pay a high three or low four-figure per year bill for tax prep and representation rather than give the IRS full access to their financial lives. I do support (and strongly so) the idea that the IRS could provide simple, default tax prep based on the information they receive. Where I break is what escalation path should exist; I think there must remain an effective and private escalation path for more complex scenarios. (In many ways, that makes it even easier to implement. Make the simple case automated-by-default. Punt all the complex cases to the current system.)

harperlee 6y ago
May I ask examples of things that you are not confident sharing with the IRS, that you do not have the obligation to share with the IRS, and that can affect the taxes you owe? In my (foreign) mind, whatever might affect your obligation final number you are legally required to do so (either preemptively or when asked), so I don't fully understand.
- sokoloff 6y ago
  Many things that I tell my preparer are needed later, but not now. (Tax basis for RSUs that vested. Value of capital improvements to my property.) Other things are needed only if we elect to method A of calculation, but not if we use method B of calculation. So I give him all the data; he computes my obligations using method A and method B, chooses the better option, and reports only the data needed to support that method's calculations. I pay my preparer to be an expert in tax code, to represent me in any audits, and incidentally to prepare my return correctly. Part of that expertise is that I don't have to be an expert, so I tell him everything and he politely rolls his eyes and smiles when I dump irrelevant things on his desk.

deleted 6y ago

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