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In theory, yes. But few people actually do because it is a painful experience. The IRS' documentation isn't actually bad, it is just that the tax system itself
by Someone1234 5y ago
In theory, yes.
But few people actually do because it is a painful experience. The IRS' documentation isn't actually bad, it is just that the tax system itself is incredibly (and needlessly) complicated.
For example, you'd need to hand-enter every stock trade (even automated re-investments) even though your broker likely already electronically sent this information to the IRS. Using a digital solution they can often log into your broker and auto-import everything.
For how under-budget the IRS is and how bad the tax system is, they do ok, but the whole thing needs a massive overhaul but there is money in politics keeping it bad in order to profit private companies (plus there's a certain demographic that "hating taxes" is a political position that needs to be kept up with, essentially self-reinforcing-itself).
- crooked-v 5y agoAlso, one might ask "why doesn't the IRS just send you a pre-filled copy of the forms, and you only correct them if they're wrong?". The answer is "because Congress passed a law saying they can't".
- zentiggr 5y agoDoing the next step of the root cause analysis leads to "Intuit lobbied Congress and the IRS hard enough that they passed a law, and the IRS conspired to change their procedures".
- rootusrootus 5y agoExcept Intuit hasn't paid anywhere near enough in lobbying money to have that kind of effect. Grover Norquist is the last step in your root cause analysis.
- paulpauper 5y agowhat is to stop someone from just underreporting and blaming laziness or the process being too complicated. either the govt. audits it themselves or does nothing. the benefit of the doubt is on your side.
- LanceH 5y agoLate fee interest and penalties are on their side. It's statutory that you get it right, intent doesn't matter.
- UncleMeat 5y agoWe used to have to hand enter everything anyway. The auto-import stuff is fairly new for all of the tax filing products. TurboTax also fucks up the auto import for my RSUs. Every single year there are a handful of people on the financial planning groups posting "wtf I got a letter from the government saying I owe $80,000" and it is uniformly because one of these services' autoimport system set all of the cost bases for RSUs to $0. The end result is that I hand-enter anyway, even when paying $120 to Intuit for the privilege.
- junar 5y ago> For example, you'd need to hand-enter every stock trade (even automated re-investments) even though your broker likely already electronically sent this information to the IRS. This is not true for most folks, who can use one of two exceptions that allow summarizing. Exception 1 allows you to simply report totals on Schedule D. Exception 2 has you file Form 8949 with summarized rows, as long as you attach a statement with the detailed transaction info (the brokerage 1099-B generally suffices). https://www.irs.gov/instructions/i8949#en_US_2021_publink1000306206 https://www.irs.gov/instructions/i8949#en_US_2021_publink100... These are the very same exceptions that tax software uses.