4 ms·

All taxes are so simple as to be computational and therefore susceptible to automation Anyone who says otherwise is corrupt

rcme 4y ago
What about itemized deductions? How can you automate that?
- Caligatio 4y ago
  The number of people that itemize has dropped significantly after the 2017 tax changes. A quick search shows that it used to be around 30% of filers itemized, now it's 11%. It would be easy for the government to send you its automatic, non-itemized calculations and give you the option of itemizing.
- kelnos 4y ago
  Some of them you can. Tax-exempt orgs that take tax-deductible donations will usually give you a donation receipt. It wouldn't be unreasonable to require that they also fire off a copy (well, in a standardized form) to the IRS as well. Mortgage lenders already send a standardized form 1098 for the mortgage interest deduction. Things like out-of-pocket medical expenses and business expenses would have to be done manually. But that's fine! Automating 80% of the work is still better than automating none of it. And it would be 100% for the people who don't itemize (which, as I understand it, is the vast majority).
fisherjeff 4y ago
I am not corrupt and I say otherwise. The US tax code has a massive amount of complexity and tons of corner cases and grey areas. I wish that were not the case but politics being politics, here we are.
- csomar 4y ago
  It is true, however, when you are an employee and don't have any side dealings (like freelancing or trading stocks).
  - fisherjeff 4y ago
    Oh absolutely – it just does not extend to every single taxpayer.
    - kelnos 4y ago
      Sure, but the vast majority of taxpayers just have W-2 income, and that's it. Even for many of those who have more, it still can be done automatically (1099nec, 1099misc, 1099r, 1099b, 1099div, 1099int, etc. are all filed with the IRS already). Even if 20% of taxpayers still had to do their own returns from scratch -- which almost certainly would not be the case; virtually no one would have to do them from scratch -- automating it for the 80% would still be incredibly valuable. Even with a manual check/amend/approve step. It would save taxpayers tons of time and billions of dollars of tax-prep fees.
- kelnos 4y ago
  "Susceptible to automation" doesn't mean that it's required that it's done without a manual fixup and approval step. You can absolutely automate the US tax code, and generate perfectly-correct tax returns for a majority of the people who have to file. Automation doesn't have to be perfect for everyone, though, in order to be worhtwhile; it just has to reduce the work people have to do. Even if it couldn't produce a perfect tax return for me, it would still be much easier if all I had to do was (for example), click a few buttons to upload a few tax-deductible donation receipts, enter in the amounts, read through the rest of the return, and click "Accept".
1101010010 4y ago
[flagged]
- kelnos 4y ago
  Bad argument. "All taxation is theft" is an opinion. "Tax returns can be automated" (either 100% or to some lesser degree) is a provable or disprovable matter of facts. I would tend to agree that it's a provable fact that tax preparation can be automated (not 100%, but enough to be worthwhile and time- and money-saving). Someone who states otherwise is likely to have some ulterior motive for saying so, likely a corrupt one.
gtop3 4y ago
Did you know you can deduct sales tax. Even on cash transactions. How would you automate sales tax deductions for cash transactions? I always deduct sales tax, because it saves me hundreds of dollars. I always pay cash and ask for receipts from small businesses because paying cash helps them avoid the VISA fee and helps pad their margin. This is one of a dozen things I do on my taxes that I don't see any path forward for automation. It's not that it's impossible to automate, but do we really want virtually every transaction going to at least 1 state and the federal government. Do we really want every transaction to have both parties identified? I'd rather keep the option of financial privacy open and just do a few hours of paper work every year.
- lazyninja987 4y ago
  what is 'deduct sales tax' mean? sorry, i am new to taxes. can you add more info? is it something an individual can use?
  - kelnos 4y ago
    Yes, in the US at least, you can deduct state and local taxes from your taxable income. Most people use it to deduct state/local income and property taxes, but you can also deduct the amount of any sales tax paid. (Since 2017, though, there's a $10,000 cap on the total amount of state and local taxes you can deduct. This cap will fortunately expire in 2025 if -- fingers crossed -- it's not renewed.) The caveat is that if you deduct sales tax, you are then not allowed to deduct state/local income tax. And of course it can be quite a bit more work to keep track of all the sales tax you pay in a year, vs. income tax.
- nichohel 4y ago
  (This relates to US taxes only) This very likely does not make a difference on your total tax bill, especially now that other deductions are limited (like mortgage interest). Also, even if sales tax paid did make a difference on your tax paid, there is a simple calculator that estimates your sales tax paid that you can use instead of summing sales tax over all transactions. If you want to play around with different scenarios, I recommend you try the tool "Excel1040" [1]. It is free but consider a donation. Works great in LibreOffice Calc but pay attention to the loading instructions. [1] https://sites.google.com/site/excel1040/home https://sites.google.com/site/excel1040/home

rcme 4y ago

What about itemized deductions? How can you automate that?

Caligatio 4y ago
The number of people that itemize has dropped significantly after the 2017 tax changes. A quick search shows that it used to be around 30% of filers itemized, now it's 11%. It would be easy for the government to send you its automatic, non-itemized calculations and give you the option of itemizing.
kelnos 4y ago
Some of them you can. Tax-exempt orgs that take tax-deductible donations will usually give you a donation receipt. It wouldn't be unreasonable to require that they also fire off a copy (well, in a standardized form) to the IRS as well. Mortgage lenders already send a standardized form 1098 for the mortgage interest deduction. Things like out-of-pocket medical expenses and business expenses would have to be done manually. But that's fine! Automating 80% of the work is still better than automating none of it. And it would be 100% for the people who don't itemize (which, as I understand it, is the vast majority).

fisherjeff 4y ago

I am not corrupt and I say otherwise. The US tax code has a massive amount of complexity and tons of corner cases and grey areas. I wish that were not the case but politics being politics, here we are.

csomar 4y ago
It is true, however, when you are an employee and don't have any side dealings (like freelancing or trading stocks).
- fisherjeff 4y ago
  Oh absolutely – it just does not extend to every single taxpayer.
  - kelnos 4y ago
    Sure, but the vast majority of taxpayers just have W-2 income, and that's it. Even for many of those who have more, it still can be done automatically (1099nec, 1099misc, 1099r, 1099b, 1099div, 1099int, etc. are all filed with the IRS already). Even if 20% of taxpayers still had to do their own returns from scratch -- which almost certainly would not be the case; virtually no one would have to do them from scratch -- automating it for the 80% would still be incredibly valuable. Even with a manual check/amend/approve step. It would save taxpayers tons of time and billions of dollars of tax-prep fees.
kelnos 4y ago
"Susceptible to automation" doesn't mean that it's required that it's done without a manual fixup and approval step. You can absolutely automate the US tax code, and generate perfectly-correct tax returns for a majority of the people who have to file. Automation doesn't have to be perfect for everyone, though, in order to be worhtwhile; it just has to reduce the work people have to do. Even if it couldn't produce a perfect tax return for me, it would still be much easier if all I had to do was (for example), click a few buttons to upload a few tax-deductible donation receipts, enter in the amounts, read through the rest of the return, and click "Accept".

1101010010 4y ago

[flagged]

kelnos 4y ago
Bad argument. "All taxation is theft" is an opinion. "Tax returns can be automated" (either 100% or to some lesser degree) is a provable or disprovable matter of facts. I would tend to agree that it's a provable fact that tax preparation can be automated (not 100%, but enough to be worthwhile and time- and money-saving). Someone who states otherwise is likely to have some ulterior motive for saying so, likely a corrupt one.

gtop3 4y ago

Did you know you can deduct sales tax. Even on cash transactions. How would you automate sales tax deductions for cash transactions? I always deduct sales tax, because it saves me hundreds of dollars. I always pay cash and ask for receipts from small businesses because paying cash helps them avoid the VISA fee and helps pad their margin. This is one of a dozen things I do on my taxes that I don't see any path forward for automation. It's not that it's impossible to automate, but do we really want virtually every transaction going to at least 1 state and the federal government. Do we really want every transaction to have both parties identified? I'd rather keep the option of financial privacy open and just do a few hours of paper work every year.

lazyninja987 4y ago
what is 'deduct sales tax' mean? sorry, i am new to taxes. can you add more info? is it something an individual can use?
- kelnos 4y ago
  Yes, in the US at least, you can deduct state and local taxes from your taxable income. Most people use it to deduct state/local income and property taxes, but you can also deduct the amount of any sales tax paid. (Since 2017, though, there's a $10,000 cap on the total amount of state and local taxes you can deduct. This cap will fortunately expire in 2025 if -- fingers crossed -- it's not renewed.) The caveat is that if you deduct sales tax, you are then not allowed to deduct state/local income tax. And of course it can be quite a bit more work to keep track of all the sales tax you pay in a year, vs. income tax.
nichohel 4y ago
(This relates to US taxes only) This very likely does not make a difference on your total tax bill, especially now that other deductions are limited (like mortgage interest). Also, even if sales tax paid did make a difference on your tax paid, there is a simple calculator that estimates your sales tax paid that you can use instead of summing sales tax over all transactions. If you want to play around with different scenarios, I recommend you try the tool "Excel1040" [1]. It is free but consider a donation. Works great in LibreOffice Calc but pay attention to the loading instructions. [1] https://sites.google.com/site/excel1040/home https://sites.google.com/site/excel1040/home