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It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absur
by ShadowBanThis01 3y ago
It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically.
And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem.
But... didn't Congress pass some corrupt legislation years ago that made it illegal for the government to set up a tax-filing Web site? What happened to this: 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-...
- lelandfe 3y agoNever happened. Thanks Propublica! https://www.propublica.org/article/irs-reforms-free-file-program-drops-agreement-not-to-compete-with-turbotax https://www.propublica.org/article/irs-reforms-free-file-pro...
- ShadowBanThis01 3y agoIndeed. This is why a free press exists. Too bad fewer and fewer people appreciate it.
- lesuorac 3y ago> [1] on April 22, 2019 ProPublica published an exposé heavily criticizing the implementation of the Free File Program, which the bill would codify. The House then removed the Free File provision from the bill, which passed the House and Senate and was then signed by the president. [1]: https://en.wikipedia.org/wiki/Taxpayer_First_Act https://en.wikipedia.org/wiki/Taxpayer_First_Act
- ShadowBanThis01 3y agoThanks! Just read through all the provisions in the law and indeed noted the lack of any apparent reference to this disgraceful scheme.
- jandrese 3y agoLooks like the bill as passed didn't include that provision? https://www.congress.gov/bill/116th-congress/house-bill/3151 https://www.congress.gov/bill/116th-congress/house-bill/3151
- bubbleRefuge 3y agoNo to mention the brain drain/opportunity costs of employing people working in the tax prep software industry when they could be solving more other more useful problems.
- pstuart 3y agoCheck out Grover Norquist and his goals -- this tax hell is intentional.
- petsfed 3y agoThis sounds kind of like a conspiracy-theory, so it's worth providing a source. Norquist himself, and his organization Americans for Tax Reform, believe that making tax payers go through the process of preparing their tax return forces us to audit our comfortability with paying taxes[0],[1]. If, on the other hand, we just signed off on numbers that the IRS provided us every April, we'd be less aware of, and therefore less likely to protest, increases in taxes. This isn't a subtle, arguably-the-cruelty-is-the-point sort of situation, this is a I'm-not-using-anesthetic-because-I'm-concerned-you-aren't-sufficiently-afraid-of-the-thresher-that-just-cut-your-foot-off-when-I-ran-you-over-with-it. I'm not a big fan of paying taxes, and I don't like it when my taxes go up. But I already feel that when I look at my paystub, or pay property taxes. The whole effort to make tax returns harder so people hate taxes hinges on the idea that most people are completely unaware of taxes until April 15th rolls around. It's cynical in the extreme, and that's really off-putting to me. 0. https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Opposition_to_free_automatic_tax_return_filing_and_other_efforts_to_make_tax_filing_easier https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Oppos... 1. https://govinfo.library.unt.edu/taxreformpanel/meetings/meeting-05172005.html https://govinfo.library.unt.edu/taxreformpanel/meetings/meet...
- koolba 3y ago> But I already feel that when I look at my paystub, or pay property taxes. Unless you’re cutting a check in person you’re arguably not feeling it as much as you should. It’s like how replacing cash toll booths with electronic debit hides the true price you’re paying on the highway.
- jcranmer 3y agoI doubt very many people know how much taxes they actually paid in 2022, even after the pain of filling out taxes. Instead, the number they know and remember is the size of the refund check (or the tax check they have to send out) in April. And the size of that check has relatively little to do with your actual tax rate, instead being driven by the withholding tables instead.
- gamblor956 3y agoAnd then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. Everyone thinks that they can come up with a much better tax system, and they always start with something super simple that meets their tax needs. But a simple system that meets one person's tax needs is usually not so simple, fair, or efficient for other people. And when you take all their needs into account when you redesign the system...you end up with something pretty close to what we have right now. For example, try designing a tax system that is both fair and efficient with respect to agricultural income and tech income (this is a fairly common assignment in university tax programs). It won't be simple. And that doesn't even get into how to reconcile the tax treatment of business income with the tax treatment of individuals, or the many ways they earn and spend income, or the complexities of other types of businesses (like manufacturing, retailing, resource extraction, in-person services, etc.).
- uticus 3y ago> For example, try designing a tax system that is both fair and efficient with respect to agricultural income and tech income... It won't be simple. I love these armchair opportunities for college-level challenges without the admission fees, I'll bite. Step 1: disallow corporation as a legal taxable entity, private ownership only. Step 2: Subtract expenses from income. Step 3: Divide by 10. Step 4: If more than zero, send a check. "Fair and efficient" in terms of opportunity is easy. In terms of outcome is a fool's game IMO
- dunmalg 3y agolol, step 1 destroys the entire stock market!
- uticus 3y agoI know! Wait did I fail the class, or pass?
- cyberax 3y ago> Subtract expenses from income. But what about investments and assets? A car that you bought for the company has a limited lifetime. So its value is slowly decreasing, should that be considered an expense? What about R&D? We want to incentivize it, so that companies do more of it. Etc., etc.
- _yb2s 3y agoThe weird thing is the IRS already knows my taxes better than I do… a few times I’ve made mistakes inputting forms or forgot to put something in, and I will always get a letter from them about it. They’ve already done my taxes so they should just send me a bill and not waste my time, possibly with the option to submit extra details they are missing like deductions… but that should be an option for people that need it. There is no reason for a w2 wage earner taking the standard deduction to need to file taxes.
- RandallBrown 3y agoHow would you know if you're going to take the standard deduction without doing your taxes? I'm fairly certain the federal government doesn't know about all my deductions.
- jonny_eh 3y ago> possibly with the option to submit extra details they are missing like deductions
- Kalium 3y agoFor the most common and most impactful ones, like 1098s, the IRS is aware because they are sent the information directly. Are they going to be aware of all deductions in all cases? You are absolutely correct, there's no way that's correct.
- bombcar 3y agoThe standard deduction is now so high ($25,900) that for the vast majority of standard wage-slave Americans, it will not be reached. > In 2017, 47.1 million taxpayers itemized deductions, relative to 15.3 million in 2018. This dramatic shift maps to a more than 19 percentage point drop in itemizers as a percentage of all taxpayers, from 30.90% to 11.47%. The majority of this was people's mortgage deduction went from being more than the standard deduction (so itemization is worthwhile) to being less (so it's not worthwhile). You can roughly estimate what your itemized deduction might be.
- mynameisvlad 3y ago
- cft 3y agoThis is a dangerous path. First this, next the government just sends you the tax bill, without you needing to file (and you can dispute it), and then CBDC where every microtransaction is surveyed and sanctioned (or not).
- astrange 3y agoYou don't need "CBDC" for that, you're describing the current European tax system with a VAT. All business invoices are sent through the tax office, but you get paid to do it.
- testfoobar 3y ago> And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. You can generalize this to the funding of the US government. The system obfuscates the stark reality: the US government spends resources faster than it collects them. It makes up the difference it two ways: deficit spending and off-the-books liabilities (SSA and Medicare being the biggest). Inflation is a solution to these problems.
- rcktmrtn 3y ago> Inflation is a solution to these problems ... inflation in combination with hegemony. My understanding is that if the US wasn't calling so many shots on the world stage, other countries would be less willing to tolerate us inflating away the US dollars they hold. But as "the global reserve" currency (for now), they have no choice but to grin and bear it, desperately try not to inflate their own money supplies to deal with the loss in value. This is basically the truth behind MMT. Inflation actually can get you "free" money, but only because you're basically forcing it out of other economies by virtue of holding all the guns and oil.
- codegeek 3y ago"that has already been reported to the government" This statement is mostly true and your point remains but there is a small percentage of Americans who have complex stuff like a Business, multiple non-W sources, investments, Itemized deductions etc. For those, IRS cannot just figure out everything themselves. A good solution is for IRS to automate those 90% of cases and for the rest, let them file with CPAs and tools as they do now. Source: I run a business (well 2 now with a much smaller one) and my taxes are never simple. I wouldn't be one of those Americans with straight calculated stuff. I like my deductions and options but also pay a lot to CPA to handle this shit.
- jabroni_salad 3y agoIt was California ReadyReturn that got murdered. Imagine building a tax collection product that attains a 99% satisfaction rating from the people that pay those taxes and then having it get killed by legalized highwaymen. Even today the top google results return dubious totally-not-funded-by-intuit sources such as "the tax foundation".
- jerrygenser 3y agoIt's not absurd. It's because these tax prep companies spend a lot of money lobbying and putting those congresspeople in office.
- _8j50 3y ago> regurgitate tax information that has already been reported to the government How does the government know my non-compensated travel and moving cost, wfh expenses, cash charity donations,etc...? If people like you get the option to file directly with the IRS, fine by me so long as you don't make the rest of us pay more by losing the ability to play the game and save money.
- astrange 3y ago> wfh expenses Was that ever deductible? You don't get the home office deductions unless you're self employed. > cash charity donations That basically isn't deductible for anyone anymore since nobody itemizes.
- _8j50 3y agoFor both points, that's my point. You get your guy to figure that out for you. Knows tax laws and asks you questions to see what you can prove,etc...I've itemized when a return was guaranteed before to maximize it.
- TheCondor 3y agoI'll do you one better, maybe two better... Why can my bank and credit card vendors tell me "up to the second" the status of my account. I use a credit card and get an alert on my Apple Watch. The IRS could have an app that shows it in real time (say up to the day) how much tax you've paid and if they think you'll owe more or get a refund based upon what they know at that point and time and what they know from last year. Second, why do I need to give my employer my SSN and several forms of ID? Couldn't I share some sort of token that the IRS could give them with my name and maybe a picture and all the instructions embedded on how to withhold, how much to withhold, etc. Maybe it could be a unique identifier per job. I get a picture id but they shouldn't need my SSN. It can't quite be just an opaque QR code but it could be something pretty similar.
- godelski 3y agoMaybe this comment can spur several startup ideas. Why is it that we can have highly advanced AI, phones, and monitoring systems but so much of what we do is as if we're living before the internet? Obviously politics (not just a left/right divide, but even at local and budget levels) plays a role. But let's be real, street lights (and cross walk) should be algorithmic and sensor driven, stores should have trivially developed web interfaces (AI can help this just from SAM), SSN being used for identification but also not (and being terrible at it), and so much more. This is literally every industry and ESPECIALLY anything that the government does. I don't want to hear voting online, but please talk to me about DMV online (not literally to me). These things aren't flashy, and maybe that's the problem, but I hate living in both the 22nd century and the 17th at the same time (exaggeration).
- TheCondor 3y agoThat's my wish. I'd think the 70% or whatever the number is that takes the standard deduction could be satisfied with a fairly simple app. Businesses, certain business principals, individuals with higher incomes have more complicated taxes but I would think there could be some standard patterns. I also think that most families not in that 70% (or whatever the number is) probably have fairly similar taxes 3 out of 5 years or 4 out of 5 years. If not, maybe there are some loop holes we should look at or some alterations to the tax code to allow for this. Quick books and peach tree and do an awful lot for a lot of businesses, I know it can be done...
- makmanalp 3y ago> But... didn't Congress pass some corrupt legislation years ago that made it illegal for the government to set up a tax-filing Web site? What happened to this: https://www.propublica.org/article/congress-is-about-to-ban- https://www.propublica.org/article/congress-is-about-to-ban-... Thanks for pointing this out - looking at the responses, folks blaming congress might have a point but I'm also surprised that this thread isn't directing more of the frustration to intuit and others involved in the deliberately confusingly named "free file alliance" - an industry coalition that's nominally providing a free filing option that's hidden / limited / difficult enough to use that very few people actually do despite it being free. The answer to your question is that initially yes, it was banned as part of a mutual MOU, but it is not anymore. The rest is in here: https://www.propublica.org/article/irs-reforms-free-file-program-drops-agreement-not-to-compete-with-turbotax https://www.propublica.org/article/irs-reforms-free-file-pro... Here's more on the subject: - This one has internal slides from intuit https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free https://www.propublica.org/article/inside-turbotax-20-year-f... - This is a report prepared by a left think tank (pointing this out as a disclaimer) that has a lot of details from earnings calls and such: https://big.assets.huffingtonpost.com/athena/files/2023/05/15/64623af9e4b005be8ff4f932.pdf https://big.assets.huffingtonpost.com/athena/files/2023/05/1... - This one details on the influence of the "revolving door" of lobbyists taking governemnt positions on the IRS' policymaking https://www.opensecrets.org/news/2023/05/turbotax-owner-intuit-ramps-up-lobbying-as-debate-over-government-run-free-tax-filing-heats-up/ https://www.opensecrets.org/news/2023/05/turbotax-owner-intu...
- nonethewiser 3y agoFreetax USA is great. How could this be better? Free I guess. So if the software is as good (probably isnt) then its a marginal improvement. The problem is the rules are complicated. Except this is only a problem because people dont want to pay more in taxes. Virtually all the complexity comes from opportunities not to pay taxes. Its difficult because you need to figure out how much you DO owe and be sure you qualify. In order to simplify taxes you’re going to raise taxes in an uneven and non deliberate way.
- gigatexal 3y agoAgreed. Intuit and it’s “competitors” need to stop fighting this and I’m glad to see this being a thing.
- lizardking 3y agoI wrote some tooling for one of the major tax preparation firms to import returns from our competitors into our system, so you wouldn’t be locked into one provider or another. It was a fun project, but it would be better if it wasn’t necessary!