11 ms·

The 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 alw

• RandallBrown 3y ago
  How 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 ago
    For 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 ago
    The 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
    In most countries that have implemented such a system, the government prepares your taxes for you, and then you ok them or ask for adjustments. The vast majority that use standard deductions would just approve it, while those that know their deductions would exceed that can itemize it. Why wouldn't such a system work here? It's not like the act of doing your taxes is what makes your realize you're over the standard deduction. Most people will know if they've done standard or itemized in the past and act off that.
    • RandallBrown 3y ago
      > It's not like the act of doing your taxes is what makes your realize you're over the standard deduction. That is exactly how I figured out I should itemize my taxes this year.
      • mynameisvlad 3y ago
        What part of the process prompted you to do that? TurboTax asking you if you want to itemize or not? That's pretty much the extent most Americans think about itemization as it stands, and whether it comes from a tax software or the government, the result is going to be the same.
  • cstoner 3y ago
    The vast majority of people take the standard deduction, so offering a "here's what we think you owe, but if you disagree feel free to do the full return" form would be a huge efficiency gain. Your comment seems like a prime case of perfect being the enemy of good.
    • jrochkind1 3y ago
      > The vast majority of people take the standard deduction Unless they are a homeowner, probably. Part of the issue is that the US tax code is a lot more complex than most countries. (And the homeowner-targetted deductions are kind of insane and bad policy too). Still, I don't disagree with the basic premise. They probably know enough to know if itemizing your homeowner-related things would be better for you, and do it that way. You can ask for adjustments, or you could always ignore what they calculate for you and do it all yourself from scratch if you wanted to, a thing I believe you _can_ do in European countries that generally calculate your income taxes for you? Also, I wish our tax code werent' so insane.
      • lotsofpulp 3y ago
        90% of federal tax filers in the US do not itemize, which includes the majority of home owners.
        • tivert 3y ago
          > 90% of federal tax filers in the US do not itemize, which includes the majority of home owners. Isn't that a relatively recent thing? IIRC, the standard deduction was massively increased a few years ago.
          • mikestew 3y ago
            Isn't that a relatively recent thing? Yes, it is. What difference do you think that makes in the present day?
            • 3y ago
  • justapassenger 3y ago
    With current tax code, not taking standard deduction is more of an exception than a rule. It has to be supported, and you should be able to change it. But there's really no reason today for why IRS doesn't send you "this is what we think you owe, based on this data that we have. Click to accept or add more data". That process would hugely simplify taxes for majority of Americans and wouldn't impact people who have more complex cases.
    • jghn 3y ago
      I itemize, but it doesn't save me a ton. I would probably still click that button just to save me the mental headache and time spent.
  • johnny99k 3y ago
    This is why making it this easy is a win for the government. 99% of the people are lazy and will just let them do it, basically giving them free money.
    • Taywee 3y ago
      Less money to Intuit and H&R Block and more in my pocket and my government's is a win to me. I'm all for productive businesses, but I'm sick of these tax companies influencing public policy and collecting rent by solving a problem that they are intentionally keeping alive. Imagine a landscaper doing doughnuts on your lawn and then telling you to pay him to fix it, and that's roughly how I view Intuit.
    • deleted 3y ago
      [deleted]
  • ilyt 3y ago
    Here in Poland the tax form is pretty much "here is what we know, re-type that into the form and add whatever is missing for deducations". Which you can use free app to download, file and send the filed one. weirdly enough official site also have instruction on how to use PlayOnLinux to run it under Linux
    • Taywee 3y ago
      That is really interesting. I wonder if they considered Linux too late in development to shift to something platform agnostic, or just decided that Wine was reliable enough for them to depend on it. It's interesting that anything other than MacOS and windows is even considered at all, even just in the instructions.
    • isbvhodnvemrwvn 3y ago
      If you don't want to change anything you can just submit it with one click.
  • cyberax 3y ago
    The government knows about your main itemized deductions like mortgage interest. Then it can just compare it with your standard deduction and select the one that is greater. Of course, you might still want to amend that, but as the first pass it can be quite accurate.
  • mikestew 3y ago
    How would you know if you're going to take the standard deduction without doing your taxes? People wealthy enough to even think that their deductions might exceed the standard deduction are not only in the vast minority, they're also wealthy enough that paying for TurboTax isn't an issue because they have their accountant do the taxes. IOW, you're optimizing for the exception, not the majority case.
    • iends 3y ago
      Two DINKs who live in HCOL areas and donate 10% of their income to charity should be thinking about itemizing, though. We’re talking 250k in salary or so, right?
      • mikestew 3y ago
        Your point being...? What percentage of people do you think fit your description? I stand by my "vast minority" statement, if that's what you're driving at. HN is not the general U. S. population.
  • Rebelgecko 3y ago
    Let's not let perfect be the enemy of the good here. Per the IRS's stats, 89% of people take the standard deduction. For those who itemize, the government usually knows about most the things you're itemizing. I'm itemizing this year because of 3 things: taxes paid, mortgage interest, and charitable donations. The government already knows about 2 of those, so they could send me prefilled forms that are 95% complete (W-2, investment 1099, mortgage 1098, mortgage 1099 and other bank account 1099-ints, my form 5498 for my IRA, property taxes, etc). I'd much prefer only having to fill in my charitable donations. It would change a job that takes a couple hours into one that takes maybe 15 minutes.
  • recursive 3y ago
    By deciding to do it. Whether it's economically rational is another question. I've never calculated my deductions. I assume it's ok. But it's a guess, as I've never checked.
• RajT88 3y ago
  In fact, other sane industrialized nations have really got it figured out: https://www.pbs.org/newshour/show/dreading-taxes-countries-show-us-theres-another-way https://www.pbs.org/newshour/show/dreading-taxes-countries-s...
  • d--b 3y ago
    Not all though. I developed admin-phobia since I moved back to France. Being a contractor here is such a FUCKING nightmare compared to UK and US. Sure the US could do without turbotax. BUT AT LEAST YOU GUYS HAVE TURBOTAX
    • ethbr0 3y ago
      The only thing worse than a private monopoly is a public one.
      • ericmay 3y ago
        In the case of taxes in the United States this doesn’t really follow because if the government says you owe $x.xx then you have to go through the bureaucracy either way to either pay or dispute the charge. For most people (simple wage earner) TurboTax and other software is just an additional regulatory tax and no different than the government except that it takes money from citizens. A government has a monopoly on taxation by definition or else it can’t be a government so calling it a public monopoly doesn’t make a lot of sense.
        • siftrics 3y ago
          ethbr0 is referring to monopolies enforced by law for private companies; they're not trying to point out the government itself is a monopoly.
        • ethbr0 3y ago
          The difference is that if the IRS provided the only filing solution AND adjudicated taxes, there'd be no adversarial tension. Right now, the IRS is forced to establish some sort of data interchange format and adjudicate incoming tax filings equally, because they're required to work with TurboTax et al. (even if only required from a practical standpoint). If they also provided the only filing solution, that pressure would be gone. IMHO, the best possible outcome is definitely IRS-supplied free file + private options, if users would like. Keeps everyone honest and on their toes.
• deleted 3y ago
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• whimsicalism 3y ago
  My partner and I are both W2 earners and filing our taxes takes like under half an hour. Are we doing something wrong? It seriously does not seem hard to file taxes.
  • binarymax 3y ago
    No you’re doing everything right! The point is that you shouldn’t even need to do anything. The IRS already has your information. Unless youre changing something that they won’t know about (for example not using the standard deduction), then ideally you would get an automated return and possible refund without taking any action.
    • whimsicalism 3y ago
      The point is that I might report something that they aren't aware of. It makes sense to me, the IRS does not know everything and strategically witholding what you know will lead people to report things that you don't know about.
      • Taywee 3y ago
        In countries that don't force every citizen to file, you still can report things they aren't aware of and still can do your taxes manually if you choose. The majority of the population doesn't know anything about their taxes that the IRS doesn't. Why force everybody through a song and dance that only is of service to the exceptions (and a couple very large tax filing corporations who lobby hard against automatic taxes)?
  • all2 3y ago
    Do you have investments or businesses of any type? Do you itemize your deductions? My biggest time sink this year was sorting out how to file crypto gains/losses. After two hours of struggle, I found that I had to pay income tax on about 15 dollars of capital gains.
    • whimsicalism 3y ago
• chc 3y ago
  There have been many proposals along these lines, but Republicans in Congress don't like it because they believe making it painful to file taxes will win support for their generalized opposition to taxes.
  • AnthonyMouse 3y ago
    Then give them something they want, like have the IRS send everyone a summary just exactly how much in taxes they actually pay. Let people know the "refund" they get is not money from the government but rather money the government took from them several months ago and is only getting around to giving back now. Make a clear comparison between the amount they're getting back and the amount the government kept, which for most ordinary people is thousands of dollars a year. Assuming the problem is actually ideological opposition from Republicans, and not campaign funding, because then it would be bipartisan: https://www.opensecrets.org/orgs/intuit-inc/summary?id=D000026667 https://www.opensecrets.org/orgs/intuit-inc/summary?id=D0000...
    • astrange 3y ago
      Corporations can't donate to campaigns. Anyone using this to make a point is lying. That page shows who employees of the companies have donated to. (And the politicians aren't actually "bought" by it. It's more like they already agreed, and maybe they're being paid to stay politicians instead of getting a better paying less annoying private sector job.)
      • AnthonyMouse 3y ago
        Employees of corporations donating to campaigns when the dissolution of that company's business model would affect their employment is pretty much the highest degree of alignment you're going to see between corporations and their employees. And corporations can't donate to "campaigns" but they can perfectly well donate to PACs aligned with campaigns. > And the politicians aren't actually "bought" by it. It's more like they already agreed, and maybe they're being paid to stay politicians instead of getting a better paying less annoying private sector job. But nobody said they were bought. It's not corruption if it's legal, right? The problem is the systemic bias it introduces. Politicians need to raise money to stay in office, so they have to appease whoever has money. So politicians who appease special interests have an electoral advantage, win more elections and constitute a majority of the legislature.
• kevin_thibedeau 3y ago
  > There is no reason for a w2 wage earner taking the standard deduction to need to file taxes. Unreported gambling winnings or a low revenue side gig aren't tracked by the IRS.
  • Taywee 3y ago
    And it should be required to file a tax return only when those kinds of situations actually apply to you. The majority of the population doesn't actually have those concerns.
  • peoplenotbots 3y ago
    Are Genshin Impact microtransactions a tax write off?
    • jrockway 3y ago
      There are carefully crafted rules to make things like in-game winnings and frequent flyer mile accruals non-taxable. I think the key rule is that you can't convert the in-game currency to real cash; this is why airlines close your frequent flyer account if you sell miles or offer to give other people your awards for money. They probably don't care, but the IRS does. How this all changed with cryptocurrency, I don't know. I think taxes are all about what's written down and what logically makes sense. If you pay someone $1000 to do a job, they have to pay taxes on that. If you invite your friends over and spend $1000 on food that they eat, they don't have to pay taxes on that. I don't know why.
  • lesuorac 3y ago
    Yes, a non-w2 wage earner has income that is not tracked by a w2 ... The general issue with gambling wins is not that the IRS doesn't know (casinos report winnings) its that they don't have to report losses.
    • artursapek 3y ago
      What? Casinos don't report all winnings. Anyone can get chips for cash, and cash for chips.
• cdelsolar 3y ago
  yeah it's insane. This past tax cycle, we filed and overpaid by like 3K, using Turbo Tax. Of course Turbo Tax didn't tell us this, and we wouldn't have known except we got a check for the overpayment from the govt about a week or two later!
  • jprete 3y ago
    I'm curious what mistake happened that you overpaid so much and the government caught it? I always assumed that the IRS relies on the tax return unless it explicitly audits you, but I think my assumption is now out of date.
    • khazhoux 3y ago
      I just an unexpected refund as well. No explanation. For all I know I overpaid by much more even.
    • joemi 3y ago
      Over the years there have been a few times where I got an additional (small) return due to overpayment. As far as I know, I've never been audited (and I think I'd know if I were).
  • Aperocky 3y ago
    How? Was it Form-1099K mis-ingestion from turbotax? Or is it some other hole?
    • cdelsolar 3y ago
      Our taxes are complicated. We employed a nanny this past year which somehow made our tax due jump up by over 3K. I assume this was a mistake in TurboTax?
      • Aperocky 3y ago
        I would assume so too, maybe try multiple options, after all you don't pay until the the submit button.
• az226 3y ago
  Exactly. “We’ve submitted your tax return for you using the standard deduction. If you’d like to itemize your deduction, please send us Form 1050 Itemized Deduction worksheet.”
  • pc86 3y ago
    Itemized deductions are 1040 Schedule A, and you don't typically file worksheets along with your return (although there's nothing stopping you from doing so).
  • sgerenser 3y ago
    Itemized deductions are far from the only thing that the IRS doesn’t know about. Almost everything on Schedule C, and RSU and ESPP cost basis would also probably require manual intervention. Probably a bunch of other credits as well, like the tax credit for buying an EV, solar/energy efficiency, adoption, various student-related deductions/credits, etc.
    • maxerickson 3y ago
      Easy to task the seller with reporting when offering the various energy efficiency subsidies.
    • billti 3y ago
      And I think that's part of the problem. I've done my taxes (in the U.S.) manually for the past couple of years (i.e. filling out a 1040 directly, no TurboTax etc.), and the amount of times I've read through some absurd item that is clearly only in the tax code to get the vote of some special interest is depressing. Like most 'benefits', there would be uproar if you tried to take them away now by the people impacted, but maybe they could be moved out into separate programs. Seems like getting to a point where ~75% of the population didn't need to file would be doable if there was enough motivation for it. If your only income is on a W-2, and your only mortgage / banking / trading is with U.S. companies like Chase or Morgan Stanley, no reason that couldn't all be done for you.
    • az226 3y ago
      You took me literally. Basically IRS can file taxes for all your details without adjustments. If you want to make adjustments, there should be an easy way to fill them in and be done with them. Donations, tax credits, etc. Most brokers send all the info to the IRS, but there are some that get wrong cost basis for ESPP (Fidelity looking at you) and so you’ll have to rectify that too. But those things should spit out a number that gets adjusted from the IRS number.
• NoMoreNicksLeft 3y ago
  The people should definitely be reminded of how much they spend for how little value they get. That said, I'd be more than happy to see HR Block go bankrupt.
• shortcake27 3y ago
  Yeah the American system absurd. “We have all the data but you still need to figure it out yourself and if you get it wrong you’ll get in trouble”. The Australian system has improved a lot over the past few years - PAYG (employment), bank interest, and dividends are all pre-filled on your tax return. So all you need to figure out is deductions and other income. I’d still like to see it taken a step further like in the UK where you don’t even need to file a tax return unless you have income the HMRC doesn’t know about.
  • AnIdiotOnTheNet 3y ago
    > Yeah the American system absurd. The hilarious thing is that if we remove the context from this statement it applies so broadly that you could mean just about of our systems. Having absurd systems is pretty much our defining characteristic.
    • alistairSH 3y ago
      Americans Will Always Do the Right Thing — After Exhausting All the Alternatives -- Winston Churchill (probably not[1]) 1 - more likely a generic version of this was posited by Israeli diplomat Abba Eban in the 1960s and mis-attributed to Churchill sometime in the 1980s
    • balaji1 3y ago
      List a few. For the ppl who downvoted your comment.
      • hutzlibu 3y ago
        Downvoting can also happen, if people believe, that the comment won't lead to an interesting debate.
    • BurningFrog 3y ago
      You're not exactly wrong, but I think that's true of most countries. We're just not aware of foreign dirty laundry, and as a tourist you'll not notice.
• bityard 3y ago
  I'm not saying it's a GOOD reason, but the main reason the government doesn't just send you a tax bill and say, "here, now pay up" is because there are lots of things which are taxed but the government doesn't "see" because they are not (or cannot reliably be) reported. This goes for certain credits and deductions as well. So the only real leverage they have is to tell everyone to get it right or face the possibility of an audit.
  • alistairSH 3y ago
    Those deductions and credits (mostly) apply to people itemizing their deductions. About 30% of households itemize - the remaining 70% take the standard deduction. [EDIT - since the tax changes in 2018, the numbers are closer to 10% itemize/90% standard deduction] And most of the common items are known to the IRS... mortgage and mortgage interest, property taxes, state taxes, education credits, retirement savings. Common items that could be known to the IRS (but aren't necessarily today)... charitable giving, medical expenses, self-employed healthcare premiums. The IRS could, relatively easily, email/SMS/snail-mail you a pre-filled tax return with the info they do have. If nothing needs updated, you just (e-)sign and provide payment info.
    • lazide 3y ago
      Most of the economy (as in cash flow) is through businesses, and what you’re saying doesn’t apply to them.
      • alistairSH 3y ago
        So...? There are 131,000,000 households in the US. Something like 40% of people surveyed use tax prep software (at $50+/year). That's a massive waste of money that society could use on something useful.
        • lazide 3y ago
          Someone asked why it was happening in the US. I pointed out why. That not everyone agrees that it is a waste, or that society would find a better use for it is of course going to be a matter of opinion. Which some folks are heavily incentivized to weigh in on (to the point it may be a large percentage or all of their net worth), and to others it’s $50/yr.
• pledess 3y ago
  It's technically possible for tax preparation software to collect information about UI interaction (e.g., revising income downward before finishing) and send that information to the IRS. I don't know whether that occurs, and maybe all tax preparation companies decided not to do it for fear of detection and customer backlash. Still, it seems plausible that this new interest in IRS-hosted free e-filing means that someone became uncomfortable with a previous arrangement where those companies were sending UI data "voluntarily" or "accidentally" to help enable data mining for IRS audits. (Backspacing and decreasing a W-2 income value is probably not of interest, but a pattern of backspacing in something like "Gambling income" or "Gross receipts or sales" might be.)
• attractivechaos 3y ago
  In my experience, if I underpay my tax, they will come at me and demand penalty and interest. If I overpay my tax, they will do nothing. This is by design, I think.
  • creato 3y ago
    I’ve overpaid my tax, they told me about it and IIRC I just got one letter with a check in it, I didn’t need to do anything. I’ve also underpaid and my experience was basically the same (except I had to send a check instead obviously). Edit: and the “penalty” was just modest interest on the underpayment.
  • alistairSH 3y ago
    Generally, you're exempt from IRS penalty if you do either of: - pay >90% of owed amounts via estimated taxes or withholdings - pay >=100% of your previous year's earnings If you're underpaying by more than that, there's a high chance you're doing so on purpose. Or made a fairly egregious error (in which case, the penalty was probably assessed later upon audit). And if you overpay, you get a refund, not nothing.
• JohnFen 3y ago
  > They’ve already done my taxes so they should just send me a bill and not waste my time It's absolutely insane that it doesn't work that way. Precompute the taxes owed, and send that to the taxpayer. The taxpayer can then accept the IRS's computations or reject them and file their taxes like they always have.
• nine_k 3y ago
  Yes. It would be great to receive the standard, already filed return, and have time until the Tax Day to file a custom return if you need to. - Lowers the burden on those who have very simple income (W-2). - Offers enough boilerplate to start a custom return with. - Never miss filing your return, no matter what happens to you between early February and April 15th. At worst you'll not receive as much back as you otherwise would.