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Can we just switch to pre-filled tax forms already? The average American spends about $200/year and 12hrs preparing their taxes. This study from last year fou

Can we just switch to pre-filled tax forms already? The average American spends about $200/year and 12hrs preparing their taxes. This study from last year found that pre-filled tax forms would be accurate for 42-48% of people. That is already amazing, and I'm sure that number could be doubled over 10-20 years. https://www.nber.org/papers/w30008 https://www.nber.org/papers/w30008

floren 3y ago
How do you know if you're one of the 42-48%, though? I'd love easier taxes, but not if I've got a 50/50 chance of getting hassled over it in a year.
- OkayPhysicist 3y ago
  I suspect that number would go way up by just providing a way to declare your dependents. Right now, for the vast majority of the population, especially those who don't just pay an accountant, their taxes consist of a "Where's Waldo" copy-and-paste adventure combining information from their W-2s and 1099s onto a handful of other forms, then adding up like 3 numbers. If that describes your tax filing experience, a pre-filled form would be perfect. Any omitted details are more likely to be in the government's favor than your own.
baby 3y ago
But that’s the average American. Like everything in America, if you make enough money it’s not a problem. Just pay for an accountant.
- JAlexoid 3y ago
  Yeah... My accountant wants $2300 per year to make sure that we withhold the correct amount. (that sum is also no tax deductible) The whole system is created to screw you... and yet many people defend it.
Beached 3y ago
how would you handle the large number of deductions and credits everyone files for yearly? does the fed know of o bought a solar generator and plan on taking a credit? do they know if I had my windows replaced and plan on a deduction? do they know how many square feet my at home office is, or how much I spent in supplies? do they know if I plan on taking the general deduction or itemizing?
- andykellr 3y ago
  All of those purchases and deductions put you outside of the 42-48% that the parent is referencing.
- Forge36 3y ago
  File your own not using the pre-filled forms as you do today? While it won't for some doesn't mean it can't be the default option for many
- JAlexoid 3y ago
  Every single rational country provides a tax form to their residents, that is prefilled. You get the bill, with explanations. You file documentation with the tax authorities and then you get a response. I have done that in multiple countries - getting tax refunds and other benefits at the end of the tax year. I even ran a business in the "tax heavy EU", where all of my tax related duties were at most 30 minutes per month(that's with payroll and other common business bookeping) Meanwhile in US - IRS knows what you owe, IRS is legally banned to tell you and you're forced to pay a third party to send your documentation to IRS... oh... and they also make mistakes very often. Yet for some reason, people like you are up in arms.. do you work at Intiut or something?
JAlexoid 3y ago
There's probably not a single lawmaker that they don't have on the hooks, along with a litany of CPA's who's sole existence depends on you requiring to have someone just input numbers into Intuit QuickBooks. And most Americans just pretend that it's "fine". Fun fact - to avoid under-withholding my CPA wants to charge me $2300 per year, that's not tax deductible. A simple thing of making sure that my withholdings are correct throughout the year and I don't have to pay IRS more in April... So no. This is a corrupt system, that most Americans just pretend is "the norm".
- ortusdux 3y ago
  One major issue is the number of jobs the current system props up. I wouldn't call it corruption when a lobbyist tells a Senator that pre-filled tax forms would cost their district 10k jobs. But I don't think the government should avoid providing preventative dental care because it might affect dentists' bottom line.
- spunker540 3y ago
  I'm not too convinced about the lobbying argument. I know they spend $2-3M per year on lobbying. but 1) our govt doesnt get anything done anyways, regardless of how much Intuit spends. I believe the null hypothesis is pretty likely here (they could not spend that money and still be the #1 tax company and no real laws get passed to take that away from them). 2) $3M just doesnt sound like a lot to a company as big as Intuit. If that's all it takes to get congress on your side, seems like not that big an obstacle in the first place for any company in any industry. I am open to more direct evidence to the contrary though.
ProllyInfamous 3y ago
[flagged]

floren 3y ago

How do you know if you're one of the 42-48%, though? I'd love easier taxes, but not if I've got a 50/50 chance of getting hassled over it in a year.

OkayPhysicist 3y ago
I suspect that number would go way up by just providing a way to declare your dependents. Right now, for the vast majority of the population, especially those who don't just pay an accountant, their taxes consist of a "Where's Waldo" copy-and-paste adventure combining information from their W-2s and 1099s onto a handful of other forms, then adding up like 3 numbers. If that describes your tax filing experience, a pre-filled form would be perfect. Any omitted details are more likely to be in the government's favor than your own.

baby 3y ago

But that’s the average American. Like everything in America, if you make enough money it’s not a problem. Just pay for an accountant.

JAlexoid 3y ago
Yeah... My accountant wants $2300 per year to make sure that we withhold the correct amount. (that sum is also no tax deductible) The whole system is created to screw you... and yet many people defend it.

Beached 3y ago

how would you handle the large number of deductions and credits everyone files for yearly? does the fed know of o bought a solar generator and plan on taking a credit? do they know if I had my windows replaced and plan on a deduction? do they know how many square feet my at home office is, or how much I spent in supplies? do they know if I plan on taking the general deduction or itemizing?

andykellr 3y ago
All of those purchases and deductions put you outside of the 42-48% that the parent is referencing.
Forge36 3y ago
File your own not using the pre-filled forms as you do today? While it won't for some doesn't mean it can't be the default option for many
JAlexoid 3y ago
Every single rational country provides a tax form to their residents, that is prefilled. You get the bill, with explanations. You file documentation with the tax authorities and then you get a response. I have done that in multiple countries - getting tax refunds and other benefits at the end of the tax year. I even ran a business in the "tax heavy EU", where all of my tax related duties were at most 30 minutes per month(that's with payroll and other common business bookeping) Meanwhile in US - IRS knows what you owe, IRS is legally banned to tell you and you're forced to pay a third party to send your documentation to IRS... oh... and they also make mistakes very often. Yet for some reason, people like you are up in arms.. do you work at Intiut or something?

JAlexoid 3y ago

There's probably not a single lawmaker that they don't have on the hooks, along with a litany of CPA's who's sole existence depends on you requiring to have someone just input numbers into Intuit QuickBooks. And most Americans just pretend that it's "fine". Fun fact - to avoid under-withholding my CPA wants to charge me $2300 per year, that's not tax deductible. A simple thing of making sure that my withholdings are correct throughout the year and I don't have to pay IRS more in April... So no. This is a corrupt system, that most Americans just pretend is "the norm".

ortusdux 3y ago
One major issue is the number of jobs the current system props up. I wouldn't call it corruption when a lobbyist tells a Senator that pre-filled tax forms would cost their district 10k jobs. But I don't think the government should avoid providing preventative dental care because it might affect dentists' bottom line.
spunker540 3y ago
I'm not too convinced about the lobbying argument. I know they spend $2-3M per year on lobbying. but 1) our govt doesnt get anything done anyways, regardless of how much Intuit spends. I believe the null hypothesis is pretty likely here (they could not spend that money and still be the #1 tax company and no real laws get passed to take that away from them). 2) $3M just doesnt sound like a lot to a company as big as Intuit. If that's all it takes to get congress on your side, seems like not that big an obstacle in the first place for any company in any industry. I am open to more direct evidence to the contrary though.

ProllyInfamous 3y ago

[flagged]