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Free IRS-run tax filing pilot to be available in 13 states

906 points by dwynings 3y ago

droptablemain 3y ago
If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
- sriram_sun 3y ago
  Cost of policing is close to or possibly the highest expense for any city. That did not put security guards out of business.
  - woodruffw 3y ago
    Why do you think this? NYC, which spends extraordinary amounts of money on the NYPD, still only spends 10% of its budget on public safety[1]. The 4 largest categories are education (20%), transportation (15%), environmental protection (15%), and housing and economic development (15%). [1]: https://www.ibo.nyc.ny.us/iboreports/understandingthebudget.pdf https://www.ibo.nyc.ny.us/iboreports/understandingthebudget....
- toomuchtodo 3y ago
  Just as in tech we build things that will get refactored and thrown away, it should be expected certain private sector components might be eventually deprecated when government steps in to provide as a public good.
  - wolverine876 3y ago
    > it should be expected certain private sector components might be eventually deprecated when government steps in to provide as a public good I support many public goods, including this one, but they are a tool with appropriate uses just like private enterprise is. I don't want operating systems to be a government-provided 'public good'. Also, I think freedom is the core, but not only, value here, including in commerce. When government takes over, it's no longer a free market with free people.
    - jabbany 3y ago
      > I don't want operating systems to be a government-provided 'public good'. Huh. Interesting example. I actually do want to see a government produced public good operating system. Where we're going, operating systems will either be ad filled messes or locked down walled gardens. A public good option would be required to meet high bars for interoperability while also not ad funded. It's one thing to regulate away a market (make things illegal) and a very different situation if the government is just setting a bar for quality within a market.
      - wolverine876 3y ago
        > Where we're going, operating systems will either be ad filled messes or locked down walled gardens. Linux?
        RIMR 3y ago
        Funny you bring that up, because 27% of all US Government systems run Linux. The problem is that the government doesn't give back any money, or contribute much code to the FOSS projects that they rely on. If they gave back proportionally like Linux Foundation Platinum sponsors do, they would get a return on their investment just in that they run enough Linux to benefit from contributing. China has given money to FOSS projects far more than the US does, and there is an official Chinese Linux distro available to Chinese users. Nobody is forced to use it, outside of Chinese government employees on their work machines, but like a library, it is something of value that the state can provide to those who might need it.
        throwaway2037 3y ago
        Most US gov't systems probably run RedHat Enterprise Linux. So, yeah, they do pay to develop GNU+Linux and lots of other FOSS.
    - RIMR 3y ago
      I don't think governmental functions like tax collection should be subject to the free market. Where does this end? Do we end up with private militias that compete with municipal police departments? Do we end up with private militaries that compete with the US military? Do we end up with private court systems that compete with the DoJ? Some things should not be privatized. The government allowing corporations to profit off of a civic duty like taxation, while offering no free public alternative, just anoints a handful of corporations with the gift of extracting profit from a mandatory governmental process. You should not be required to understand the intricacies of tax code, or pay for someone who does, just to file your taxes as required by law. If a criminal has the right to be provided a public defender, then every American with an income should have the right to be provided with public tax preparation service from the same government that mandated tax collection in the first place.
- markkanof 3y ago
  That seems like an overly broad statement. If the companies producing tax filing software were solving a problem for their users then why shouldn't they exist. Even with this new option being offered by the IRS there is still likely room for private companies to solve the same problem (tax filing) in a way which is perceived as better by some users and so still justify their existence.
  - skyyler 3y ago
    >If the companies producing tax filing software were solving a problem for their users then why shouldn't they exist Because the "problem" they're solving has been solved in other countries without a profitable middleman. Intuit's continued existence in this space is dependent on their lobbying team.
    - markkanof 3y ago
      That's a slightly different issue though. Just saying that because the government has offered a solution to the problem of filing taxes doesn't automatically imply that no other organizations that are solving the same problem deserve to exist. I suppose if you are arguing that the one and only reason that tax preparation software is needed is because of Intuit's lobbying then that could be true, but Intuit's lobbying is only part of what has led to a complex tax code.
      - skyyler 3y ago
        Yes, the one and only reason tax preparation software is needed for normal people with normal incomes and expenses in 2023 is because of Intuit's lobbying. That's why people are upset about it.
  - stetrain 3y ago
    If they can provide value on top of the public service and find customers willing to pay it, then they weren't killed by the public service.
  - chowells 3y ago
- lr4444lr 3y ago
  Maybe. Or maybe a lot of people will leave refunds on the table because the software will be bad at helping people identify their deductions. Also, my wife paid a joint filing online under my SSN, and the system couldn't figure that out and claimed we were in arrears. I'm not hopeful.
  - stetrain 3y ago
    How will I know the software is properly optimizing my deductions without a 30 second animated progress bar with the words "Optimizing Deductions" flashing on screen, while also advertising to me that I could be leaving savings on the table unless I upgrade to the TurboTax Pro Ultimate package for no up-front cost* * cost of TurboTax Pro Ultimate will be deducted from your refund amount, plus interest.
    - Alupis 3y ago
      Generally speaking, if you are in a position where deductions and credits matter (ie. not standard deduction), you really aught to seek a professional to review your filing before submission, or at a minimum use two different softwares to compute your taxes and look for any disagreement (in theory, they should have the same output). Either way, the $49 to use the software is trivial (under this situation) and often is only paid if you use that software to submit your taxes (meaning you can "get a second opinion" for free).
      - ghaff 3y ago
        The model is that someone with a W-2 and a 1099 or two and just taking the standard deduction should be "Yep, looks OK." If it gets more complicated than that you probably need to either spend a bunch of your own time or hire a professional.
        nightski 3y ago
        That's basically how the services work today for that segment of citizens, and they are free.
- wolverine876 3y ago
  The government could theoretically make anything a public service; that standard doesn't distinguish between one industry and another. I support the IRS's new service, as a general matter (i.e., without knowing details), but you raise a serious issue.
  - kdmccormick 3y ago
    Here's a better / more nuanced standard: If an industry exists because of the government and it can be replaced by a public service, then it doesn't deserve to exist. FWIW, public defenders are a public service used to interact with a government-created system, but the private legal defense industry is alive and well. So, it's not like making a public service is sufficient to kill any government-created industry.
    - wolverine876 3y ago
      > If an industry exists because of the government and it can be replaced by a public service, then it doesn't deserve to exist. It's a start, but I'd need to think of examples. I'd say if the government creates inefficiencies, such as for basic tax filing, it should remove them if possible regardless of the effect on businesses profiting from them. Off the top if my head, there could be cases where government makes a change that shifts the demand from one industry to another (that donates more to politicians).
      - kdmccormick 3y ago
        > I'd say if the government creates inefficiencies, such as for basic tax filing, it should remove them if possible The complexity of the US tax code is certainly inefficient from the perspective of someone trying to get through their taxes, but many economists would argue that it enables a very economically efficient way to soft-enforce policy and influence behavior without resorting to regulation and law enforcement. Whether the economic efficiency outweighs the bureaucratic inefficiency... I'm not sure. I guess that's where public tax software comes in.
- Alupis 3y ago
  I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be as easy to use or as pleasant as the existing offerings, but it will be a huge shot across all of their collective bows. Keep in mind the IRS offering a free online service for tax filing does not reduce the complexities of the current tax code - nor does it make for a more fair tax system (one where having means to access professionals reduces your perceived tax liability). This system merely means fewer people need to pay $49 a year to file taxes...
  - LeafItAlone 3y ago
    Then it doesn’t sound like you disagree, because you don’t see this killing the industry.
  - TylerE 3y ago
    Lobbying by the tax prep companies is a big part of how it got so byzantine in the first place.
    - l33t7332273 3y ago
      Can you elaborate on that, perhaps with some substantive example? I believe that these companies lobby to keep IRS from providing free tax prep, but I do not think that they lobby to make the tax code more complicated. It’s my understanding that the tax code is complicated as a result of disparate efforts to increase support among voting blocks, to encourage/discourage behaviors, and to reward supporters/backers.
      - RIMR 3y ago
        https://billmoyers.com/story/how-lobbying-by-tax-preparer-helps-keep-tax-day-complicated/ https://billmoyers.com/story/how-lobbying-by-tax-preparer-he...
- deleted 3y ago
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- SanderNL 3y ago
  There is a good chance it sucks and is wonky as hell, making the value proposition of proprietary solutions even more attractive.
  - enraged_camel 3y ago
    It might suck initially, but that doesn't mean a lot. Healthcare.gov works pretty well today (not perfect but gets the job done for most people), despite the shoddy rollout.
  - dheera 3y ago
    That and also it's not so useful if it can't import from bitcoin.tax and TurboTax exports, since there's so much in tax prep that depends on numbers from the year before, and ultimately the value of tax prep software to me is roughly the time I spend on tax prep vs. what I could get in terms of hourly rate as a hypothetical software consultant outside my day job. If I have to manually input 5 billion crypto and stock transactions including every damn weekly staking reward just to pay taxes it's just bleh.
  - PaulDavisThe1st 3y ago
    NM state tax filing online is an absolute gem of web-based government interaction. The last 3 years, my state tax filing (I'm self employed) have taken less than 5 minutes each time. It doesn't to suck.
- czbond 3y ago
  Only the free'ish customers (eg: Easy 1040) will care - and they were low profit to companies like Intuit, etc anyways. All other taxpayers will continue to use systems that ideally maximize deductions as government continues to tax endlessly.
- not2b 3y ago
  Businesses will still need tax assistance. But there is no reason for a person whose income comes only from a salary, interest on savings and a brokerage account to need paid help to file taxes. The IRS already has all of the numbers. They could pre-fill the forms with those numbers and just have the taxpayer approve them.
  - sokoloff 3y ago
    The IRS processing of the data sent to them by various reporting requirements is much more like what we'd call "eventually consistent". If you ask for a transcript of your tax account ("what does the IRS know about my tax situation?") on April 15th and again 6 months later, the second report is very likely to be complete, while the first is not nearly as likely.
    - not2b 3y ago
      So, do it anyway and let the IRS eventually send a correction (refund or bill) in the rare cases where it makes a difference. Or allow the taxpayer to make corrections if they know about them. But probably the number of errors will go down; well-intended taxpayers often copy numbers wrong, and that probably happens more often than "eventually consistent" issues.
- whyenot 3y ago
  Will the IRS version also do my state taxes? Can it "slurp" in the statements from my brokerage accounts? Can it do rental income? I have no love for Intuit and all the rest, but even with the constant up-selling and the other BS you have to put up with, it does help me tremendously with what would otherwise be a complicated task that I dread doing every year.
- RicoElectrico 3y ago
  Enriching oneself at the cost of others really seems like the business modus operandi in the USA these days. It is a win, although only a beginning of what should come.
- A4ET8a8uTh0 3y ago
  I would not go that far, but it is hard not to notice how bad the main competitors in that space have gotten. They are using just about every single dark pattern they can possibly get away with. Some competition from a public service may be warranted in this case.
- robertlagrant 3y ago
  > If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place. It was created by a public service. It would be better if they'd just made a rule that those with super simple tax affairs just didn't need to file, as we have in the UK. But there's probably no pork in just making things better.
  - sys_64738 3y ago
    The Tory government introduced this filing BS in Britain a while back. You never used to have to file anything with the Inland Revenue before the Tories.
    - robertlagrant 3y ago
      Can you cite this? I thought you just have to file if you make over a certain amount, or you have a setup that requires filing (e.g. you rent part of your house out, or you're a sole trader).
      - sys_64738 3y ago
        What the heck do you mean can I cite it??? I LIVED there so I don't need to cite anything.
        robertlagrant 3y ago
        You cite things to give evidence for other people to check, as opposed to taking your word for it.
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m463 3y ago
will it have embedded links to google.com like https://dmv.ca.gov https://dmv.ca.gov ? (for example, this irs page links to googletagmanager)
- jrockway 3y ago
  I mean, if using googletagmanager makes you mad, wait until you hear about the whole id.me business: https://epic.org/report-id-me-lied-to-the-irs-about-wait-times-for-its-identity-verification-service/ https://epic.org/report-id-me-lied-to-the-irs-about-wait-tim... I don't think there is any stipulation that the US government can't use products sold by US based companies. In fact, they enjoy doing it. You should ask your elected representatives to prohibit tracking on government websites; if they pass a law, the IRS's web design team will follow it.
Analemma_ 3y ago
I've been using FreeTaxUSA for a while now to do my taxes, and I like it very much. (If you use TurboTax or H&R Block or something, I strongly recommend giving FreeTaxUSA a look). I was sort of wondering if the IRS would just buy them wholesale and use that as the free file software, since it's already "finished" and making another one would be duplicated effort. But is there precedent for that, the government just buying a private company for its IP?
- hammock 3y ago
  >is there precedent for that, the government just buying a private company for its IP? The government's preference would probably be to contract with them and license it.
  - toomuchtodo 3y ago
    US Digital Service and the current White House MO around digital service delivery [1] operates a bit differently. IRS modernization [2] [3] will be owned internally. Their systems are the iceberg under the surface, the website for citizen consumption is the little bit above the surface. They're hiring people who know what they're doing (from page 15 of the modernization pdf): > Our overall success will depend on several special legislative proposals and regulatory authorities that we believe are appropriate for an effort of this scope and importance: > Engaging the Office of Personnel Management to utilize existing direct hire authority for IT modernization positions and/or broadening government-wide critical pay authority > Seeking reauthorization of IRS Streamlined Critical Pay Authority that expired in 2013 > Ensuring funding is available for multiple fiscal years at somewhat predictable intervals. [1] https://www.whitehouse.gov/omb/briefing-room/2023/09/22/fact-sheet-building-digital-experiences-for-the-american-people/ https://www.whitehouse.gov/omb/briefing-room/2023/09/22/fact... [2] https://www.irs.gov/newsroom/irs-modernization https://www.irs.gov/newsroom/irs-modernization [3] https://home.treasury.gov/news/press-releases/jy1666 https://home.treasury.gov/news/press-releases/jy1666 | https://news.ycombinator.com/item?id=36976331 https://news.ycombinator.com/item?id=36976331 (please consider a tour of duty: https://www.usds.gov/apply https://www.usds.gov/apply | no affiliation, just an engaged citizen)
- 3y ago
datadrivenangel 3y ago
I hope this is good! I've been happily using FreeTaxUSA for the last several years, which has a small price for state tax submissions and no gotchas after H&R block jumped me with over a hundred dollars in fees at the end.
etskinner 3y ago
Before everyone gets too excited: This will probably only apply to simple tax situations: If you have more than these, you might not be able use it: #Income reporting W-2 wage income Social Security and railroad retirement income Unemployment compensation Interest of $1,500 or less #Credits Earned Income Tax Credit Child Tax Credit Credit for Other Dependents #Deductions Standard deduction Student loan interest Educator expenses
- jaywalk 3y ago
  It'll only apply to simple tax situations for this initial pilot launch.
- amalcon 3y ago
  On the other hand, that's a whole lot of people -- probably almost everyone who is not a homeowner, and quite a few who are.
  - ghaff 3y ago
    That list suggests that if you have a 1099 (which I assume is most people with meaningful savings), you probably won't qualify.
    - bigbillheck 3y ago
      I think there are probably a lot fewer people with meaningful savings than you might think.
      - ghaff 3y ago
        It looks like about half have brokerage accounts although some of those are probably just 401Ks and there's obviously a strong correlation with income levels.
        jancsika 3y ago
        I'd bet once you start digging down into the details, having a brokerage account becomes less and less relevant as a metric for who can pay simple taxes. For example, how many of those respondents in the Gallup poll answered yes only because they have a Simple IRA? For those respondents, their contributions don't preclude them from taking the "simple tax" branch when filing taxes. (That's the "simple" part-- well, one of the simple parts, at least for the employee.) Moreover, there were some changes to simple IRA administration in Secure 2.0 act that make automatic enrollment mandatory (for the employer to do 3% matching or whatever). So the category of respondent I mentioned above-- who technically has a brokerage account but can file simple taxes-- is likely to grow quite a bit in the next few years and decades. Edit: I'd also be interested in how many people with simple IRAs contribute anything more than the 3% matching-- I'd bet its more than a majority. Perhaps that could change now that Secure 2.0 lets them contribute to a Roth IRA.
nlh 3y ago
This is only tangentially-related, but I know I'm asking the right audience: I switched, blissfully, away from Quicken/Quickbook/Xero/all that heavy crap to very simple and elegant textfile-based accounting (ledger/hledger) and it's been the best and most flexible accounting experience I've ever had. I finally feel completely in control of my companies' books. Is there an equivalently-blissful tax-filing software/service? I don't want to go back to TurboTax, and with several single-member LLCs I'm probably beyond the scope of the IRS' free service. Anyone have any suggestions?
- wolverine876 3y ago
  > I switched, blissfully, away from Quicken/Quickbook/Xero/all that heavy crap to very simple and elegant textfile-based accounting (ledger/hledger) and it's been the best and most flexible accounting experience I've ever had. I finally feel completely in control of my companies' books. I love the idea, but not being an accounting expert (maybe you are), I'd be afraid that some immaturity or lack of expertise in the software would cause a big problem in a critical way. What makes you confident in it? Also, how do you share data with accountants, etc.?
- crazygringo 3y ago
  If you're looking for the same level of manual control because you don't want the "wizard" interface, you should use "Free File Fillable Forms" [1], which is the product of a public-private partnership with the IRS. It's literally just filling out the paper forms except in a web interface and it does most of the math for you. And then you can file electronically for free regardless of your income level, and it produces a final PDF with all forms filled out for your files. It can be tricky to do your taxes the first time around depending on their complexity, but the good thing is that once you figure it out, you just use the previous year's PDF's as a reference for the current year's. The lines move around a little bit year-to-year but it's usually the same idea. And it becomes pretty obvious what has changed (that requires research), and you can figure out if anything has changed in your own financial situation that warrants filling out a new line or new set of forms. (I don't believe there's anything specifically textfile-based. But this is definitely the electronic version of doing your taxes "manually" with full control.) [1] https://en.wikipedia.org/wiki/Free_File#Free_File_Fillable_Forms https://en.wikipedia.org/wiki/Free_File#Free_File_Fillable_F...
joshribakoff 3y ago
They already have this in some form, its called “free fillable forms”, and it sucks. For example if there is any minor issue like something off by a cent it fails to submit and won’t tell you which field has an error or what the error is. Although its not officially maintained by the IRS, I don’t think… if i recall Intuit maintains it as part of an (arguably nefarious) agreement with the IRS. It’s presumably intentionally made to suck and hard to find.
- sidewndr46 3y ago
  I got some incomprehensible statements one time from a joint venture. I paid an accountant to do my taxes since I couldn't figure out. There answer to me was "I have no idea what this is trying to say, so I'll just submit it. If you get audited let me know and we'll work it out"
  - bluGill 3y ago
    If you have a joint venture then your situation probably is complex enough that an accountant is something need anyway. At that point have them do the taxes as well. Most people don't have that complex a situation.
- hcrisp 3y ago
  I've used it for many years and never had a problem. It is like filling in a PDF form but has a "Calculate" button which runs all the math for you (apart from some tables, etc. which you need to look up yourself). So I'm not sure how you would get off by a cent. Federal taxes only. Except for entering in your W-2s by hand, it's pretty straightforward. You can save a PDF copy to your local drive. The nice thing is you save postage and do not have to pay someone to prepare / file it for you.
- jrib 3y ago
  yeah, I had to submit an amended return because free fillable forms decided to discard a form and went through with the submission anyway :(
mdaniel 3y ago
Does that mean I can FOIA for the source code? I ask in all seriousness: I believe some things are withheld/redacted due to "national security" but if they hard-coded mainframe credentials in their source code that's not my fault
- h2odragon 3y ago
  Much government source is public domain by default, and they are decent about publishing it. If this is owned by the IRS, then probably it will be public. If its a service contracted out, then perhaps not.
- NegativeK 3y ago
  FOIAs can be incredibly easy; you should give it a try and post about it!
pastor_bob 3y ago
>Arizona, California, Massachusetts and New York have decided to work with the IRS to integrate their state taxes into the Direct File pilot for filing season 2024. There's the notable point. If states integrate into it, it's a game changer. No need for the vast majority of filers to use any 3rd party.
tombert 3y ago
This is great news; no matter how restricted it may be initially, I think having a "guaranteed-free" tax filing system will be great for most people, especially lower-income people. The private companies have demonstrated pretty clearly that they will do everything they can to avoid people actually having free tax filing, and while ~$50-100 might not seem like a ton of money, keep in mind that at the current United States minimum wage ($7.25 as of this writing), it would take upwards of working 6-14 hours just to pay for tax filing. $100 is a lot of money when you're not a yuppie software engineer. I suspect I did enough crazy stuff with stocks this year that it probably won't apply to me at first, but hopefully by 2025 or 2026 I can stop giving money to Intuit or Jackson Hewitt.
- radlad 3y ago
  FWIW, FreeTaxUSA[0] is much cheaper than Intuit and has worked great for me the past few years. I find it slightly easier than TurboTax, in fact. [0] https://www.freetaxusa.com/ https://www.freetaxusa.com/
  - coconut08 3y ago
    sorry... cheaper? surely a place called free tax usa would be free?
    - BizarroLand 3y ago
      They are free for federal electronic filing, and charge a small fee for state filing.
    - ziddoap 3y ago
      Well... free is cheaper than not free.
    - starik36 3y ago
      It is free for federal taxes. The only thing that you are paying for are state taxes.
    - varjag 3y ago
parhamn 3y ago
One thing I really want to see is an official form where if you answer all the questions, to the best of your knowledge correctly, protects you from liability for incorrectly filing your taxes. End of the day with TurboTax and co, you, as expected, get a "not our system, not our problem" type response when dealing with the post-filing ramifications. There seems to generally be a lot of "I'm not sure if I did it right" anxiety in the general population.
- hiatus 3y ago
  Even if a CPA does your taxes, you still have to sign them. I think intuit offers some kind of service for audit protection post filing.
- TylerE 3y ago
  It could be so much easier. In most of Europe "filing" your taxes involves getting a short letter essentially saying you made $x, and <owe/are owed> $y, with short return forms to either agree, or file an appeal.
  - davchana 3y ago
    Every time this comment is posted about non usa geographic area, somebody will post, but in US you have deductions, allowance, dividend, smaller profits, gifts. Which for sure all other countries too have, and somehow they have sorted this out. I think its the lobbying and the general mistrust of government "telling" a number vs calculating the number yourself. (Although if that is a wrong number, government/IRS tells the correct number).
- OkayPhysicist 3y ago
  If you make a good faith attempt at filing your taxes, you won't need liability protection. If you screw it up, you'll get a (relatively) polite message from the IRS that your taxes were screwy and you owe them money (or, occasionally, they owe you money).
- Anechoic 3y ago
  protects you from liability for incorrectly filing your taxes. In practice, it's not really needed. The thing is (and I realize that it's not the general perception) if you sincerely try to file your taxes and you screw up, the IRS will generally work with you to fix things. Sure, if you go all sovereign-citizen/Wesley Snipes and refuse to acknowledge taxes they'll kick in the door and take all your stuff. But if you accidentally report select head-of-household instead of single, and you can explain why you did, the IRS won't ruin your life.
thekrowndnf 3y ago
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atum47 3y ago
Declaring taxes in Brazil is free, but it's hard work (if you dabble with stocks, for instance). For 1/5 of the value of the minimum wage you can hire a accountant that does it for you. I think the service is worth it's price. All i have to do is send them a bunch of documents and they make sense out of it.
- sircastor 3y ago
  This is the way it should be here in the US, and this is the way it works in a lot of countries. The tragedy is, we all know it, and we all want it to change, but there are a few people who don't want it to change, and they're empowered to make it that way. I hope this IRS effort works out.
  - guerrilla 3y ago
    > The tragedy is, we all know it, and we all want it to change, but there are a few people who don't want it to change, and they're empowered to make it that way. It's almost as if you don't actually live in a democracy.
  - dudul 3y ago
    If I read the parent correctly it is already how it is in the US. If you do it yourself it is free, and for most people it wouldn't even be that complicated.
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zzzeek 3y ago
Credit to Joe Biden and the Inflation Reduction Act for making this possible. If Trump wins again he's going to have a lot of work destroying all the progress Biden has made in just one term.
- SV_BubbleTime 3y ago
  My satire detector is surely broken. It’s just wobbling between wtf and woosh. It’s OK, I don’t need to understand everything all the time.
  - zzzeek 3y ago
    Read the PR. it explicitly credits the Inflation Reduction Act for funding and making the whole thing possible.
    - SV_BubbleTime 3y ago
      Oh I read it. I just didn’t, ok. I wonder if I buy the company line anywhere?
      - zzzeek 3y ago
        im not sure what argument you're making. are you claiming the IRS' statement is just fabricating that this program has anything to do with the congressional bill it's actually proposed and funded within ?
        willdr 3y ago
        That's not necessarily uncommon is it? It was my understanding that bills get passed with extra funding for relatively disconnected causes all the time. They may have to credit the bill under which this was passed, but that doesn't necessarily reflect positively on the rest of the bill or the government's fiscal policy in general.
        3y ago
zelon88 3y ago
I always thought it was weird that something so complex, easy to mess up, and important to the government would require a third party external dependency. For a while towards the end it really kinda became a shining example of late stage capitalism. You, for all intents and purposes, NEEDED to do business with one of these handful of entities or you are in violation of the law. If you can't afford that you'll have to do this literally impossible stack of paperwork instead.
- OkayPhysicist 3y ago
  The "stack of paperwork" is definitely far from impossible. You have form 1040, which gives you a run-down of every possible form you need to reference. You fill out the boxes with the info it wants, then you go down the list, filling in each number box that applies to you: Got W-2s? Probably, attach 'em and sum them up. See a phrase you don't recognize? Read the relevant instructions. Got interest? Time to fill out a Schedule B, which itself references some other forms, and attach some 1099s. Sell any investiments? Schedule D, which might have you fill out an 8949 (strictly speaking, you can skip this one if all your investments have declared basis on your 1099-Bs that you received from your brokerage). If you think you might have more deductions than the standard, there's Schedule A, but for most people you can safely skip that one and take the standard. Taxable income determined! Then the taxes section contains a bunch of forms that apply to you if you're in certain situations, maybe you have a kid (Schedule 8812), the instructions are very helpful in telling you what you need to care about here. The first box is important, it includes your income tax which the instructions will tell you how to calculate. Sum up your witholdings from the W-2s and 1099s to figure out how much you've already paid the government, then figure out if you owe the fed money or they owe you. Sign, stick in an envelope, and send. Whole process takes a couple hours the first time, when you need to learn what you actually need to fill out, and in future years less than 2 hours. If you can read at a 6th grade level and do basic addition and subtraction you can fill out your tax forms.
deleted 3y ago
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greymalik 3y ago
Misleading title here that differs from the title in the linked article - it’s a pilot in 13 states, not generally available.
- deleted 3y ago
  [deleted]
- dang 3y ago
  I've changed it now. Submitted title was "IRS will officially launch free online tax filing service for 2024 tax season".
  - tpmx 3y ago
    Please consider punishing the marketing guy doing this submission. This was not done by chance or mistake.
    - dang 3y ago
      I don't understand what you mean.
- deleted 3y ago
  [deleted]
deleted 3y ago
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jjulius 3y ago
To clarify: This is not a full launch, it's just a "limited pilot" that will only be available in 13 states in 2024. Arizona California Florida Massachussetts Nevada New Hampshire New York South Dakota Tennessee Texas Washington Wyoming Someone please correct me if I'm wrong.
- enahs-sf 3y ago
  AZ, CA, FL, TX, NY alone gets you to about 120m people. This is a pretty big first test.
  - PaulDavisThe1st 3y ago
    The IRS says it will not be available to all tax payers in those states. It sounds as if it will be a fairly small number initially.
  - metaphor 3y ago
    > AZ, CA, FL, TX, NY alone gets you to about 120m people. Not quite; ~71.8 million constrained to just individual income tax filings based on 2022 stats[1]. Excludes estate, corps, gift, tax-exempt orgs and excise, but includes both paper and electronic filings. AZ 4,197,918 CA 23,209,479 FL 14,563,047 TX 16,750,330 NY 13,115,425 --------------- 71,836,199 =============== US 204,434,236 Surely, only a subset will qualify. [1] https://www.irs.gov/statistics/soi-tax-stats-state-data-fy-2022 https://www.irs.gov/statistics/soi-tax-stats-state-data-fy-2...
- InitialLastName 3y ago
  By my count that's about 146 million people, so a notch less than half the US population.
- silisili 3y ago
  Missed Alaska, the other no income tax state.
vichle 3y ago
For real? Sweden has had this for like 15 years. Perhaps if you paid a bit more taxes your government wouldn't be so useless (:
- dang 3y ago
  Nationalistic flamebait is not allowed on HN, regardless of country, so please don't post like this. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
jncfhnb 3y ago
The inflation reduction act is such a low key mvp of a bill. This is great
dang 3y ago
It's CPS time again. Related: Tax prep companies: $90M lobbying against free tax-filing - https://news.ycombinator.com/item?id=37363616 https://news.ycombinator.com/item?id=37363616 - Sept 2023 (231 comments) IRS moves forward with a new free-file tax return system - https://news.ycombinator.com/item?id=36804710 https://news.ycombinator.com/item?id=36804710 - July 2023 (221 comments) IRS tests free e-filing system that could compete with tax prep giants - https://news.ycombinator.com/item?id=35950836 https://news.ycombinator.com/item?id=35950836 - May 2023 (567 comments) Call on the IRS to provide libre tax-filing software - https://news.ycombinator.com/item?id=35705469 https://news.ycombinator.com/item?id=35705469 - April 2023 (129 comments) 60M Americans have taxes so simple the IRS could do them automatically - https://news.ycombinator.com/item?id=35476709 https://news.ycombinator.com/item?id=35476709 - April 2023 (277 comments) Lobbyists begin chipping away at Biden’s $80B IRS overhaul - https://news.ycombinator.com/item?id=35381701 https://news.ycombinator.com/item?id=35381701 - March 2023 (214 comments) Intuit pouring money into lobbying amid push for free government-run tax filing - https://news.ycombinator.com/item?id=34840039 https://news.ycombinator.com/item?id=34840039 - Feb 2023 (178 comments) IRS builds task force to explore running its own free e-file system - https://news.ycombinator.com/item?id=34764952 https://news.ycombinator.com/item?id=34764952 - Feb 2023 (199 comments) IRS Free File: Do Your Taxes for Free - https://news.ycombinator.com/item?id=34462122 https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247 comments) IRS will look into setting up a free e-filing system - https://news.ycombinator.com/item?id=32753099 https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408 comments) The IRS could be on the verge of changing the way Americans file their taxes - https://news.ycombinator.com/item?id=32550841 https://news.ycombinator.com/item?id=32550841 - Aug 2022 (17 comments) IRS will study free tax filing options - https://news.ycombinator.com/item?id=32502321 https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25 comments) TurboTax’s fight against free tax filing - https://news.ycombinator.com/item?id=31072202 https://news.ycombinator.com/item?id=31072202 - April 2022 (394 comments) Filing taxes could be free & simple. H&R Block & Intuit lobby against it (2017) - https://news.ycombinator.com/item?id=30856968 https://news.ycombinator.com/item?id=30856968 - March 2022 (114 comments) FTC sues Intuit for its deceptive TurboTax “free” filing campaign - https://news.ycombinator.com/item?id=30846071 https://news.ycombinator.com/item?id=30846071 - March 2022 (587 comments) Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments) Why do Americans have to pay much to file their tax returns when the IRS knows? - https://news.ycombinator.com/item?id=30267361 https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22 comments) Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments) California tried to save the nation from tax filing, then Intuit stepped in - https://news.ycombinator.com/item?id=28944200 https://news.ycombinator.com/item?id=28944200 - Oct 2021 (283 comments) The IRS has a big opportunity to fix the way Americans file taxes - https://news.ycombinator.com/item?id=28177289 https://news.ycombinator.com/item?id=28177289 - Aug 2021 (12 comments) -- GOTO https://news.ycombinator.com/item?id=35970518 https://news.ycombinator.com/item?id=35970518
ap77 3y ago
Doesn't change much. I still need to pay my CPA thousands to prepare the tax return.
ssalka 3y ago
> eligibility to participate in the pilot...will be limited to taxpayers with certain types of income, credits and deductions – taxpayers with relatively simple returns. The IRS today announced it anticipates specific income types, such as wages on a Form W-2, and important tax credits, like the Earned Income Tax Credit and the Child Tax Credit, will be covered by the Direct File pilot. This is what I was mostly curious about. So, I'm guessing things like ISOs, AMT, capital gains from investments etc would not be supported by this service yet.
- t3rabytes 3y ago
  The bottom of the blog post has the eligibility requirements list/things-the-pilot-will-support: Income reporting -W-2 wage income -Social Security and railroad retirement income -Unemployment compensation -Interest of $1,500 or less Credits -Earned Income Tax Credit -Child Tax Credit -Credit for Other Dependents Deductions -Standard deduction -Student loan interest -Educator expenses
whatever1 3y ago
Why does the average American have to file taxes? You know my W2 you know my family members. Just send out the withhold amount to my employer.
- nemo44x 3y ago
  Well, you could have done a variety of things that aren't reported. For instance, donating money/time/goods, winning from gambling/etc, inheriting money/property, winning things/money, face deprecation in assets like real estate, etc. Payroll and taxes have about a million edge cases and it's one of the reasons payroll is such a bloated industry. I agree it's probably a bit much for most people though and not filing should be akin to not reporting anything else and the IRS should automatically calculate your return and mail a check or a bill if you owe.
- sys_64738 3y ago
  There are too many additions to the tax code beyond that. Really, if they cut away 95% of the cruft then it could be dramatically simplified. Everybody has their thing they hold onto for dear life in a tax code.
  - bluGill 3y ago
    Most of the cruft has been cut out (as of 1986!) People are just so used to accountants and tax programs that they never look at the details to realize how simple their tax situation really is. This is encouraged by the tax industry.
- camdenlock 3y ago
  Psychological warfare. A direct and personal reminder of our place.
- bluGill 3y ago
  85% of Americans should only have to return the postcard "this is what we think your situation is". The other 15% have something the government doesn't know and needs to file. The other 10% should have an accountant do their taxes and not software (which leaves a few% lost, not quite complex enough for an accountant, but not enough of them to support software for their situation).
Zigurd 3y ago
Retail financial services are a source of misery for low income people. Providers don't want those customers, and it shows. Predatory products and service providers prey on the less well off. Postal banking would be a good next step.
WheelsAtLarge 3y ago
This is great. I wished the individual states would do this too for their tax filers.
- ksherlock 3y ago
  Move to Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington or Wyoming.
- Rebelgecko 3y ago
  California already has one, and it actually has fewer limitations than this federal pilot (it handles itemization and capital gains and such, although that's only because california doesn't have a separate capital gains rate)
nemo44x 3y ago
Wouldn't there just be a lot of money made by someone offering free filing and then offering to give you your return immediately for a fee of like 10%? Is anyone doing this?
swarnie 3y ago
Welcome to the 21st century American friends, enjoy your stay. God knows why it took this long.....
yieldcrv 3y ago
I like how this discussion is always “Free vs Turbotax” and everyone with a CPA just has to pretend they dont do that
1270018080 3y ago
A dream come true. I’ve been asking for this for years.
rqtwteye 3y ago
Do you still have to enter all your data or does it prefill the data it already knows like W-2 and 1099? That’s where the real benefit comes in my opinion.
mrbonner 3y ago
I hope the next step would be to tax me and let me decide to dispute if I see something not right. Most of us working with a W2 will have our tax filing simplified and cheap.
kouru225 3y ago
Living in New York never gets old…
hintymad 3y ago
Will this system integrate with all the banks, exchanges, registered businesses, and etc? I find that 90% of the time spent on tax filing is gathering data. Turbotax does offer some integration, but the experience was not necessarily smooth.
- whalesalad 3y ago
  Is a CSV not a good API? Most systems will allow you to export data in a columnar CSV format. Being able to then import these would solve the problem. "Swivel chair handoff"
  - hintymad 3y ago
    In that case I'll have to log in to each account, find the right place to download data, download them, and import them to my tax system. I'd rather have a turn-key solution. And I definitely have no interest of writing a program to automate such task.
    - deleted 3y ago
      [deleted]
    - whalesalad 3y ago
      to connect your banks to <insert xyz tax tool> you will also need to login to each account. how many accounts do you possess? seems like a non issue.
hedora 3y ago
The description of this makes me skeptical. People have been asking for a system where the IRS does your taxes for your, sends you the draft, and you add in any deductions, etc. They already do your taxes in the background to confirm your return is correct, so this is not significantly more work for them (in fact, it is probably less work). In some countries with such a system, unless you intentionally lie, you are absolved of legal liability if the government screws up your taxes. The article makes it sound like they are building a crappy turbo tax clone instead.
- foota 3y ago
  That might take more work in terms of process changes, but the setup would be there.
- RC_ITR 3y ago
  >They already do your taxes in the background to confirm your return is correct This is a common misconception. Most places that send you forms also send them to the IRS (but by no means all places). The IRS makes sure that the information you put in your forms is the same as the forms they got, but they know nothing about your dependents, whether you pay mortgages interest, etc. Now, the counterpoint to that argument is that c.90% of people just take the standard deduction anyway now that there's not SALT, but the argument there is that we should move completely away from deduction-driven taxes (which is probably the solution). As for TurboTax et al, those places are not sending your forms to every state tax agency (why do people always forget about state taxes in these threads?), so there's still very much a need for some solution there. Probably IRS data sharing, but good luck getting all the states to agree with the Feds on tax forms (just look at the SALT battle).
gerdesj 3y ago
There are lots of comments along the lines of "xxx is cheap" Why on earth do you need a third party for your tax calc and resolution? It is surely the antithesis of the "land of the free" and all that stuff. In the boring old UK I login to a govt. run website to do my annual tax self assessment. My P60 is already filled in (that's my PAYE - pay as you earn, my normal salary) I'm a company director too so I have dividends and expenses and offsets etc to worry about. It takes around an hour to complete. Most UK employees don't do self assessment. PAYE is such a simple and obvious idea - routine taxation should be done by routine.
- willdr 3y ago
  You're expecting coherency in the American libertarian mindset. There is none. "why should the government control the means of tax filing! I need to be free to pay a private company to do it!"
  - 0xParlay 3y ago
    Libertarians who want to pay taxes.. Now there's a powerful lobby. Have you considered starting a think tank with your political acumen lol
  - MBCook 3y ago
    It’s not just that. Remember this is normal in the US. Paper sucks. Tax filing helpers (people/software) have always cost money. “The government sucks” and won’t try to help you. And, oh yeah, ads and tax prep stores everywhere. No one questions it. They don’t like it, but they accept it. Just like so many other things in the US because we’ve never seen anything else.
    - refurb 3y ago
      I’ve paid taxes in countries where it pre-filled forms. Guess what I do? I get all my forms together. Look up the numbers on the forms. Double check the entries on the fillable forms are correct. Then I get my paystubs, I check the deductions, double check the prefilled form is correct. So what did it save me over the way US taxes are done? The form prefilled the numbers, that’s it. All the rest is the same. Same collecting forms, same doubling checking math. And why? Because mistakes are made. My employer sent the wrong numbers in, so the prefilled form was incorrect and would have cost me about $1,000 in extra tax. If you want to make tax filing better, make the tax code way more simple. I’ve lived in countries where the tax form was 2 pages with 12 entires. That’s it. Now that is the way to go. I could care less about fillable forms.
tiltowait 3y ago
I'm glad. I've used Cash App Taxes the past few years, and while it's free (including state) and an easy interface, I'm well aware I'm the product. Presumably/hopefully that will not be the case with this new system. I'm in one of the listed states, so I'm ... not exactly looking forward to trying it out, but definitely curious!
lbrito 3y ago
It is mind-boggling how far behind the US is in taxes and retail banking. News like this always amaze me.
pard68 3y ago
I have my home/property loan through a coop (a FCS institution) and so I get dividends every year on my shares. It amounts to about 1.5x my monthly payment. Because of this I have F-income to declare and so most free offerings are off the table for me. I used the FileFreeUSA and TurboTax Federal Free in the past and it worked well. I just use TT's paid offering now for the F-income declarations.
deleted 3y ago
[deleted]
greg7mdp 3y ago
I'm surprised Intuit allowed this to happen. It almost look as if the govt is working for the people.
toastal 3y ago
Almost none of the “free” or affordable options work the minute you put in an international address. Uncle Sam is one of the rare cases of taxing its citizens abroad, but everything about getting taxed abroad is more complicated.
- reustle 3y ago
  As an expat for 10 years now, I’ve taken that as the “you gave up on America“ tax
  - toastal 3y ago
    Like when Biden said COVID vaccines for all Americans & then the health minister or whatever had to walk it back clarifying that that doesn’t apply to those taxpayers living abroad.
oldbbsnickname 3y ago
No thanks to Intuit who had been stymieing it for profit for 20+ years. 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...
codetrotter 3y ago
Can it calculate taxes on Bitcoin?
stainablesteel 3y ago
wow maybe we can automate it next
jxi 3y ago
Tax year 2024 means the filing due in April 2024 or the one in April 2025?
- iNeal 3y ago
  April 2025
throw10920 3y ago
Why not start with simplifying the tax code, instead of letting it metasize in complexity, and then laying more complexity on top with software packages?
- slater 3y ago
  Because complexity is how you get loopholes, and The Powers That Be will never give up that option
  - throw10920 3y ago
    That's absolutely true, so I guess a better question is "Why do so many people online get excited about free filing systems, without also getting excited about reducing the complexity of the tax code as a complement to those systems".
    - CogitoCogito 3y ago
      How many people have you met who are excited about free filing systems, but not excited by simplification of the tax code? Personally I've never met such a person.
      - throw10920 3y ago
        It's rare that it gets mentioned on Hacker News, and the previous few times that I've brought it up, people actually attack it, like simplifying the tax code is a bad thing.
        CogitoCogito 3y ago
        I don’t think I’ve ever seen someone with the opinion that simplifying the tax code is bad. You must be reading a different internet than me.
Devos12 3y ago
Did you find any solution or help from anywhere?
Tempest1981 3y ago
Just a reminder about certain companies that share data with Meta/Google: https://news.ycombinator.com/item?id=36701706 https://news.ycombinator.com/item?id=36701706
6510 3y ago
The real joke is that they also have to check it. You fill your shopping cart with a bunch of groceries then you have to write down what you think it all costs. The shop keeper then checks if you got it right. Then they call the police for each 12.3th customer who got it wrong. The odds to get it wrong are so big the help of a different company is needed who will add up the shopping cart for you. You cant make it up.
Vixel 3y ago
This is great, but a lot of people think it will be a Intuit or H&R Block "killer". It won't. People don't pay for the "expert" tax prep, they pay for the hand holding. I have worked for HRB corporate for years and have seen countless people with simple W2's that happily pay $100+ per year just to have an office to go to, to shake a hand and talk to a person about their past year. As long as there are lonely elderly people, these businesses will always be there.
wutwutwat 3y ago
The fact we have to file income tax is stupid. The IRS knows what you owe (try not filing your taxes or filing them wrong and you'll get a bill from them for what you owe or any adjustments due to your errors), so if you're not claiming anything or have special forms, why is it needed? For people who do a standard deduction there should be nothing to file.

906 points by dwynings 3y ago

droptablemain 3y ago

If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.

sriram_sun 3y ago
Cost of policing is close to or possibly the highest expense for any city. That did not put security guards out of business.
- woodruffw 3y ago
  Why do you think this? NYC, which spends extraordinary amounts of money on the NYPD, still only spends 10% of its budget on public safety[1]. The 4 largest categories are education (20%), transportation (15%), environmental protection (15%), and housing and economic development (15%). [1]: https://www.ibo.nyc.ny.us/iboreports/understandingthebudget.pdf https://www.ibo.nyc.ny.us/iboreports/understandingthebudget....
toomuchtodo 3y ago
Just as in tech we build things that will get refactored and thrown away, it should be expected certain private sector components might be eventually deprecated when government steps in to provide as a public good.
- wolverine876 3y ago
  > it should be expected certain private sector components might be eventually deprecated when government steps in to provide as a public good I support many public goods, including this one, but they are a tool with appropriate uses just like private enterprise is. I don't want operating systems to be a government-provided 'public good'. Also, I think freedom is the core, but not only, value here, including in commerce. When government takes over, it's no longer a free market with free people.
  - jabbany 3y ago
    > I don't want operating systems to be a government-provided 'public good'. Huh. Interesting example. I actually do want to see a government produced public good operating system. Where we're going, operating systems will either be ad filled messes or locked down walled gardens. A public good option would be required to meet high bars for interoperability while also not ad funded. It's one thing to regulate away a market (make things illegal) and a very different situation if the government is just setting a bar for quality within a market.
    - wolverine876 3y ago
      > Where we're going, operating systems will either be ad filled messes or locked down walled gardens. Linux?
      - RIMR 3y ago
        Funny you bring that up, because 27% of all US Government systems run Linux. The problem is that the government doesn't give back any money, or contribute much code to the FOSS projects that they rely on. If they gave back proportionally like Linux Foundation Platinum sponsors do, they would get a return on their investment just in that they run enough Linux to benefit from contributing. China has given money to FOSS projects far more than the US does, and there is an official Chinese Linux distro available to Chinese users. Nobody is forced to use it, outside of Chinese government employees on their work machines, but like a library, it is something of value that the state can provide to those who might need it.
        throwaway2037 3y ago
        Most US gov't systems probably run RedHat Enterprise Linux. So, yeah, they do pay to develop GNU+Linux and lots of other FOSS.
  - RIMR 3y ago
    I don't think governmental functions like tax collection should be subject to the free market. Where does this end? Do we end up with private militias that compete with municipal police departments? Do we end up with private militaries that compete with the US military? Do we end up with private court systems that compete with the DoJ? Some things should not be privatized. The government allowing corporations to profit off of a civic duty like taxation, while offering no free public alternative, just anoints a handful of corporations with the gift of extracting profit from a mandatory governmental process. You should not be required to understand the intricacies of tax code, or pay for someone who does, just to file your taxes as required by law. If a criminal has the right to be provided a public defender, then every American with an income should have the right to be provided with public tax preparation service from the same government that mandated tax collection in the first place.
markkanof 3y ago
That seems like an overly broad statement. If the companies producing tax filing software were solving a problem for their users then why shouldn't they exist. Even with this new option being offered by the IRS there is still likely room for private companies to solve the same problem (tax filing) in a way which is perceived as better by some users and so still justify their existence.
- skyyler 3y ago
  >If the companies producing tax filing software were solving a problem for their users then why shouldn't they exist Because the "problem" they're solving has been solved in other countries without a profitable middleman. Intuit's continued existence in this space is dependent on their lobbying team.
  - markkanof 3y ago
    That's a slightly different issue though. Just saying that because the government has offered a solution to the problem of filing taxes doesn't automatically imply that no other organizations that are solving the same problem deserve to exist. I suppose if you are arguing that the one and only reason that tax preparation software is needed is because of Intuit's lobbying then that could be true, but Intuit's lobbying is only part of what has led to a complex tax code.
    - skyyler 3y ago
      Yes, the one and only reason tax preparation software is needed for normal people with normal incomes and expenses in 2023 is because of Intuit's lobbying. That's why people are upset about it.
- stetrain 3y ago
  If they can provide value on top of the public service and find customers willing to pay it, then they weren't killed by the public service.
- chowells 3y ago
lr4444lr 3y ago
Maybe. Or maybe a lot of people will leave refunds on the table because the software will be bad at helping people identify their deductions. Also, my wife paid a joint filing online under my SSN, and the system couldn't figure that out and claimed we were in arrears. I'm not hopeful.
- stetrain 3y ago
  How will I know the software is properly optimizing my deductions without a 30 second animated progress bar with the words "Optimizing Deductions" flashing on screen, while also advertising to me that I could be leaving savings on the table unless I upgrade to the TurboTax Pro Ultimate package for no up-front cost* * cost of TurboTax Pro Ultimate will be deducted from your refund amount, plus interest.
  - Alupis 3y ago
    Generally speaking, if you are in a position where deductions and credits matter (ie. not standard deduction), you really aught to seek a professional to review your filing before submission, or at a minimum use two different softwares to compute your taxes and look for any disagreement (in theory, they should have the same output). Either way, the $49 to use the software is trivial (under this situation) and often is only paid if you use that software to submit your taxes (meaning you can "get a second opinion" for free).
    - ghaff 3y ago
      The model is that someone with a W-2 and a 1099 or two and just taking the standard deduction should be "Yep, looks OK." If it gets more complicated than that you probably need to either spend a bunch of your own time or hire a professional.
      - nightski 3y ago
        That's basically how the services work today for that segment of citizens, and they are free.
wolverine876 3y ago
The government could theoretically make anything a public service; that standard doesn't distinguish between one industry and another. I support the IRS's new service, as a general matter (i.e., without knowing details), but you raise a serious issue.
- kdmccormick 3y ago
  Here's a better / more nuanced standard: If an industry exists because of the government and it can be replaced by a public service, then it doesn't deserve to exist. FWIW, public defenders are a public service used to interact with a government-created system, but the private legal defense industry is alive and well. So, it's not like making a public service is sufficient to kill any government-created industry.
  - wolverine876 3y ago
    > If an industry exists because of the government and it can be replaced by a public service, then it doesn't deserve to exist. It's a start, but I'd need to think of examples. I'd say if the government creates inefficiencies, such as for basic tax filing, it should remove them if possible regardless of the effect on businesses profiting from them. Off the top if my head, there could be cases where government makes a change that shifts the demand from one industry to another (that donates more to politicians).
    - kdmccormick 3y ago
      > I'd say if the government creates inefficiencies, such as for basic tax filing, it should remove them if possible The complexity of the US tax code is certainly inefficient from the perspective of someone trying to get through their taxes, but many economists would argue that it enables a very economically efficient way to soft-enforce policy and influence behavior without resorting to regulation and law enforcement. Whether the economic efficiency outweighs the bureaucratic inefficiency... I'm not sure. I guess that's where public tax software comes in.
Alupis 3y ago
I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be as easy to use or as pleasant as the existing offerings, but it will be a huge shot across all of their collective bows. Keep in mind the IRS offering a free online service for tax filing does not reduce the complexities of the current tax code - nor does it make for a more fair tax system (one where having means to access professionals reduces your perceived tax liability). This system merely means fewer people need to pay $49 a year to file taxes...
- LeafItAlone 3y ago
  Then it doesn’t sound like you disagree, because you don’t see this killing the industry.
- TylerE 3y ago
  Lobbying by the tax prep companies is a big part of how it got so byzantine in the first place.
  - l33t7332273 3y ago
    Can you elaborate on that, perhaps with some substantive example? I believe that these companies lobby to keep IRS from providing free tax prep, but I do not think that they lobby to make the tax code more complicated. It’s my understanding that the tax code is complicated as a result of disparate efforts to increase support among voting blocks, to encourage/discourage behaviors, and to reward supporters/backers.
    - RIMR 3y ago
      https://billmoyers.com/story/how-lobbying-by-tax-preparer-helps-keep-tax-day-complicated/ https://billmoyers.com/story/how-lobbying-by-tax-preparer-he...
deleted 3y ago
[deleted]
SanderNL 3y ago
There is a good chance it sucks and is wonky as hell, making the value proposition of proprietary solutions even more attractive.
- enraged_camel 3y ago
  It might suck initially, but that doesn't mean a lot. Healthcare.gov works pretty well today (not perfect but gets the job done for most people), despite the shoddy rollout.
- dheera 3y ago
  That and also it's not so useful if it can't import from bitcoin.tax and TurboTax exports, since there's so much in tax prep that depends on numbers from the year before, and ultimately the value of tax prep software to me is roughly the time I spend on tax prep vs. what I could get in terms of hourly rate as a hypothetical software consultant outside my day job. If I have to manually input 5 billion crypto and stock transactions including every damn weekly staking reward just to pay taxes it's just bleh.
- PaulDavisThe1st 3y ago
  NM state tax filing online is an absolute gem of web-based government interaction. The last 3 years, my state tax filing (I'm self employed) have taken less than 5 minutes each time. It doesn't to suck.
czbond 3y ago
Only the free'ish customers (eg: Easy 1040) will care - and they were low profit to companies like Intuit, etc anyways. All other taxpayers will continue to use systems that ideally maximize deductions as government continues to tax endlessly.
not2b 3y ago
Businesses will still need tax assistance. But there is no reason for a person whose income comes only from a salary, interest on savings and a brokerage account to need paid help to file taxes. The IRS already has all of the numbers. They could pre-fill the forms with those numbers and just have the taxpayer approve them.
- sokoloff 3y ago
  The IRS processing of the data sent to them by various reporting requirements is much more like what we'd call "eventually consistent". If you ask for a transcript of your tax account ("what does the IRS know about my tax situation?") on April 15th and again 6 months later, the second report is very likely to be complete, while the first is not nearly as likely.
  - not2b 3y ago
    So, do it anyway and let the IRS eventually send a correction (refund or bill) in the rare cases where it makes a difference. Or allow the taxpayer to make corrections if they know about them. But probably the number of errors will go down; well-intended taxpayers often copy numbers wrong, and that probably happens more often than "eventually consistent" issues.
whyenot 3y ago
Will the IRS version also do my state taxes? Can it "slurp" in the statements from my brokerage accounts? Can it do rental income? I have no love for Intuit and all the rest, but even with the constant up-selling and the other BS you have to put up with, it does help me tremendously with what would otherwise be a complicated task that I dread doing every year.
RicoElectrico 3y ago
Enriching oneself at the cost of others really seems like the business modus operandi in the USA these days. It is a win, although only a beginning of what should come.
A4ET8a8uTh0 3y ago
I would not go that far, but it is hard not to notice how bad the main competitors in that space have gotten. They are using just about every single dark pattern they can possibly get away with. Some competition from a public service may be warranted in this case.
robertlagrant 3y ago
> If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place. It was created by a public service. It would be better if they'd just made a rule that those with super simple tax affairs just didn't need to file, as we have in the UK. But there's probably no pork in just making things better.
- sys_64738 3y ago
  The Tory government introduced this filing BS in Britain a while back. You never used to have to file anything with the Inland Revenue before the Tories.
  - robertlagrant 3y ago
    Can you cite this? I thought you just have to file if you make over a certain amount, or you have a setup that requires filing (e.g. you rent part of your house out, or you're a sole trader).
    - sys_64738 3y ago
      What the heck do you mean can I cite it??? I LIVED there so I don't need to cite anything.
      - robertlagrant 3y ago
        You cite things to give evidence for other people to check, as opposed to taking your word for it.

deleted 3y ago

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m463 3y ago

will it have embedded links to google.com like https://dmv.ca.gov https://dmv.ca.gov ? (for example, this irs page links to googletagmanager)

jrockway 3y ago
I mean, if using googletagmanager makes you mad, wait until you hear about the whole id.me business: https://epic.org/report-id-me-lied-to-the-irs-about-wait-times-for-its-identity-verification-service/ https://epic.org/report-id-me-lied-to-the-irs-about-wait-tim... I don't think there is any stipulation that the US government can't use products sold by US based companies. In fact, they enjoy doing it. You should ask your elected representatives to prohibit tracking on government websites; if they pass a law, the IRS's web design team will follow it.

Analemma_ 3y ago

I've been using FreeTaxUSA for a while now to do my taxes, and I like it very much. (If you use TurboTax or H&R Block or something, I strongly recommend giving FreeTaxUSA a look). I was sort of wondering if the IRS would just buy them wholesale and use that as the free file software, since it's already "finished" and making another one would be duplicated effort. But is there precedent for that, the government just buying a private company for its IP?

hammock 3y ago
>is there precedent for that, the government just buying a private company for its IP? The government's preference would probably be to contract with them and license it.
- toomuchtodo 3y ago
  US Digital Service and the current White House MO around digital service delivery [1] operates a bit differently. IRS modernization [2] [3] will be owned internally. Their systems are the iceberg under the surface, the website for citizen consumption is the little bit above the surface. They're hiring people who know what they're doing (from page 15 of the modernization pdf): > Our overall success will depend on several special legislative proposals and regulatory authorities that we believe are appropriate for an effort of this scope and importance: > Engaging the Office of Personnel Management to utilize existing direct hire authority for IT modernization positions and/or broadening government-wide critical pay authority > Seeking reauthorization of IRS Streamlined Critical Pay Authority that expired in 2013 > Ensuring funding is available for multiple fiscal years at somewhat predictable intervals. [1] https://www.whitehouse.gov/omb/briefing-room/2023/09/22/fact-sheet-building-digital-experiences-for-the-american-people/ https://www.whitehouse.gov/omb/briefing-room/2023/09/22/fact... [2] https://www.irs.gov/newsroom/irs-modernization https://www.irs.gov/newsroom/irs-modernization [3] https://home.treasury.gov/news/press-releases/jy1666 https://home.treasury.gov/news/press-releases/jy1666 | https://news.ycombinator.com/item?id=36976331 https://news.ycombinator.com/item?id=36976331 (please consider a tour of duty: https://www.usds.gov/apply https://www.usds.gov/apply | no affiliation, just an engaged citizen)
3y ago

datadrivenangel 3y ago

I hope this is good! I've been happily using FreeTaxUSA for the last several years, which has a small price for state tax submissions and no gotchas after H&R block jumped me with over a hundred dollars in fees at the end.

etskinner 3y ago

Before everyone gets too excited: This will probably only apply to simple tax situations: If you have more than these, you might not be able use it: #Income reporting W-2 wage income Social Security and railroad retirement income Unemployment compensation Interest of $1,500 or less #Credits Earned Income Tax Credit Child Tax Credit Credit for Other Dependents #Deductions Standard deduction Student loan interest Educator expenses

jaywalk 3y ago
It'll only apply to simple tax situations for this initial pilot launch.
amalcon 3y ago
On the other hand, that's a whole lot of people -- probably almost everyone who is not a homeowner, and quite a few who are.
- ghaff 3y ago
  That list suggests that if you have a 1099 (which I assume is most people with meaningful savings), you probably won't qualify.
  - bigbillheck 3y ago
    I think there are probably a lot fewer people with meaningful savings than you might think.
    - ghaff 3y ago
      It looks like about half have brokerage accounts although some of those are probably just 401Ks and there's obviously a strong correlation with income levels.
      - jancsika 3y ago
        I'd bet once you start digging down into the details, having a brokerage account becomes less and less relevant as a metric for who can pay simple taxes. For example, how many of those respondents in the Gallup poll answered yes only because they have a Simple IRA? For those respondents, their contributions don't preclude them from taking the "simple tax" branch when filing taxes. (That's the "simple" part-- well, one of the simple parts, at least for the employee.) Moreover, there were some changes to simple IRA administration in Secure 2.0 act that make automatic enrollment mandatory (for the employer to do 3% matching or whatever). So the category of respondent I mentioned above-- who technically has a brokerage account but can file simple taxes-- is likely to grow quite a bit in the next few years and decades. Edit: I'd also be interested in how many people with simple IRAs contribute anything more than the 3% matching-- I'd bet its more than a majority. Perhaps that could change now that Secure 2.0 lets them contribute to a Roth IRA.

nlh 3y ago

This is only tangentially-related, but I know I'm asking the right audience: I switched, blissfully, away from Quicken/Quickbook/Xero/all that heavy crap to very simple and elegant textfile-based accounting (ledger/hledger) and it's been the best and most flexible accounting experience I've ever had. I finally feel completely in control of my companies' books. Is there an equivalently-blissful tax-filing software/service? I don't want to go back to TurboTax, and with several single-member LLCs I'm probably beyond the scope of the IRS' free service. Anyone have any suggestions?

wolverine876 3y ago
> I switched, blissfully, away from Quicken/Quickbook/Xero/all that heavy crap to very simple and elegant textfile-based accounting (ledger/hledger) and it's been the best and most flexible accounting experience I've ever had. I finally feel completely in control of my companies' books. I love the idea, but not being an accounting expert (maybe you are), I'd be afraid that some immaturity or lack of expertise in the software would cause a big problem in a critical way. What makes you confident in it? Also, how do you share data with accountants, etc.?
crazygringo 3y ago
If you're looking for the same level of manual control because you don't want the "wizard" interface, you should use "Free File Fillable Forms" [1], which is the product of a public-private partnership with the IRS. It's literally just filling out the paper forms except in a web interface and it does most of the math for you. And then you can file electronically for free regardless of your income level, and it produces a final PDF with all forms filled out for your files. It can be tricky to do your taxes the first time around depending on their complexity, but the good thing is that once you figure it out, you just use the previous year's PDF's as a reference for the current year's. The lines move around a little bit year-to-year but it's usually the same idea. And it becomes pretty obvious what has changed (that requires research), and you can figure out if anything has changed in your own financial situation that warrants filling out a new line or new set of forms. (I don't believe there's anything specifically textfile-based. But this is definitely the electronic version of doing your taxes "manually" with full control.) [1] https://en.wikipedia.org/wiki/Free_File#Free_File_Fillable_Forms https://en.wikipedia.org/wiki/Free_File#Free_File_Fillable_F...

joshribakoff 3y ago

They already have this in some form, its called “free fillable forms”, and it sucks. For example if there is any minor issue like something off by a cent it fails to submit and won’t tell you which field has an error or what the error is. Although its not officially maintained by the IRS, I don’t think… if i recall Intuit maintains it as part of an (arguably nefarious) agreement with the IRS. It’s presumably intentionally made to suck and hard to find.

sidewndr46 3y ago
I got some incomprehensible statements one time from a joint venture. I paid an accountant to do my taxes since I couldn't figure out. There answer to me was "I have no idea what this is trying to say, so I'll just submit it. If you get audited let me know and we'll work it out"
- bluGill 3y ago
  If you have a joint venture then your situation probably is complex enough that an accountant is something need anyway. At that point have them do the taxes as well. Most people don't have that complex a situation.
hcrisp 3y ago
I've used it for many years and never had a problem. It is like filling in a PDF form but has a "Calculate" button which runs all the math for you (apart from some tables, etc. which you need to look up yourself). So I'm not sure how you would get off by a cent. Federal taxes only. Except for entering in your W-2s by hand, it's pretty straightforward. You can save a PDF copy to your local drive. The nice thing is you save postage and do not have to pay someone to prepare / file it for you.
jrib 3y ago
yeah, I had to submit an amended return because free fillable forms decided to discard a form and went through with the submission anyway :(

mdaniel 3y ago

Does that mean I can FOIA for the source code? I ask in all seriousness: I believe some things are withheld/redacted due to "national security" but if they hard-coded mainframe credentials in their source code that's not my fault

h2odragon 3y ago
Much government source is public domain by default, and they are decent about publishing it. If this is owned by the IRS, then probably it will be public. If its a service contracted out, then perhaps not.
NegativeK 3y ago
FOIAs can be incredibly easy; you should give it a try and post about it!

pastor_bob 3y ago

>Arizona, California, Massachusetts and New York have decided to work with the IRS to integrate their state taxes into the Direct File pilot for filing season 2024. There's the notable point. If states integrate into it, it's a game changer. No need for the vast majority of filers to use any 3rd party.

tombert 3y ago

This is great news; no matter how restricted it may be initially, I think having a "guaranteed-free" tax filing system will be great for most people, especially lower-income people. The private companies have demonstrated pretty clearly that they will do everything they can to avoid people actually having free tax filing, and while ~$50-100 might not seem like a ton of money, keep in mind that at the current United States minimum wage ($7.25 as of this writing), it would take upwards of working 6-14 hours just to pay for tax filing. $100 is a lot of money when you're not a yuppie software engineer. I suspect I did enough crazy stuff with stocks this year that it probably won't apply to me at first, but hopefully by 2025 or 2026 I can stop giving money to Intuit or Jackson Hewitt.

radlad 3y ago
FWIW, FreeTaxUSA[0] is much cheaper than Intuit and has worked great for me the past few years. I find it slightly easier than TurboTax, in fact. [0] https://www.freetaxusa.com/ https://www.freetaxusa.com/
- coconut08 3y ago
  sorry... cheaper? surely a place called free tax usa would be free?
  - BizarroLand 3y ago
    They are free for federal electronic filing, and charge a small fee for state filing.
  - ziddoap 3y ago
    Well... free is cheaper than not free.
  - starik36 3y ago
    It is free for federal taxes. The only thing that you are paying for are state taxes.
  - varjag 3y ago

parhamn 3y ago

One thing I really want to see is an official form where if you answer all the questions, to the best of your knowledge correctly, protects you from liability for incorrectly filing your taxes. End of the day with TurboTax and co, you, as expected, get a "not our system, not our problem" type response when dealing with the post-filing ramifications. There seems to generally be a lot of "I'm not sure if I did it right" anxiety in the general population.

hiatus 3y ago
Even if a CPA does your taxes, you still have to sign them. I think intuit offers some kind of service for audit protection post filing.
TylerE 3y ago
It could be so much easier. In most of Europe "filing" your taxes involves getting a short letter essentially saying you made $x, and <owe/are owed> $y, with short return forms to either agree, or file an appeal.
- davchana 3y ago
  Every time this comment is posted about non usa geographic area, somebody will post, but in US you have deductions, allowance, dividend, smaller profits, gifts. Which for sure all other countries too have, and somehow they have sorted this out. I think its the lobbying and the general mistrust of government "telling" a number vs calculating the number yourself. (Although if that is a wrong number, government/IRS tells the correct number).
OkayPhysicist 3y ago
If you make a good faith attempt at filing your taxes, you won't need liability protection. If you screw it up, you'll get a (relatively) polite message from the IRS that your taxes were screwy and you owe them money (or, occasionally, they owe you money).
Anechoic 3y ago
protects you from liability for incorrectly filing your taxes. In practice, it's not really needed. The thing is (and I realize that it's not the general perception) if you sincerely try to file your taxes and you screw up, the IRS will generally work with you to fix things. Sure, if you go all sovereign-citizen/Wesley Snipes and refuse to acknowledge taxes they'll kick in the door and take all your stuff. But if you accidentally report select head-of-household instead of single, and you can explain why you did, the IRS won't ruin your life.

thekrowndnf 3y ago

[dead]

atum47 3y ago

Declaring taxes in Brazil is free, but it's hard work (if you dabble with stocks, for instance). For 1/5 of the value of the minimum wage you can hire a accountant that does it for you. I think the service is worth it's price. All i have to do is send them a bunch of documents and they make sense out of it.

sircastor 3y ago
This is the way it should be here in the US, and this is the way it works in a lot of countries. The tragedy is, we all know it, and we all want it to change, but there are a few people who don't want it to change, and they're empowered to make it that way. I hope this IRS effort works out.
- guerrilla 3y ago
  > The tragedy is, we all know it, and we all want it to change, but there are a few people who don't want it to change, and they're empowered to make it that way. It's almost as if you don't actually live in a democracy.
- dudul 3y ago
  If I read the parent correctly it is already how it is in the US. If you do it yourself it is free, and for most people it wouldn't even be that complicated.

deleted 3y ago

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zzzeek 3y ago

Credit to Joe Biden and the Inflation Reduction Act for making this possible. If Trump wins again he's going to have a lot of work destroying all the progress Biden has made in just one term.

SV_BubbleTime 3y ago
My satire detector is surely broken. It’s just wobbling between wtf and woosh. It’s OK, I don’t need to understand everything all the time.
- zzzeek 3y ago
  Read the PR. it explicitly credits the Inflation Reduction Act for funding and making the whole thing possible.
  - SV_BubbleTime 3y ago
    Oh I read it. I just didn’t, ok. I wonder if I buy the company line anywhere?
    - zzzeek 3y ago
      im not sure what argument you're making. are you claiming the IRS' statement is just fabricating that this program has anything to do with the congressional bill it's actually proposed and funded within ?
      - willdr 3y ago
        That's not necessarily uncommon is it? It was my understanding that bills get passed with extra funding for relatively disconnected causes all the time. They may have to credit the bill under which this was passed, but that doesn't necessarily reflect positively on the rest of the bill or the government's fiscal policy in general.
        3y ago

zelon88 3y ago

I always thought it was weird that something so complex, easy to mess up, and important to the government would require a third party external dependency. For a while towards the end it really kinda became a shining example of late stage capitalism. You, for all intents and purposes, NEEDED to do business with one of these handful of entities or you are in violation of the law. If you can't afford that you'll have to do this literally impossible stack of paperwork instead.

OkayPhysicist 3y ago
The "stack of paperwork" is definitely far from impossible. You have form 1040, which gives you a run-down of every possible form you need to reference. You fill out the boxes with the info it wants, then you go down the list, filling in each number box that applies to you: Got W-2s? Probably, attach 'em and sum them up. See a phrase you don't recognize? Read the relevant instructions. Got interest? Time to fill out a Schedule B, which itself references some other forms, and attach some 1099s. Sell any investiments? Schedule D, which might have you fill out an 8949 (strictly speaking, you can skip this one if all your investments have declared basis on your 1099-Bs that you received from your brokerage). If you think you might have more deductions than the standard, there's Schedule A, but for most people you can safely skip that one and take the standard. Taxable income determined! Then the taxes section contains a bunch of forms that apply to you if you're in certain situations, maybe you have a kid (Schedule 8812), the instructions are very helpful in telling you what you need to care about here. The first box is important, it includes your income tax which the instructions will tell you how to calculate. Sum up your witholdings from the W-2s and 1099s to figure out how much you've already paid the government, then figure out if you owe the fed money or they owe you. Sign, stick in an envelope, and send. Whole process takes a couple hours the first time, when you need to learn what you actually need to fill out, and in future years less than 2 hours. If you can read at a 6th grade level and do basic addition and subtraction you can fill out your tax forms.

deleted 3y ago

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greymalik 3y ago

Misleading title here that differs from the title in the linked article - it’s a pilot in 13 states, not generally available.

deleted 3y ago
[deleted]
dang 3y ago
I've changed it now. Submitted title was "IRS will officially launch free online tax filing service for 2024 tax season".
- tpmx 3y ago
  Please consider punishing the marketing guy doing this submission. This was not done by chance or mistake.
  - dang 3y ago
    I don't understand what you mean.
deleted 3y ago
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deleted 3y ago

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jjulius 3y ago

To clarify: This is not a full launch, it's just a "limited pilot" that will only be available in 13 states in 2024. Arizona California Florida Massachussetts Nevada New Hampshire New York South Dakota Tennessee Texas Washington Wyoming Someone please correct me if I'm wrong.

enahs-sf 3y ago
AZ, CA, FL, TX, NY alone gets you to about 120m people. This is a pretty big first test.
- PaulDavisThe1st 3y ago
  The IRS says it will not be available to all tax payers in those states. It sounds as if it will be a fairly small number initially.
- metaphor 3y ago
  > AZ, CA, FL, TX, NY alone gets you to about 120m people. Not quite; ~71.8 million constrained to just individual income tax filings based on 2022 stats[1]. Excludes estate, corps, gift, tax-exempt orgs and excise, but includes both paper and electronic filings. AZ 4,197,918 CA 23,209,479 FL 14,563,047 TX 16,750,330 NY 13,115,425 --------------- 71,836,199 =============== US 204,434,236 Surely, only a subset will qualify. [1] https://www.irs.gov/statistics/soi-tax-stats-state-data-fy-2022 https://www.irs.gov/statistics/soi-tax-stats-state-data-fy-2...
InitialLastName 3y ago
By my count that's about 146 million people, so a notch less than half the US population.
silisili 3y ago
Missed Alaska, the other no income tax state.

vichle 3y ago

For real? Sweden has had this for like 15 years. Perhaps if you paid a bit more taxes your government wouldn't be so useless (:

dang 3y ago
Nationalistic flamebait is not allowed on HN, regardless of country, so please don't post like this. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

jncfhnb 3y ago

The inflation reduction act is such a low key mvp of a bill. This is great

dang 3y ago

It's CPS time again. Related: Tax prep companies: $90M lobbying against free tax-filing - https://news.ycombinator.com/item?id=37363616 https://news.ycombinator.com/item?id=37363616 - Sept 2023 (231 comments) IRS moves forward with a new free-file tax return system - https://news.ycombinator.com/item?id=36804710 https://news.ycombinator.com/item?id=36804710 - July 2023 (221 comments) IRS tests free e-filing system that could compete with tax prep giants - https://news.ycombinator.com/item?id=35950836 https://news.ycombinator.com/item?id=35950836 - May 2023 (567 comments) Call on the IRS to provide libre tax-filing software - https://news.ycombinator.com/item?id=35705469 https://news.ycombinator.com/item?id=35705469 - April 2023 (129 comments) 60M Americans have taxes so simple the IRS could do them automatically - https://news.ycombinator.com/item?id=35476709 https://news.ycombinator.com/item?id=35476709 - April 2023 (277 comments) Lobbyists begin chipping away at Biden’s $80B IRS overhaul - https://news.ycombinator.com/item?id=35381701 https://news.ycombinator.com/item?id=35381701 - March 2023 (214 comments) Intuit pouring money into lobbying amid push for free government-run tax filing - https://news.ycombinator.com/item?id=34840039 https://news.ycombinator.com/item?id=34840039 - Feb 2023 (178 comments) IRS builds task force to explore running its own free e-file system - https://news.ycombinator.com/item?id=34764952 https://news.ycombinator.com/item?id=34764952 - Feb 2023 (199 comments) IRS Free File: Do Your Taxes for Free - https://news.ycombinator.com/item?id=34462122 https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247 comments) IRS will look into setting up a free e-filing system - https://news.ycombinator.com/item?id=32753099 https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408 comments) The IRS could be on the verge of changing the way Americans file their taxes - https://news.ycombinator.com/item?id=32550841 https://news.ycombinator.com/item?id=32550841 - Aug 2022 (17 comments) IRS will study free tax filing options - https://news.ycombinator.com/item?id=32502321 https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25 comments) TurboTax’s fight against free tax filing - https://news.ycombinator.com/item?id=31072202 https://news.ycombinator.com/item?id=31072202 - April 2022 (394 comments) Filing taxes could be free & simple. H&R Block & Intuit lobby against it (2017) - https://news.ycombinator.com/item?id=30856968 https://news.ycombinator.com/item?id=30856968 - March 2022 (114 comments) FTC sues Intuit for its deceptive TurboTax “free” filing campaign - https://news.ycombinator.com/item?id=30846071 https://news.ycombinator.com/item?id=30846071 - March 2022 (587 comments) Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments) Why do Americans have to pay much to file their tax returns when the IRS knows? - https://news.ycombinator.com/item?id=30267361 https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22 comments) Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments) California tried to save the nation from tax filing, then Intuit stepped in - https://news.ycombinator.com/item?id=28944200 https://news.ycombinator.com/item?id=28944200 - Oct 2021 (283 comments) The IRS has a big opportunity to fix the way Americans file taxes - https://news.ycombinator.com/item?id=28177289 https://news.ycombinator.com/item?id=28177289 - Aug 2021 (12 comments) -- GOTO https://news.ycombinator.com/item?id=35970518 https://news.ycombinator.com/item?id=35970518

ap77 3y ago

Doesn't change much. I still need to pay my CPA thousands to prepare the tax return.

ssalka 3y ago

> eligibility to participate in the pilot...will be limited to taxpayers with certain types of income, credits and deductions – taxpayers with relatively simple returns. The IRS today announced it anticipates specific income types, such as wages on a Form W-2, and important tax credits, like the Earned Income Tax Credit and the Child Tax Credit, will be covered by the Direct File pilot. This is what I was mostly curious about. So, I'm guessing things like ISOs, AMT, capital gains from investments etc would not be supported by this service yet.

t3rabytes 3y ago
The bottom of the blog post has the eligibility requirements list/things-the-pilot-will-support: Income reporting -W-2 wage income -Social Security and railroad retirement income -Unemployment compensation -Interest of $1,500 or less Credits -Earned Income Tax Credit -Child Tax Credit -Credit for Other Dependents Deductions -Standard deduction -Student loan interest -Educator expenses

whatever1 3y ago

Why does the average American have to file taxes? You know my W2 you know my family members. Just send out the withhold amount to my employer.

nemo44x 3y ago
Well, you could have done a variety of things that aren't reported. For instance, donating money/time/goods, winning from gambling/etc, inheriting money/property, winning things/money, face deprecation in assets like real estate, etc. Payroll and taxes have about a million edge cases and it's one of the reasons payroll is such a bloated industry. I agree it's probably a bit much for most people though and not filing should be akin to not reporting anything else and the IRS should automatically calculate your return and mail a check or a bill if you owe.
sys_64738 3y ago
There are too many additions to the tax code beyond that. Really, if they cut away 95% of the cruft then it could be dramatically simplified. Everybody has their thing they hold onto for dear life in a tax code.
- bluGill 3y ago
  Most of the cruft has been cut out (as of 1986!) People are just so used to accountants and tax programs that they never look at the details to realize how simple their tax situation really is. This is encouraged by the tax industry.
camdenlock 3y ago
Psychological warfare. A direct and personal reminder of our place.
bluGill 3y ago
85% of Americans should only have to return the postcard "this is what we think your situation is". The other 15% have something the government doesn't know and needs to file. The other 10% should have an accountant do their taxes and not software (which leaves a few% lost, not quite complex enough for an accountant, but not enough of them to support software for their situation).

Zigurd 3y ago

Retail financial services are a source of misery for low income people. Providers don't want those customers, and it shows. Predatory products and service providers prey on the less well off. Postal banking would be a good next step.

WheelsAtLarge 3y ago

This is great. I wished the individual states would do this too for their tax filers.

ksherlock 3y ago
Move to Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington or Wyoming.
Rebelgecko 3y ago
California already has one, and it actually has fewer limitations than this federal pilot (it handles itemization and capital gains and such, although that's only because california doesn't have a separate capital gains rate)

nemo44x 3y ago

Wouldn't there just be a lot of money made by someone offering free filing and then offering to give you your return immediately for a fee of like 10%? Is anyone doing this?

swarnie 3y ago

Welcome to the 21st century American friends, enjoy your stay. God knows why it took this long.....

yieldcrv 3y ago

I like how this discussion is always “Free vs Turbotax” and everyone with a CPA just has to pretend they dont do that

1270018080 3y ago

A dream come true. I’ve been asking for this for years.

rqtwteye 3y ago

Do you still have to enter all your data or does it prefill the data it already knows like W-2 and 1099? That’s where the real benefit comes in my opinion.

mrbonner 3y ago

I hope the next step would be to tax me and let me decide to dispute if I see something not right. Most of us working with a W2 will have our tax filing simplified and cheap.

kouru225 3y ago

Living in New York never gets old…

hintymad 3y ago

Will this system integrate with all the banks, exchanges, registered businesses, and etc? I find that 90% of the time spent on tax filing is gathering data. Turbotax does offer some integration, but the experience was not necessarily smooth.

whalesalad 3y ago
Is a CSV not a good API? Most systems will allow you to export data in a columnar CSV format. Being able to then import these would solve the problem. "Swivel chair handoff"
- hintymad 3y ago
  In that case I'll have to log in to each account, find the right place to download data, download them, and import them to my tax system. I'd rather have a turn-key solution. And I definitely have no interest of writing a program to automate such task.
  - deleted 3y ago
    [deleted]
  - whalesalad 3y ago
    to connect your banks to <insert xyz tax tool> you will also need to login to each account. how many accounts do you possess? seems like a non issue.

hedora 3y ago

The description of this makes me skeptical. People have been asking for a system where the IRS does your taxes for your, sends you the draft, and you add in any deductions, etc. They already do your taxes in the background to confirm your return is correct, so this is not significantly more work for them (in fact, it is probably less work). In some countries with such a system, unless you intentionally lie, you are absolved of legal liability if the government screws up your taxes. The article makes it sound like they are building a crappy turbo tax clone instead.

foota 3y ago
That might take more work in terms of process changes, but the setup would be there.
RC_ITR 3y ago
>They already do your taxes in the background to confirm your return is correct This is a common misconception. Most places that send you forms also send them to the IRS (but by no means all places). The IRS makes sure that the information you put in your forms is the same as the forms they got, but they know nothing about your dependents, whether you pay mortgages interest, etc. Now, the counterpoint to that argument is that c.90% of people just take the standard deduction anyway now that there's not SALT, but the argument there is that we should move completely away from deduction-driven taxes (which is probably the solution). As for TurboTax et al, those places are not sending your forms to every state tax agency (why do people always forget about state taxes in these threads?), so there's still very much a need for some solution there. Probably IRS data sharing, but good luck getting all the states to agree with the Feds on tax forms (just look at the SALT battle).

gerdesj 3y ago

There are lots of comments along the lines of "xxx is cheap" Why on earth do you need a third party for your tax calc and resolution? It is surely the antithesis of the "land of the free" and all that stuff. In the boring old UK I login to a govt. run website to do my annual tax self assessment. My P60 is already filled in (that's my PAYE - pay as you earn, my normal salary) I'm a company director too so I have dividends and expenses and offsets etc to worry about. It takes around an hour to complete. Most UK employees don't do self assessment. PAYE is such a simple and obvious idea - routine taxation should be done by routine.

willdr 3y ago
You're expecting coherency in the American libertarian mindset. There is none. "why should the government control the means of tax filing! I need to be free to pay a private company to do it!"
- 0xParlay 3y ago
  Libertarians who want to pay taxes.. Now there's a powerful lobby. Have you considered starting a think tank with your political acumen lol
- MBCook 3y ago
  It’s not just that. Remember this is normal in the US. Paper sucks. Tax filing helpers (people/software) have always cost money. “The government sucks” and won’t try to help you. And, oh yeah, ads and tax prep stores everywhere. No one questions it. They don’t like it, but they accept it. Just like so many other things in the US because we’ve never seen anything else.
  - refurb 3y ago
    I’ve paid taxes in countries where it pre-filled forms. Guess what I do? I get all my forms together. Look up the numbers on the forms. Double check the entries on the fillable forms are correct. Then I get my paystubs, I check the deductions, double check the prefilled form is correct. So what did it save me over the way US taxes are done? The form prefilled the numbers, that’s it. All the rest is the same. Same collecting forms, same doubling checking math. And why? Because mistakes are made. My employer sent the wrong numbers in, so the prefilled form was incorrect and would have cost me about $1,000 in extra tax. If you want to make tax filing better, make the tax code way more simple. I’ve lived in countries where the tax form was 2 pages with 12 entires. That’s it. Now that is the way to go. I could care less about fillable forms.

tiltowait 3y ago

I'm glad. I've used Cash App Taxes the past few years, and while it's free (including state) and an easy interface, I'm well aware I'm the product. Presumably/hopefully that will not be the case with this new system. I'm in one of the listed states, so I'm ... not exactly looking forward to trying it out, but definitely curious!

lbrito 3y ago

It is mind-boggling how far behind the US is in taxes and retail banking. News like this always amaze me.

pard68 3y ago

I have my home/property loan through a coop (a FCS institution) and so I get dividends every year on my shares. It amounts to about 1.5x my monthly payment. Because of this I have F-income to declare and so most free offerings are off the table for me. I used the FileFreeUSA and TurboTax Federal Free in the past and it worked well. I just use TT's paid offering now for the F-income declarations.

deleted 3y ago

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greg7mdp 3y ago

I'm surprised Intuit allowed this to happen. It almost look as if the govt is working for the people.

toastal 3y ago

Almost none of the “free” or affordable options work the minute you put in an international address. Uncle Sam is one of the rare cases of taxing its citizens abroad, but everything about getting taxed abroad is more complicated.

reustle 3y ago
As an expat for 10 years now, I’ve taken that as the “you gave up on America“ tax
- toastal 3y ago
  Like when Biden said COVID vaccines for all Americans & then the health minister or whatever had to walk it back clarifying that that doesn’t apply to those taxpayers living abroad.

oldbbsnickname 3y ago

No thanks to Intuit who had been stymieing it for profit for 20+ years. 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...

codetrotter 3y ago

Can it calculate taxes on Bitcoin?

stainablesteel 3y ago

wow maybe we can automate it next

jxi 3y ago

Tax year 2024 means the filing due in April 2024 or the one in April 2025?

iNeal 3y ago
April 2025

throw10920 3y ago

Why not start with simplifying the tax code, instead of letting it metasize in complexity, and then laying more complexity on top with software packages?

slater 3y ago
Because complexity is how you get loopholes, and The Powers That Be will never give up that option
- throw10920 3y ago
  That's absolutely true, so I guess a better question is "Why do so many people online get excited about free filing systems, without also getting excited about reducing the complexity of the tax code as a complement to those systems".
  - CogitoCogito 3y ago
    How many people have you met who are excited about free filing systems, but not excited by simplification of the tax code? Personally I've never met such a person.
    - throw10920 3y ago
      It's rare that it gets mentioned on Hacker News, and the previous few times that I've brought it up, people actually attack it, like simplifying the tax code is a bad thing.
      - CogitoCogito 3y ago
        I don’t think I’ve ever seen someone with the opinion that simplifying the tax code is bad. You must be reading a different internet than me.

Devos12 3y ago

Did you find any solution or help from anywhere?

Tempest1981 3y ago

Just a reminder about certain companies that share data with Meta/Google: https://news.ycombinator.com/item?id=36701706 https://news.ycombinator.com/item?id=36701706

6510 3y ago

The real joke is that they also have to check it. You fill your shopping cart with a bunch of groceries then you have to write down what you think it all costs. The shop keeper then checks if you got it right. Then they call the police for each 12.3th customer who got it wrong. The odds to get it wrong are so big the help of a different company is needed who will add up the shopping cart for you. You cant make it up.

Vixel 3y ago

This is great, but a lot of people think it will be a Intuit or H&R Block "killer". It won't. People don't pay for the "expert" tax prep, they pay for the hand holding. I have worked for HRB corporate for years and have seen countless people with simple W2's that happily pay $100+ per year just to have an office to go to, to shake a hand and talk to a person about their past year. As long as there are lonely elderly people, these businesses will always be there.

wutwutwat 3y ago

The fact we have to file income tax is stupid. The IRS knows what you owe (try not filing your taxes or filing them wrong and you'll get a bill from them for what you owe or any adjustments due to your errors), so if you're not claiming anything or have special forms, why is it needed? For people who do a standard deduction there should be nothing to file.