6 ms·

US taxes were pretty cumbersome before Intuit et al. Intuit wouldn't appear if not that. So your quote may partially explain resistance to change, but not cause

US taxes were pretty cumbersome before Intuit et al. Intuit wouldn't appear if not that. So your quote may partially explain resistance to change, but not causes.

Retric 3y ago
Taxes weren’t particularly difficult if like most people you were overpaying before this software showed up. The complexity was originally a way to effectively have different rules for people with accountants than regular citizens thus allowing politicians to shift the tax burden without making the carveouts obvious. Now days we just blatantly tax people living off investments less, etc. Thus defeating the original purpose of that complexity.
- ghaff 3y ago
  And the reality today is that, if like a lot of people, you just have a W2 and maybe a 1099 or two, while the 1040 form is probably a bit intimidating, it's pretty straightforward if you're just taking the standard deduction as most people do since Trump era tax changes. Basically, if you're eligible for any of these direct-file arrangements, your taxes are pretty easy to file anyway. I'm all for simplifying tax filing but if you're just filing basic taxes and are willing to forgo any deductions you may be eligible for such as energy efficiency, it's pretty straightforward.
  - amerkhalid 3y ago
    I think they should get rid of all deductions at the individual levels. They just cause confusion and hide true cost of things. For example, I went to buy Jeep. 4xe version was $8000 more. But its battery lasts only 2-3 miles and it would have taken forever to breakeven. But dealership kept insisting that I will get $6000 in tax rebate/deductions so the actual cost is only $2000 more. They had marked up the car by how much government was going to give rebate on and there was no savings for a taxpayer. I tried to have them issue give me discount now and claim my car on their taxes but, of course, that was not going to work. I ended up buying a cheaper model. EDIT: Just checked the range, it is actually 21 miles on battery, which would have been enough for my usage. At that time, salesperson informed me that it was 3 miles or so. At 21 miles per charge, I may have bought 4xe. Math still doesn't workout, since I work from home I probably fill the gas tank once every 2-3 months. About $200-300 per year for gas. So it would have taken 7-10 years to breakeven after rebates.
    - thfuran 3y ago
      >They just cause confusion and hide true cost of things. Hiding the true cost is the point. Or rather, altering the true cost to incentivize something or other.
    - hedora 3y ago
      There are two limits on that deduction that are relevant. They can’t be applied to foreign built cars, and there is an income cap. The Koreans (Kia, Hyundai) found a loophole: The restrictions do not apply to commercial fleets, including vehicles leased to consumers. So, they offer lease incentives that are structured to give you $7500 off MSRP if you buy the vehicle out of a lease after the first month. No IRS paperwork required, and no chances of finding some other gotcha when you file your taxes. If the law hasn’t changed by the time I buy a new EV, I’m going to insist on this, regardless of whether it is domestic made.
    - Retric 3y ago
      The dealer wasn’t really lying just unclear. The car is not designed to stay fully electric until the battery hits zero because the ICE engine is only 150hp. Instead it’s optimized to be a hybrid that’s reserving battery power for acceleration, which lets the engine stay in more efficient and lower RPM ranges for much longer. You can press a button every time you get in to drain the battery but that’s really not the intended use. Anyway, the subsidy is really designed to setup the used car pipeline. In 20 years someone with significantly less money is probably going to be driving your car and they aren’t going to be thrilled with having ~14mph.
    - jghn 3y ago
      > They had marked up the car by how much government was going to give rebate on and there was no savings for a taxpayer This is the thing that always gets me. After having seen too many examples of this I soured on these incentivized deductions. The benefit always seems to go to the middle man.
      - JohnFen 3y ago
        Yep. I learned decades ago to ignore those types of incentives because they don't actually provide much (if any) benefit to me. All they do is make everything more of a hassle.
  - jacobr1 3y ago
    And the 1040EZ is even easier to fill out and probably works for the majority of taxpayers. But the bigger issue isn't filling out the form ... it is on the data side. If the IRS were to send you an invoice, independent of how complex the calculations are, the work to validate their data is much different than starting from scratch.
    - ghaff 3y ago
      1040EZ doesn't exist any longer. I tend to agree with the broader point--even if it would probably nudge some taxpayers to overlook deductions they're entitled to.
  - pclmulqdq 3y ago
    I think a lot of people who complain about the complexity of the US tax code and the "need" for TurboTax would benefit from directly filling out the 1040 by hand one year - most of them would have a pretty easy time doing it. For most people, all you need is a 4-function calculator, your W-2s/1099s, and a pencil, and it will take at most an hour or so. Where the IRS's UX is really bad for the average taxpayer is all the other forms and instructions that Americans feel the need to read and think about despite none of them applying to your situation. However, I think this is mostly psychological, and Americans are wasting their time and money trying to get ahead by finding a "loophole" that applies to them.
    - thfuran 3y ago
      >and it will take at most an hour or so. And that's absolutely insane. That's tens of millions of man hours per year spent essentially on rote data entry of data that the IRS already has so that you can submit it to the IRS for them to check against their copy.
      - ghaff 3y ago
        I would like to think that even if the IRS were to send me some numbers, I'd still spend an hour or so checking them against my own information.
        JohnFen 3y ago
        I know that I wouldn't, because I don't want to. I'd just pay the amount the IRS says I should pay and call it good. I'd probably be paying more tax than absolutely necessary, but I honestly wouldn't mind that at all -- especially because I'd be saving money over doing the taxes myself (in the sense of time == money) or paying someone else to do them for me.
        pclmulqdq 3y ago
        I mean, if the IRS was wrong about your income and you got audited, you would probably still be on the hook for penalties and back taxes. You're still going to want to spend some time checking that tax form pretty thoroughly.
  - bigstrat2003 3y ago
    Hard agree with this. Filling out your taxes by hand is actually very easy if all you have is the basics (which is most people). When I was doing my taxes for the first couple of years as an adult, I did it by hand and was pleasantly surprised how easy it was. The instructions are very clear and to the point.
    - hedora 3y ago
      Did you go to college? I had a job on campus and a stipend, and that immediately tossed me into the deep end of “the tax code is actually ambiguous and the difference is three months rent”.
      - bigstrat2003 3y ago
        I did, although I wasn't in college at the time I started doing my taxes. I was a dependent on my parents' taxes while I was in college.
  - blincoln 3y ago
    Maybe stating the obvious, but virtually everyone with one or more home loans should be itemizing their deductions to include that and their state sales or income tax. The standard deduction is very generous for non-homeowners (IMO), but it's easy to get a higher deduction just based on home loans and state tax, without even getting into all of the sketchy loopholes that some tax preparers will try to use.
    - lotsoweiners 3y ago
      That isn’t true anymore as of 2018 when the Trump administration made changes to the tax law. As a homeowner with a mortgage I used to itemize every year but now the standard deduction benefits me more. https://smartasset.com/taxes/heres-how-the-trump-tax-plan-could-affect-you# https://smartasset.com/taxes/heres-how-the-trump-tax-plan-co...
  - hedora 3y ago
    The question with the trump era changes isn’t what percentage itemize in a given year. The question to ask is what percentage should always itemize. and how long it takes for them to figure out if they should or not each year. It is true that some people just won’t bother, but that’s just a hidden tax hike on the middle class. It doesn’t make sense for that group to bother to take the time to learn turbotax or hire an accountant in order to potentially save $1000. Also, the Trump changes intentionally cause under-witholding, so now people have to fill out the “did I get fined for underpayment?” form, and the “do I need to file quarterly taxes?” form. The change that intentionally broke the withholding formula was explicitly designed to make tax preparation more painful.
runnr_az 3y ago
In the 90s, I filed by phone once.

US taxes were pretty cumbersome before Intuit et al. Intuit wouldn't appear if not that. So your quote may partially explain resistance to change, but not causes.

Retric 3y ago

Taxes weren’t particularly difficult if like most people you were overpaying before this software showed up. The complexity was originally a way to effectively have different rules for people with accountants than regular citizens thus allowing politicians to shift the tax burden without making the carveouts obvious. Now days we just blatantly tax people living off investments less, etc. Thus defeating the original purpose of that complexity.

ghaff 3y ago
And the reality today is that, if like a lot of people, you just have a W2 and maybe a 1099 or two, while the 1040 form is probably a bit intimidating, it's pretty straightforward if you're just taking the standard deduction as most people do since Trump era tax changes. Basically, if you're eligible for any of these direct-file arrangements, your taxes are pretty easy to file anyway. I'm all for simplifying tax filing but if you're just filing basic taxes and are willing to forgo any deductions you may be eligible for such as energy efficiency, it's pretty straightforward.
- amerkhalid 3y ago
  I think they should get rid of all deductions at the individual levels. They just cause confusion and hide true cost of things. For example, I went to buy Jeep. 4xe version was $8000 more. But its battery lasts only 2-3 miles and it would have taken forever to breakeven. But dealership kept insisting that I will get $6000 in tax rebate/deductions so the actual cost is only $2000 more. They had marked up the car by how much government was going to give rebate on and there was no savings for a taxpayer. I tried to have them issue give me discount now and claim my car on their taxes but, of course, that was not going to work. I ended up buying a cheaper model. EDIT: Just checked the range, it is actually 21 miles on battery, which would have been enough for my usage. At that time, salesperson informed me that it was 3 miles or so. At 21 miles per charge, I may have bought 4xe. Math still doesn't workout, since I work from home I probably fill the gas tank once every 2-3 months. About $200-300 per year for gas. So it would have taken 7-10 years to breakeven after rebates.
  - thfuran 3y ago
    >They just cause confusion and hide true cost of things. Hiding the true cost is the point. Or rather, altering the true cost to incentivize something or other.
  - hedora 3y ago
    There are two limits on that deduction that are relevant. They can’t be applied to foreign built cars, and there is an income cap. The Koreans (Kia, Hyundai) found a loophole: The restrictions do not apply to commercial fleets, including vehicles leased to consumers. So, they offer lease incentives that are structured to give you $7500 off MSRP if you buy the vehicle out of a lease after the first month. No IRS paperwork required, and no chances of finding some other gotcha when you file your taxes. If the law hasn’t changed by the time I buy a new EV, I’m going to insist on this, regardless of whether it is domestic made.
  - Retric 3y ago
    The dealer wasn’t really lying just unclear. The car is not designed to stay fully electric until the battery hits zero because the ICE engine is only 150hp. Instead it’s optimized to be a hybrid that’s reserving battery power for acceleration, which lets the engine stay in more efficient and lower RPM ranges for much longer. You can press a button every time you get in to drain the battery but that’s really not the intended use. Anyway, the subsidy is really designed to setup the used car pipeline. In 20 years someone with significantly less money is probably going to be driving your car and they aren’t going to be thrilled with having ~14mph.
  - jghn 3y ago
    > They had marked up the car by how much government was going to give rebate on and there was no savings for a taxpayer This is the thing that always gets me. After having seen too many examples of this I soured on these incentivized deductions. The benefit always seems to go to the middle man.
    - JohnFen 3y ago
      Yep. I learned decades ago to ignore those types of incentives because they don't actually provide much (if any) benefit to me. All they do is make everything more of a hassle.
- jacobr1 3y ago
  And the 1040EZ is even easier to fill out and probably works for the majority of taxpayers. But the bigger issue isn't filling out the form ... it is on the data side. If the IRS were to send you an invoice, independent of how complex the calculations are, the work to validate their data is much different than starting from scratch.
  - ghaff 3y ago
    1040EZ doesn't exist any longer. I tend to agree with the broader point--even if it would probably nudge some taxpayers to overlook deductions they're entitled to.
- pclmulqdq 3y ago
  I think a lot of people who complain about the complexity of the US tax code and the "need" for TurboTax would benefit from directly filling out the 1040 by hand one year - most of them would have a pretty easy time doing it. For most people, all you need is a 4-function calculator, your W-2s/1099s, and a pencil, and it will take at most an hour or so. Where the IRS's UX is really bad for the average taxpayer is all the other forms and instructions that Americans feel the need to read and think about despite none of them applying to your situation. However, I think this is mostly psychological, and Americans are wasting their time and money trying to get ahead by finding a "loophole" that applies to them.
  - thfuran 3y ago
    >and it will take at most an hour or so. And that's absolutely insane. That's tens of millions of man hours per year spent essentially on rote data entry of data that the IRS already has so that you can submit it to the IRS for them to check against their copy.
    - ghaff 3y ago
      I would like to think that even if the IRS were to send me some numbers, I'd still spend an hour or so checking them against my own information.
      - JohnFen 3y ago
        I know that I wouldn't, because I don't want to. I'd just pay the amount the IRS says I should pay and call it good. I'd probably be paying more tax than absolutely necessary, but I honestly wouldn't mind that at all -- especially because I'd be saving money over doing the taxes myself (in the sense of time == money) or paying someone else to do them for me.
        pclmulqdq 3y ago
        I mean, if the IRS was wrong about your income and you got audited, you would probably still be on the hook for penalties and back taxes. You're still going to want to spend some time checking that tax form pretty thoroughly.
- bigstrat2003 3y ago
  Hard agree with this. Filling out your taxes by hand is actually very easy if all you have is the basics (which is most people). When I was doing my taxes for the first couple of years as an adult, I did it by hand and was pleasantly surprised how easy it was. The instructions are very clear and to the point.
  - hedora 3y ago
    Did you go to college? I had a job on campus and a stipend, and that immediately tossed me into the deep end of “the tax code is actually ambiguous and the difference is three months rent”.
    - bigstrat2003 3y ago
      I did, although I wasn't in college at the time I started doing my taxes. I was a dependent on my parents' taxes while I was in college.
- blincoln 3y ago
  Maybe stating the obvious, but virtually everyone with one or more home loans should be itemizing their deductions to include that and their state sales or income tax. The standard deduction is very generous for non-homeowners (IMO), but it's easy to get a higher deduction just based on home loans and state tax, without even getting into all of the sketchy loopholes that some tax preparers will try to use.
  - lotsoweiners 3y ago
    That isn’t true anymore as of 2018 when the Trump administration made changes to the tax law. As a homeowner with a mortgage I used to itemize every year but now the standard deduction benefits me more. https://smartasset.com/taxes/heres-how-the-trump-tax-plan-could-affect-you# https://smartasset.com/taxes/heres-how-the-trump-tax-plan-co...
- hedora 3y ago
  The question with the trump era changes isn’t what percentage itemize in a given year. The question to ask is what percentage should always itemize. and how long it takes for them to figure out if they should or not each year. It is true that some people just won’t bother, but that’s just a hidden tax hike on the middle class. It doesn’t make sense for that group to bother to take the time to learn turbotax or hire an accountant in order to potentially save $1000. Also, the Trump changes intentionally cause under-witholding, so now people have to fill out the “did I get fined for underpayment?” form, and the “do I need to file quarterly taxes?” form. The change that intentionally broke the withholding formula was explicitly designed to make tax preparation more painful.

runnr_az 3y ago

In the 90s, I filed by phone once.