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> Unless you're dealing with foreign income, are a business, or do a lot of contract work for cash, I don't see much reason why the IRS can't just handle all th
by usaar333 3y ago
> Unless you're dealing with foreign income, are a business, or do a lot of contract work for cash, I don't see much reason why the IRS can't just handle all the taxes automatically - apart from the fact that some company wants to charge me $150 a year to file my taxes and making sure that my tax situation (which would fit on a beer coaster otherwise) is as complicated as possible.
I imagine there are heavy software development costs, on par with what it might take to build Turbotax itself.
For instance, someone is going to have to figure out wash sales. Right now your broker does it, but you can wash sale across accounts, which requires you (or more reasonably tax software) to both detect this and track the adjusted basis in perpetuity. More complex events, like straddles, further exist, and even consumer-grade tax software won't handle it correctly.
Even implementing the tax code correctly for regular income is difficult. Examples of calculating Net investment income tax correctly due to ambiguous tax code changes (https://www.bogleheads.org/forum/viewtopic.php?f=2&t=271074&p=4440653#p4440653 https://www.bogleheads.org/forum/viewtopic.php?f=2&t=271074&...)
- unyttigfjelltol 3y agoNote the proviso, taxes should be automatic "for a lot of people." Will taxes be automatic for Warren Buffet? No. For GE? No. For Suzie Q. Public? Yes.
- CrendKing 3y agoI have no idea what "wash sale" is. I only heard that term when I was reading the help page in TurboTax, which I'm effectively forced to use. Seriously, I doubt there is more than 100k people in US that have this "wash sale" any year. I'm so tired of every time someone suggests automatic tax filling, there is always one guy bring up some tax term that 99.99% people never heard of. Sure, if auto tax filling doesn't solve your wash sale calculation, feel free to go back to TurboTax. Let the other 99% people who have one job and no other complicated tax situation skip this yearly nonsense.
- geraldwhen 3y agoLiterally anyone that owns stock could generate a wash sale.
- fbdab103 3y agoOnly 15% of Americans directly own any stock[0]. Vast majority of people who do is done through a 401k or other retirement vehicle. [0] https://usafacts.org/articles/what-percentage-of-americans-own-stock/ https://usafacts.org/articles/what-percentage-of-americans-o...
- ac29 3y agoWash sale rules apply to mutual funds and ETFs also, not just directly holding stocks.
- sseagull 3y agoBeware the paradox of averages. I bet a lot more than 99% of people have some wrinkle with their return. One person has a wash sale, another has some real estate stuff, another became disabled, another has child care stuff, another has education credits, etc etc etc. Actually now I am curious how many people file the “simplest” return (wage only, standard deduction, and absolutely no other adjustments).
- ghaff 3y agoIt’s probably less than 99% but it could be the majority in a given year.
- mindslight 3y ago> TurboTax, which I'm effectively forced to use FWIW TurboTax is easily piratable. There are even instructions out there to crack it yourself with a .NET assembly editor. I do my taxes in a VM without Internet access and mail in the filings, so there's no way for any information to be backhauled to Intuit or anyone else.
- avrionov 3y agoIRS already audits at least 10% of the returns. They should have the entire tax system implemented as a software. It is madness that this part was hidden from the wide audience. As many software projects, the internal system may not be appropriate for external use, but still they should have components very long time ago.
- freeone3000 3y ago>IRS already audits at least 10% of the returns. They should have the entire tax system implemented as a software The audits are accomplished by a human re-doing the return with the submitted information. (As no surprise, the low-complexity returns are often chosen)