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Direct File officially opens in 12 pilot states
- pangolinja 3y ago[dead]
- berdon 3y agoI’m excited for this - even if right now all I get is “There was an error processing your request.”
- toomuchtodo 3y agoThe journey of a thousand miles starts with a single step. Hopefully this eventually relegates the private tax prep industry to history.
- a-r-t 3y agoMy state is not in the pilot, so I can't try it myself. Have anyone here used it yet? How was the experience?
- RajT88 3y ago> The IRS designed the pilot to follow the best practices for launching a new technology platform by starting small, making sure it works and then building from there. But they're including the 4 most populous states, which comprise 37% of the population by themselves. lol
- nozzlegear 3y agoDevil's advocate, but it's not like all 100% of the population in each of these states is going to start using the free file system. It does sound a bit silly though, I agree!
- yieldcrv 3y agoFrom what I can tell, people new to taxes find the cheapest way presented to them at the time, and then stick with that mainly out of fear so the old couple with papers strewn out over the table just keep doing that the turbotax e-filers keep doing that the “I know a guy” people keep doing that and people that stop being dependents last year are going to use this not much objectivity in this
- nozzlegear 3y agoThat sounds about right to me. I don’t have any plans to move on from FreeTaxUSA unless this IRS thing blows me away. Not that it’s available in my state yet anyway. As a counterpoint though, I did move from Turbotax to FreeTaxUSA in my 20s after I started a business, because Turbotax wanted something like $400 just to file my Schedule C; FreeTaxUSA didn't charge anything for that form.
- KTibow 3y agoIIRC these states don't have certain types of taxes which would complicate things
- dtparr 3y agoI believe it's more the states with no state income tax at all plus those that have a state-provided version of "direct file" already available.
- callalex 3y agoThere are many different definitions of "small". In this case, number of users probably doesn't make much difference to them, it's more about the number of/complexity of tax laws.
- pimlottc 3y agoThis isn't the first rollout phase, they have been earlier closed pilots [0] 0: https://apnews.com/article/irs-income-taxes-direct-file-program-free-4b0917e281b63e06527343598dde650c https://apnews.com/article/irs-income-taxes-direct-file-prog...
- wyldfire 3y agoThis is awesome! And well overdue. I'm okay with this working only for the folks whose returns would've been simple / 1040EZ. A huge step in the right direction.
- ghaff 3y agoThere hasn't been a 1040EZ for a while. That said, I don't really disagree. For people who don't itemize deductions and only have a W-2 and maybe a 1099, filing taxes should be mostly a pre-filled-out no brainer.
- fbdab103 3y agoHow firm of footing is this program? If there is a change of leadership next year, will this be strangled in the crib?
- throwup238 3y agoIf there’s a change of leadership next year, Direct File is the least of our problems.
- breckognize 3y agoThis is exciting. I hope Intuit gets what it deserves. Their obstruction of simplifying the tax code has gone on long enough.
- vineyardmike 3y agoSo I know intuit is an easy and guilty party in this whole situation, but let’s not pretend it’s all their fault. Plenty of politicians benefit from this mess. This isn’t meant to pick sides in politics, but if you’re a politician and you’re running a “lower taxes and less government bureaucracy” re-election campaign, it’s in your best interest to make paying your taxes as noticeable and painful as possible. It’s in politicians best interests to make the government as unfriendly and time consuming as possible. Filing a tax return manually should only be necessary for a small percentage of people with complex situations. Most people’s entire income is a single W2, and their payroll provider should be able to deduct the exact amount down to the penny. No-op for the individual. Everyone else can keep their existing process applying for deductions and breaking out their income streams. Anything else is theater to make you hate taxes.
- qpingo 3y agoCan you cite the responsible politicians?
- jdietrich 3y agoFollow the money. https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Opposition_to_free_automatic_tax_return_filing_and_other_efforts_to_make_tax_filing_easier https://en.wikipedia.org/wiki/Americans_for_Tax_Reform#Oppos...
- sokoloff 3y ago> Most people’s entire income is a single W2, and their payroll provider should be able to deduct the exact amount down to the penny. People also like to get steady paychecks. In any progressive tax system, anyone who leaves a job mid-year would either mean everyone would have to have paychecks that varied or job changers would have a discrepancy at the end. Having paychecks varying due to taxes would no doubt be spun by some as “theater to make you hate you taxes”. Homeowners with mortgages probably don’t want to share those details with their employer, out of some combination of “it’s none of their business” and “could they use that information against me somehow?” I get that filing taxes is annoying, but trying to set things up so my payroll department eliminates that seems the wrong path versus making the front door to the filing system easier to use.
- habosa 3y agoDealing with the IRS is never fun because it normally means you owe money but I have to say they’re quite competent (once you get a hold of them) and their digital services seem to be improving constantly. Nice to see a branch of government actively trying to be user friendly (in the ways they can control). The IRS can’t do much about our insanely complex tax laws but they can make it easier to file.
- pkaye 3y agoThe IRS helpline was much better back in 2009 when I needed some advice on a special case that the average tax preparer didn't understand. They forwarded me to a IRS specialist that knew how to handle it and went step my step in filling out the form and saving me $5k compared to what two tax preparers did. I think the Republicans back then gutted the IRS so they wouldn't audit the wealthy.
- crooked-v 3y agoIt's literally explicit Republican policy to make filing taxes difficult and unpleasant, so that people hate the government more.
- soco 3y agoI think if this is the case one should hate the Republicans (policies) more, as being the ones explicitly breaking stuff, but yeah it's easier to generalize.
- orzig 3y agoCan we aspire to some baseline level of truth seeking where a phrase like “literally explicit” requires even the slightest bit of evidence? In this case, it wouldn’t have even been hard to find that evidence, though you are assertion is oversimplified: “ for the vast majority of the population, most of the pain of tax compliance could be eliminated by a few keystrokes at IRS headquarters. So why don’t we do it? Two reasons. One is lobbying by the tax preparation industry to discourage states and the feds from developing easier tax-paying systems, as California recently did. The second is lobbying by anti-tax conservatives. When the Golden State implemented its ReadyReturn system, it did so over the objections of Grover Norquist and his anti-tax pressure group Americans for Tax Reform, which fears that if taxes become less annoying voters might be less unhappy about paying them.” https://slate.com/business/2012/04/grover-norquist-and-h-r-block-the-unholy-alliance-of-tax-prep-firms-and-conservative-activists-to-make-your-taxes-even-more-complicated.html https://slate.com/business/2012/04/grover-norquist-and-h-r-b... All of this took me 120 seconds with Perplexity AI. As we strive towards being a better nation, or at least a better community, I beg that future micro-polemicists invest that much time before hitting “post”
- gavinsyancey 3y agoUnfortunately you can't use it if you have a 1099-DIV, i.e. pretty much anyone who owns any stocks not in a tax-advantaged account :(
- saagarjha 3y agoLoad up on GOOG ;)
- zeroonetwothree 3y agoAlso if you have more than $1500 in interest, which at todays’s rates is quite easy to hit.
- keepamovin 3y agoCool. I can't wait until they open up for companies. As much as I enjoy printing, writing and posting, it's a pain and kind of byzantine to mail off 1120 returns. Maybe that part of the system is too complex tho...:(
- doawoo 3y agoYou can’t report a good number of forms with this thing that I would have liked to see for those who work gig jobs and then get stuck having to pay Intuit money: 1099-K, 1099-NEC, 1099-MISC, Tips etc — That being said! This is just a pilot and I’m super excited to see it, anything that distances us from things like TurboTax is progress.
- Terr_ 3y agoIt seems a little ambiguous whether 1095-A (health insurance through a state marketplace) is a hard blocker and or just non-optimal.
- zeroonetwothree 3y agoYou don’t have to file that form anymore (for years now…)
- Terr_ 3y agoIn particular, I mean this page [0] where the IRS flat-out says "you can't" use direct-file (for no particular reason) before giving a much weaker statement of "is not a good option." > You can't use Direct File if you have: [...] Health insurance you bought directly through a marketplace (like HealthCare.gov) [...] Individuals enrolled in a health insurance plan through a marketplace will receive Form 1095-A. > If you got your health insurance through a marketplace, Direct File is not a good option for you. [0] https://directfile.irs.gov/insurance https://directfile.irs.gov/insurance
- junar 3y agoDon't confuse 1095-A (ACA marketplace health plans) with 1095-B or 1095-C (employer and other health coverage). Also don't confuse the premium tax credit with the individual mandate. Because of the premium tax credit, most taxpayers that receive Form 1095-A are required to file Form 8962. https://www.irs.gov/forms-pubs/about-form-8962 https://www.irs.gov/forms-pubs/about-form-8962 IRS Direct File doesn't let you file if you have marketplace insurance, presumably because it's not supporting this form. https://directfile.irs.gov/insurance https://directfile.irs.gov/insurance
- throwaway81523 3y agoTldr (pasted): Arizona California Florida Massachusetts Nevada New Hampshire New York South Dakota Tennessee Texas Washington State Wyoming
- matt3210 3y agoCan’t split states when you moved half way in the year
- silisili 3y agoInteresting that 8 of the 9 states that have no income tax(no Alaska) are part of the pilot.
- Terr_ 3y agoSo apparently using this thing requires people to sign up and interview through ID.me, a private company with some controversy around facial recognition stuff and a non-governmental domain in Montenegro. There's a certain flavor of very banal insanity here, as the US government (A) tries to outsource a core competency of identifying taxpayers in its jurisdiction and (B) promotes a domain name that should instead be a bad-answer in anti-phishing security training.
- XorNot 3y agoThis isn't a US Government problem though, it's an "average voter" problem. The US Government implementing an actual form of secure ID for government use would be treated a gigantic conspiracy to do <insert already possible thing here>. But they still actually need to be able to securely identify residents, so here we are (well, and there is the victims of identity fraud due to the use of social security numbers as unique resident identifiers, a role they were never intended for).
- reaperman 3y agoCounterpoint: https://login.gov/ https://login.gov/
- easton 3y agoWhich actually has an identity verification component: https://login.gov/partners/our-services/#verified-identity-and-authentication https://login.gov/partners/our-services/#verified-identity-a...
- c0pium 3y agoThat’s a federated IDP which can be used to access your identity instead of using your social security number. It doesn’t replace the fact that your social security number is still your username and password in the canonical identity system, which is the problem GP is talking about. Edit: or if you prefer, your SSN is both your user record locator and user secret.
- 4ndrewl 3y agoWhat's the story behind this? In the UK you've been able to file your tax returns online for well over a decade.
- confident_inept 3y agoDirectly filing your taxes in the US was currently mail-in only until this pilot originated. Intuit and the likes have lobbied with their millions to make sure the average citizen can only e-file with a few select proprietary options and it has been that way for as long as most anyone remembers. This opens the gates for what might be (I didn't look much into the site) an easy way to e-file directly with the IRS.
- eel 3y agoThe IRS does have an option for tax payers to electronically fill and file those mail-in forms directly. [0] No printing or mailing required, and there's no income limit. It's called Free File Fillable Forms, and I've used it for the past 4 tax years. [0] https://www.irs.gov/e-file-providers/free-file-fillable-forms https://www.irs.gov/e-file-providers/free-file-fillable-form...
- xwolfi 3y agoIn Hong Kong and France, the two places I pay taxes in, it's been digital, free and trivial for as long as I've been a taxpayer, a decade+, as well. It's just weird when you realize the U.S. is so bloated and backward compared to places they criticize constantly like France and HK :D I suppose they don't have ways to pay taxes monthly there either, so it's all a giant lump sum yearly or a tax loan ? I always wondered why giant tax jurisdictions never try to just do one single non-micro-optimized tax rate ladder across everyone and zero other taxes / deduction / special regimen etc. I know HK is much smaller, but having only one single tax to collect at a very simple percentage rate, with very few deduction, makes it so cheap and simpler that the government can reduce taxes because it collects them so efficiently. France collects directly from salary, so now there's no tax return for the vast majority of tax payers, it's a bit riskier since you can't escape it, but... can't do much simpler.
- kotaKat 3y agoI filed with DirectFile in the pilot and I think might have found an issue during the pilot where NY taxes don’t get fully sent over to the FileYourStateTaxes tool for NY. I DID have a few day wait while the state tax partner sorted that out (half think they ended up having to roll out a new feature because of me, whoops) but other than that the IRS and state side went smoothly. I had actually started my return in TaxAct and balked at the price for my simple return but the IRS and state tools all agreed with TaxAct’s own numbers so I’m assuming everything went by the book. FWIW I’m a simple tax case, one W2, some student loan interest, fairly boring.
- ughitsaaron 3y agoWhy of all things should simplifying tax filing be means tested?
- deleted 3y ago[deleted]
- Havoc 3y agoThey could literally just copy the uk platform. It’s clear, easy to use, accessible, centralised, non commercial, modern and the UK gov website design teams does a lot of their UI work in the open anyway. https://design-system.service.gov.uk/ https://design-system.service.gov.uk/
- charlesabarnes 3y agoThe US design system is not too far from the UK's implementation and documentation https://designsystem.digital.gov/ https://designsystem.digital.gov/
- rbanffy 3y agoIt'd be interesting to see how much a multi-country effort to make a tool that collects tax information and applies a set of rules to the data to advise the user would be able to share. My impression is that it'd be a lot (the rules, of course, would be specific to the type of entity and local legislation). As a Brazilian who has been using free government-provided tools to submit my taxes for decades (up to when I moved to Ireland, where I don't even need to do that), this is very interesting to me.
- whalesalad 3y agoyou are linking to a design system, not a taxes tool?
- Havoc 3y agoThe very country specific tax logic part would by necessity be country specific built. My point was more that there wasn't really a need to reinvent this wheel in terms of everything else. Not only is there a battle tested production system serving millions already, big chunks of it are in a MIT github repo. That said I understand why the IRS doesn't just want to copy another country's. Not invented here and all that. But from the various countries systems I've used...the UK one is fantastic. Not just tax...same pretty clean UI and design across all the big gov sites.
- sotix 3y agoIs there source code available for the system?
- esbranson 3y agoYou have to give up your privacy to even login to IRS.gov because to use ID.me one must: * Consent to the collection, use, and sharing of their personal information to third parties (i.e. data brokers). * Agree to binding arbitration and a waiver of class action rights. * Agree to limits on liability for any indirect, punitive, special, exemplary, incidental, or consequential damages. * Consent to arbitrary termination of the account at any time for any reason. Login.gov (https://login.gov/ https://login.gov/) is the obvious choice for a login service. Enough excuses.
- dinkleberg 3y agoI know this isn't unique (as USPS is heavily funded via marketing spam), but it feels very dystopian that the identity service that government programs are using is also a discount site.
- p0w3n3d 3y ago"join the dark side of the force, and get a free cookie"
- lupire 3y agoUSPS is extra weird, because the recipient pays (via ad exposure) for the benefit of the sender (low postage). Of course, some mail I receive is for my benefit, but receiver can pay the sender for that (or they can put ads in the package). USPS could offer to charge me for ad-free delivery, but they don't. USPS pressures recipients to fetch and sift and dispose junk mail because there might be a critically important package. That's abusive. It's extortionate.
- cptskippy 3y ago> USPS is extra weird, because the recipient pays (via ad exposure) for the benefit of the sender (low postage). No this is 100% wrong. We do not subsidize bulk mail, the rates we pay are a penalty for the difficulty of processing our mail. Bulk senders only receive preferred rates if they conform to very specific specifications about presorting, proper labeling, where the mail is dropped off, how far it's traveling, quantity, size, and weight. All of these factors and more impact the cost of the USPS to process a single piece of mail. The business doing some of that preprocessing saves the USPS money and they pass the savings on to the business. USPS offers flat rate, media mail, and priority options that have dimensional and weight restrictions because those allow them to more cheaply and efficiently process those packages.
- Skunkleton 3y agoI hate this solution. Instead of simplifying tax law, the government is just building another layer of crap on top. If this is all they are going to do, why bother at all? Why not instead subsidize tax preparation software for “simple” cases and be done.
- aceazzameen 3y agoBut then tax prep software companies will abuse those subsidies to increase their growth targets even further. The middle man needs to go.
- guerrilla 3y agoAny idea if this will work for expats?