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I am excited that there is possibly a viable alternative to filing that can emerge over time (I am generally a TurboTax user, trying H&R Block this year) - but
by xyzelement 3y ago
I am excited that there is possibly a viable alternative to filing that can emerge over time (I am generally a TurboTax user, trying H&R Block this year) - but I also wanted to address the "why are taxes so complicated in the US" comment that unimaginatively pop up in all such threads.
At its core, most people in the US can file taxes very simply and for free. A typical guy or gal who works a normal job and doesn't own complex investments, gives to charity reasonably but not extravagantly, etc. can file 1040EZ on-line or on paper, and the equivalent state version, for free in a few minutes. I've done this in the first few years of my career.
Layered on that is a bit of "complexity" that occurs when you engage in activity that the government seeks to reward or discourage. EG if you start a business, or partake in equity, make more complicated types of investments, hire people, donate large (relative to your income) - then your tax work gets proportionally more complex.
According to the IRS, almost 90% of filers take the standard deduction - so you can take that as a rough proxy that only 10% of filers deal with more complex situations.
The fact that state taxes further complicate the situation is a small price to pay for the diversity of lifestyle that the US offers (kind of like the complexity of Unix is worth it for the freedom over the simple interface of IOS for many people.) I live in NY which is a very high tax state and therefore has complexities that are worth navigating if you're in that more complicated 10%. We could have chosen to live in a lower tax state and face a very different tax code (but also very different lifestyle in other ways) but I am happy to take on the complexity for the freedom of the choice. And as I said, for most people the state tax is a very straight forward calc/file.
There are some HIDEOUS situations, I got a taste of that when I worked in Connecticut but lived in NYC (which has its own tax on top of NY state) but that's so rare and again, the edge cases are worth the main case.