It's a racket. Government already knows how much you owe them. So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"?
That being said, it seems "freer" to me to tell the IRS what my financial situation is rather than let it dictate to me what I owe, and then have to fight the government in order to take a deduction for donating to GoodWill or the Salvation Army. I'm splitting hairs trying to play devil's advocate here.
As a bonus, they could make it software and offer a way to file/check online--but I'd be happy if they at least did it via the mail with paper.
It's your money, you can do what you want with it, so sure, give it away to charity if you want — but WTF does that have to do with taxes? You pay taxes on your income, and then you can give away some of what's left; it's not the IRS that wants you to give it away, so why should their cut be affected by that?
I'm pretty sure the US is alone in this weirdness too, as in so many others.
Yea, possibly (I agree with you). It is as much a racket as lots of other things. Doesn't excuse it being a racket, but TurboTax is not an anomaly.
> Government already knows how much you owe them.
This is false. If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investments, you're giving the IRS more than you have to. If that doesn't bother you, that's fine too!
> So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"?
Cool, sounds great. However, you're over-simplifying things and ignoring the complicated parts. For a lot of people, a simple approach like the above would be totally adequate and I personally completely support a system like that.
I do take advantage and do not lift a finger to achieve it, because the tax man knows about this already.
> However, you're over-simplifying things and ignoring the complicated parts.
IMHO, you are overcomplicating things. If tax laws are as complex as you wish them to be, if the tax-man cannot know what you owe to it - then it's just a very good environment for the wealthy not to pay anything, while screwing over other 99% with over complicating things.
I do not pay taxes in the US and unless you have a company, I guess 99% of individuals do not need to do any taxes at all, i.e. just confirm what the tax agency already knows about them.
I think you're mistaken. The tax man does not already know what charitable donations I've made, or depreciation I would like to claim, or ....
> IMHO, you are overcomplicating things. If tax laws are as complex as you wish them to be, if the tax-man cannot know what you owe to it - then it's just a very good environment for the wealthy not to pay anything, while screwing over other 99% with over complicating things.
As an aside, I do not have any wishes regarding the tax system one way or the other. I'm only subject to the tax laws, I don't really care what they are.
The Tax Man® knows what you owe based on income that has been reported to it by places like your job, but only if your work does withholding and reports it to the IRS. It could report it without withholding (I think?), or you could be getting a 1099. If all the income from your 1099s is reported accurately and timely, this would be similar to a place that gives you a W2. This doesn't always happen, or there could be disputes.
> I do not pay taxes in the US and unless you have a company, I guess 99% of individuals do not need to do any taxes at all, i.e. just confirm what the tax agency already knows about them.
I doubt it's anywhere close to 99% :)
Optional things that the government might not know about: kids, charities, investments, depreciation, rebate programs (like solar, cash for clunkers, etc), inheritance, mileage deductions, moving across state lines, getting divorced, getting married, becoming a widow, losing a child, etc. There's a ton of stuff that the government doesn't know about _unless you tell it_.
If I make a bunch of money mowing lawns, my neighbors probably aren't sending me 1099s, but I really probably should report that income and pay taxes on it. The government wouldn't know about it unless I reported it (which is why a lot of folks don't bother reporting income like that, especially if it's a small enough amount).
I'm not a tax lawyer, nor a tax expert.
Think about taxes as a negotiation process.
Attack the problem at the source.
There was a lot of noise made last year when a law almost made that permanent.
I'm not sure if the API you're talking about would apply, but I'm pretty sure it would and passing a law would be difficult.
https://www.propublica.org/article/congress-is-about-to-ban-...
I don’t get why people think this is true.
Take a really simple example of donating to a charity.
How would the government know you donated without you telling them?
How is the government going to know exactly where you put all your money?
If you put your money in a bank, the bank reports it to the IRS. That's how it works everywhere.