Intuit will no longer be a part of IRS Free File program
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They certainly have enough information from employers, banks, estimated payments from contractors, etc. Otherwise, how would they decide who to audit? How would they know to mail you an adjusted return for a past year?
It feels completely ridiculous that we need to calculate these things ourselves, only to be bugged by the agency for entering the wrong numbers. Just tell us what you think the bill is, and let us make a counter-claim if we think you're wrong!
But this has been true for years, decades. I'm not holding my breath.
0 - Yes, I know it’s technically a donation. But if it walks like a bribe and it quacks like a bribe, I see no reason to arbitrarily let them off the hook.
Lobbying, duh. Definitely not a bribe.
It's pretty wild that legal lobbying + the realities of campaign finance effectively mean that our government has instituted a policy of mandatory bribery. I mean, democracy is always going to have warts, but this one is really special.
(quack)
Seriously, though, go on. I'm dying to hear how you've got a definition of "lobbying" that cleverly gerrymanders around all the corrupt dealmaking and only includes purely informational communication. I can't wait to hear why we should confuse this definition -- which seems precision-engineered to deflect blame away from certain shortfalls in our political apparatus -- with the common usage of the term, which frequently refers to real life events and therefore inevitably includes a great many situations where the thing going "quack" is, in fact, a duck.
Registered lobbyists work for interest groups to have their voices heard. It's not always innocent, but it is not the same problem as campaign financing. Money is not changing hands.
Its sticky because that's not the only purposes; GOP politicians who want to campaign against taxes to push serial tax cuts weighted to the rich as the solution to every problem also want to preserve the current filing system as a source of leverage because it makes the perceived burden of taxes higher, though some of them (e.g., flat taxers) are willing to trade it off in exchange for a permanent massive downward redistribution of tax burden.
I'm not talking about pushing “exemptions”, I’m talking about motivation for specifically not allowing the IRS to prepare and provide taxpayers with a baseline calculation based on information they have as a complete return for the common simple cases requiring supplemental filing for compelx cases.
> Notice the Democratic support state tax exemption
Both Democrats and Republicans support the State and Local Tax Deduction; the GOP supports a dollar cap so as to increase pressure for low-tax state policies (more than would exist without the deduction at all or with an ubcapped deduction), Democrats prefer it be untaxed which leaves the federal hand off state tax policy.
It's just unjustifiable that we have the current system in place. There is not one single, rational argument to be made that US citizens are better off having to file their taxes every year. A system in which people get a tax bill from the government with an explanation of how it's calculate, then they can file their own tax return if they disagree, is just clearly better in every single way.
I think Intuit is a company that makes a lot of really useful products, but I can't look at them as anything except just utterly unethical because of their lobbying on this topic.
The truth is the IRS bill would be wrong and the IRS would have countless challenges and no practical ability to review any in-house type of challenge and all cases would needlessly result in court.
I had a horror story that took 2-3 years to resolve went all the way to tax court for a fraudulent 1099 in the amount of $75k presumably so the company could take a deduction and the IRS was seeking about 30k in taxes/fees/interest. Tax court require an agreement on the facts and issues before trial which the IRS dragged its feet until about 1 week before the agreed order was due when the conceded I was right and owed $0 taxes.
To even get to that point there were about 1/2 dozen phone calls with the IRS which took hours and always resulted in the employee confirming the believe me and I won’t owe anything. There were about 3 formal written responses I provided but IRS kept giving me standard boilerplate letters that I hadn’t proved I wasn’t paid the 1099 income reported and escalating the matter until finally they adjusted my return and forced my hand into filing a petition for tax court. Once in tax court their is supposed to be a stay on the matter until resolved by the court, but the IRS put me in collections, so I filed a motion which the Judge granted in chamber without a hearing to remove me from collections, this was after multiple conversations with the IRS attorney who never did anything but laugh when I called it a IRS automated track of hell and otherwise did nothing to looking into what I felt should have been pretty obvious case of fraud by the company that falsely reported the 1099 income.
This took hundreds of hours and the only way possible I got through it is that I happen to be an attorney.
> The truth is the IRS bill would be wrong and the IRS would have countless challenges and no practical ability to review any in-house type of challenge and all cases would needlessly result in court.
That's not how it would work. The IRS wouldn't send you a bill: it'd sent you an offer in the form of a pre-filled tax return. You accept the offer or you submit your own tax return.
Its the insane burden and waste of time for the average person that is the problem.
Imagine how much more productive the entirety of the US would be if tax filing would be simple. The amount of time saved would be enormous, there are approx 140 million tax payers and if everyone would spend just an hour (in reality its probably multiple days) per year doing tax related work you get an idea how much time is wasted.
So you only need to bother with a "self-assessment" tax return if you earn over £1000 of casual income.
And then, if you have less than £1000 of expenses related to that income, you don't have to justify the deductions so you just enter the income as a number and you're done.
Charitable contributions are claimed by the charity at the basic taxpayer rate. So when you donate £1 they can claim 20p from the government.
You only need to itemise your charitable contributions (to claim back the difference between the 40p of tax you paid and 20p the charity got) if you are a higher rate taxpayer, which is something like £70k per year gross, so you're well into <5% of people here.
We'd probably see more monkeying around with the standard deduction. I know for me, and presumably a lot of people (especially those without major mortgage interest), the current standard deduction exceeds the benefits to be had by itemization-- and claiming the trivialities like charitable donations or medical expenses.
Some in congress are working for this:
Cynicism like you expressed may earn likes in some contexts, but it isn't accurate, and it isn't helpful.
So no, I don’t think anything good happens in America. Maybe it did at one point, but I’ve never seen it. What I see instead are trillion dollar bailouts for banks, airlines, and auto manufacturers. Student loans, though? Yeah, get fucked. Qualified immunity? Yeah, get murdered.
I’m aware of many systems where this disproportionate distribution of benefits to certain groups is much worse. But in theory, it would be utopia!
Which countries do you feel operate in a “better” or less corrupt way?
Note that I wouldn’t consider “in theory” responses valid answers to that question.
But that won’t happen.
You can fix it on the web, add stuff not known by IRS, simulate tax level, and then validate it on the web.
You can explain in text boxes if you have a doubt about something (which I did for the first time this year since I did contract some home exterior insulation work but it was done in more than one fiscal year and the subsidy rules for such work changed between the two years).
In the UK a very substantial portion of my tax return is trivial to fill out, and filing online doesn't require any kind of software - the uk hmrc website does all the calculations for you. I was absolutely flabberghasted when I had to complete a US tax return a few years back at how incredibly archaic and byzantine the process was. It could certainly be a lot simpler which would save time and money for both the citizens and the IRS themselves.
For me, cost/time savings of paying a few hundred in fees is cheaper than a CPA (or spending an entire weekend doing it myself).
I never protest what they send back - either some check or a bill. I just take care of it and don't ask any questions.
If the IRS doesnt think I am paying them enough money, they can feel free to send me a bigger bill or assess greater fines.
I may get audited but I just don't give a shit about this broken mess anymore. I don't have anything to hide, and I would happily pay whatever shortfall is calculated just to get them out of my life again.
I am fairly confident that as long as you are paying your taxes and not giving the IRS a hard time (i.e. WRT overseas tax haven shenanigans and insane corporate structures), they will not fuck with your life.
You're right in that the IRS will treat people operating in good faith just fine, but a decent preparer makes it so much easier. My guy just asks me for my stuff in January and does his thing.
I do not want to continue to contribute to the tax preparation ecosystem any more than absolutely necessary. Paying a CPA to file my taxes is no different than paying intuit for a new copy of turbotax every year. I don't see a distinction in principle. They probably use the same software internally.
If you don't see a distinction here, I suspect it's because you don't want to.
> I'm not holding my breath.
Yeah I assumed back in the 80s this was a no brainer.
Edit: I see below that many from Sweden, UK, Germany have chimed in and basically said only the US is this stupid when it comes to federal and state income taxes. Thanks for the info.
The IRS could make things easier to fill out but they can't just send you a bill.
The whole point of the push system is to make it easier for anyone who has a simple tax setup. That is, they work for an employer who is continuously reporting on pay checks to the IRS and state revenue departments.
Yes, but most people do very few of the possible transactions that don't create records, at least so as to incur income tax liability. Requiring supplemental filing only where actually necessary would vastly reduce the burden on most taxpayers, and sending a baseline bill with notice of the need and conditions for supplemental filing would be a viable alternative to the current system.
What do you think W-2s and 1099s are?
So this would still be an option.
And for most people the tax bill that arrives would be correct. The parts that wouldn’t be correct would be if there are deductions you’re eligible for, that the IRS may not have any documentation of.
Right now the IRS thinks I'm using a fake American address for some good forsaken reason despite me paying almost 100k in taxes the last few years under the same name/address. And for what?! Half a penny in taxable intrest?!
I am all for a flat tax. It would be fair and easy.
The people I know who weren’t cheating or in very complicated scenarios did not have this problem. It’s certainly possible but remember that our impressions are skewed by a large, well-funded media operation promoting the idea that the IRS is horrific for political and business reasons. Intuit alone makes billions from that idea.
A retired IRS auditor mentioned that around half of the cases they processed ended up finding deductions which benefited the taxpayer more than the discrepancies.
I have known people who could not be bothered to file their taxes. The IRS would bill them and they would pay. If somebody pays the IRS without question, it seems to set off a red flag and the IRS will immediately follow up with another bill. Also, if you do not file, you get zero deductions and they will base their bill on that.
So you’re saying that you give the government a donation every year just in case you get audited so you might get it back that year? This does not seem like a financial win.
Again, I’m not saying that the IRS are perfect — only that it’s not wise to base your opinion on anecdotes. This is both a political issue and one where a lot of people have an incentive to blame the government for catching them, while everyone else has little reason to say they haven’t had problems. It’s like learning about feminism at a bar favorited by middle-aged divorced guys.
If there are deductions to be made we can do the same as other modern countries, have the taxpayer fill in an amendment and recalculate the proper amount.
People for whom that's not enough can still go through the whole ritual.
But I'd also like to see improvements for the 10-13% of people who cannot be correctly billed by the IRS (I'm one of them). I say this because we're already so close to how it ought to be ... for several years now, I've used freefilefillableforms.com to file my taxes as a self-employed person with periodic capital gains and other stuff. It's not really a great model for how such a website could be designed, but it's not actually terrible and generally gets the job done.
However, it has been intentionally hobbled: there are several places where you must manually transfer numbers from one field to another, or from one form to another. There's clearly no technical reason for this, and the system will also not report any error if you do not do so (making it trivial to have major errors, despite all the data being input correctly).
I can only conclude that it has been hobbled by the same motivations that affect the tax reporting/return field in general.
I'd definitely like to see this done even better, but a good small step would be a bill for force this site to do 100% of what it clearly already can, rather than 95%.
https://www.propublica.org/article/the-ftc-is-investigating-...
Based on what I’m hearing from folks inside the gov, this administration will encourage and support the IRS in flexing to be more citizen friendly and focused instead of rolling over for Intuit and Co (which personally I find to be refreshing).
Stay tuned, progress ahead.
As the saying goes, “I like taxes, with them I buy civilization.”
This sounds like all those police departments who hire cops and then end up writing lots of speeding tickets to pay for the cops.
According to the CBO: https://www.cbo.gov/publication/56467 "CBO estimates that increasing the IRS’s funding for examinations and collections by $20 billion over 10 years would increase revenues by $61 billion and that increasing such funding by $40 billion over 10 years would increase revenues by $103 billion."
Additionally the poor are now being audited as much as the rich (but not the super rich). Maybe this could be seen as IRS incompetence but I think given proper funding and motivation they'd be happy to turn this around. The decline of the auditing of the wealthy went hand in hand with IRS de-funding.
"Americans who receive the earned income tax credit, one of the country’s largest anti-poverty programs, are audited at a higher rate than all but the richest taxpayers. " https://www.propublica.org/article/irs-now-audits-poor-ameri...
For the good of the economy, they should be looking at how much hiring an auditor and doing more audits helps the economic outlook of the whole USA.
Audits on honest people cost those people time they could use to generate economic value.
Audits on the dishonest might prevent dishonesty, but the economic value gained for the country isn't equal to that collected from the dishonest person - since you are reducing their spending on rolexes...
This should be good news for the regular tax payer and incentivize those making $400k+/yr to play by the rules or risk jail time. Stop stealing from the treasury and start helping your fellow citizen.
https://www.propublica.org/article/turbotax-just-tricked-you...
Intuit just decided that it could not make enough money with this scam, so they stopped using this particular one. It's probably a wise decision. Claiming that you're providing a free service, while making it pretty difficult for users to find it so they will use your paid services instead, is definitely wrong from a moral point of view, but it might also be shaky from a legal point of view. The bottom-line was probably just the profit.
In March or April, everyone gets sent their pre-filled tax form for the previous year. You can change it as needed, for example adding income from a side hustle, or making deductions -- though those are fewer and less complicated than the US from what I understand. Many common deductions (e.g. for mortgage interest) will be pre-filled too.
Most people will not need to change anything, and so can approve the pre-filled form through text message or digital signature (or phone robot for old people iirc). If you do need to make changes, it can be (but doesn't have to be) done online without too much trouble. Don't get me wrong, it's not always trivial, but it seems significantly more pleasant than what I hear about the US system. And, again, the vast majority of people just have to send a text message some time in March or April.
It's literally IDENTICAL in USA yet there's a hellscape come tax time. The IRS already has all th e info they need and know the amount. Lobbyists (intuit & H&R block) have made it worse for decades. Crazy isn't it?
But I don't know if the deduction helps with that. People buy what they can afford, so the "discount" is probably consumed by higher interest rates and inflated prices. It can also be argued that it's a form of regressive taxation: the rich are eligible for bigger mortgages, and therefore have more to gain from the policy.
Personally, I would like to see it removed. Any serious attempt to do that it's probably political suicide, though, since it would have a noticeable impact on many people's finances. And who knows how it would affect the housing market. Maybe if it was done gradually over many years.
With the current interest rates it's an ideal time to pass any tax changes anyway - they won't hit new mortgages nearly as hard as 10 years ago, and the housing prices can use some downward pressure anyway.
I moved here from the USA and it feels simpler for the average person. You don't declare how many withholdings you get (I always used 0 so I could get some money at the end of the year), you just tell your employer your tax class and everything else is handled, and any refund is based on if you paid too many taxes somehow (there are some situations where you might have overpaid taxes inadvertently, like if you have a change in income part way through the year, and if this is the case when you file the return they analyze your income data and give you a refund).
('Normal' income tax is taken through 'Pay As You Earn' by employer's payroll, you only ever receive net pay; capital gains, dividends, 'innovation', etc. have tax free thresholds that mean you don't have to worry about it until (if) it's big. And then you can just file it online (or paper) directly with HMRC (IRS equivalent), or pay a tax advisor if you want of course, but that's certainly exception not norm.)
Much easier in Romania, if you have only employment income nothing to do. For capital gains or other incomes basically a single form, only 10% flat taxes so you know what you owe.
All in all, revenue tax takes about 5 minutes a year for me to check that what they have is correct (since I am salaried, which is the easy path), and maybe 5 more minutes to adjust my monthly tax rate.
Be an adult.
But that's not my real issue with your comment. I agree adults have to tough things out sometimes. But toughing out a problem that doesn't need to exist is macho nonsense. You might as well insist that people get rid of their indoor plumbing, because we got got along fine without it for most of human history. You can go dig your own outhouse if you want, but don't suggest somebody else is inferior for not going out of the way to make their life harder unnecessarily.
I am not saying that you should tough something out for no reason. I have electricity coming to my house to make my life convenient, which I pay for. I have water coming to my house, which I pay for.
But I cut my own grass manually. Why? Because I felt the prices offered to me were not fair, and that the job was not complex or hard.
Either you pay a tax professional if you feel the work is too complex and the price is acceptable, or you do it yourself.
You can try to fight the government on this one, and you might win (even I hope you do), but at what cost? Certainly it is not cheaper than $39 a year.
I agree that the modal W2 worker does not need such a booklet. But they don't need to fill out tax forms at all. The correct solution is not to make them pay $39 for software they don't need. It's for the IRS to say "Here's what we think we owe you and why. If you don't like that, go and fill out the forms."
Wait, what? Are you actually arguing that electricity is a convenience?
You are getting scammed by the government, who have made it burdensome to report all of this income. A tax professional or a service like Intuit are trying to help here. If the government wanted to make this process easier for the small percentage of people like you, they would have done so, but they haven't, because they have weak volition and desire for creativity.
Furthermore, my taxes take me less than 1 hour per year. I prefer the current system where I tell them what I think I owe.
If they told me what I owed, and I disagreed, what recourse would I have? I guarantee it would take more than an hour.
Further, you make this point in a later comment:
> I'm tired of arguing with malicious people on the internet.
I don't see anything remotely malicious in this thread other than people not agreeing with your point, and this whole thread seems to be pretty healthy. With that in mind it's quite interesting to me that you're implying that this healthy discussion is malicious.
I'd have to drive several orders of magnitude more than I do to spend tens of thousands of dollars on gas each year.
I'm tired of arguing with malicious people on the internet.
No; under every actual proposal, people who have these complicated deductions and other specialized needs can still file exactly the way they do today so that they can get their taxes calculated properly.
And making sure that >50% of Americans—in particular, the >50% who have the simplest taxes, which correlates highly with lower income—don't have to "spend 1 hour and $39 per year" with private companies to accomplish their legally mandated tax filing is a very good thing, even if it were to actually increase the inconvenience for the wealthy and complicated.
Which, again, this wouldn't.
So please put aside the ad hominem attacks, which I believe are against the HN guidelines anyway.
...but the thousands of dollars my wife paid directly to the government two years ago for her green card application which still is not done is totally fine?
If there was an Intuit for green cards, I would be camping outside to be the first to give them my money.
You'd file your taxes exactly as you do now, losing nothing.
I go to buy a new car and I HOPE I got a great price, I worked on it, I bargained, I did the research. They say I did really good this team, I got such a great deal!
I "do my taxes" and I HOPE I paid as little as possible. I worked on it, I kept my receipts, I did the research, and maybe I even paid someone to do all that for me and they say I did really good this year, low tax bill!
Both of these things suck, but if I just got a bill from the IRS I'm just going to think "maybe I could've done better" just like if I see a car that just has a price I am going to think "maybe I could've done better"
I really don't like thinking like this!
I wish I were joking or just being cynical. This is a legitimately defensible position. Political science studies have shown this sort of thing: https://oxfordre.com/politics/view/10.1093/acrefore/97801902... . I believe it because it reflects my experience in the US in my lifetime. Nothing happens with government except knee-jerk reactions to things like the Sept 11, 2001 attacks and the TSA. Aside from that, business as usual. The infrastructure crumbles, healthcare costs keep going up, tax code never gets fixed, and on and on. It works fine for the wealthy, doesn't represent or help the people, and never gets any better. That's all, that simple.
Incidentally, I didn't downvote you. I just disagree.
For taxes, I think most people would be quite happy to have a “we think you get/owe $x” statement arrive since it’d require no action and would give ironclad audit protection. People with complex taxes, distrust, or intention to cheat would still do their own but I’d be quite surprised if 20 years later the U.S. didn’t resemble most other countries.
Uh-huh. The world is full of people willing to make things easy for a small fee. In my experience, many of them advertise as bargain options without actually offering a bargain. Is that what Saturn was doing? Does the market really have a perverse enjoyment for haggling or was Saturn full of shit and the market called them out on it?
My dad always said his favorite video game was TurboTax because when he got a high score, it was real money. He loved spending hours every year optimizing his return. He was also the sort of person who really got into rewards cards and airline miles. It was satisfying to him to work the system in his favor. And he's not alone. I once accidentally ended up at a meetup of people who were airline miles fiends. They were very... dedicated.
Personally, I think all of that stuff is tedious nonsense. I'm not interested in letting companies manipulate my behavior. If I'm going to work hard at something, it will be something that creates value. But I recognize I'm an outlier here. Some people would really miss doing their taxes because they've gotten good at it. Which is why it's good that the proposed laws will let them keep going if they want to.
All proposed legislation I’ve see would allow you to fill out a 1040 and send it in, if the IRS prepared numbers don’t work for you.
So if they mark the standard deduction, but you think you can do better itemizing your deductions you would still be able to do that.
It would mean the people that want to optimize their filings can, but every person isn’t forced to do so.
I don't think anyone is advocating for removing the option to file taxes manually. Just let the IRS send a bill by default, and give you the option to file your taxes yourself if there's something wrong or you think you can do better.
And for what? To send troops abroad for some killing, ultimately benefiting only a tiny few. For health care, infrastructure, police, education?
The whole thing is a joke. Perhaps this move will make people wake up and ask for income tax on individuals to be voluntarly, somehow I still doubt so.
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Considering that Mint.com and Credit Karma are free of charge, it's obvious that Intuit is using personal information harvested from these services to generate revenue in the ways described. TurboTax and QuickBooks are mainly paid products, but have the same privacy policy.
I should have communicated more clearly, I was specifically regarding personal finance data collected via TurboTax during the tax process.
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I stopped using turbo tax a long time ago because of their privacy policy. I use olt.com now.