If none of these things apply to you and your taxes are really just a single w2 income it’s pretty simple to just fill out a paper 1040 form (or even 1040ez). You just need your w2 and an hour of time.
I think their point was that this case should be "log in, check the totals match, click OK", not an hour of your time.
Or better yet, not require you to do anything if you believe your withholdings were sufficient.
And taxes have never taken "just" an hour of my time. It's an entire afternoon of frustrated reading up on tax esoterica so I can figure out e.g. whether I should itemize or take the standard deduction (which I always wind up doing anyway). And 14 other things that I promptly forget about.
My taxes for the first few years as an earning adult were fairly simple. Yet, I was never sure I did it right. I’m still not sure I’ve ever done my taxes correctly.
Having a filled in form from the IRS for those first few years would have taught me what correct taxes look like, at least for the simplest of cases.
Now as there are more complications in my taxes, with marriage, multiple jobs, etc. at least I would have the confidence I got my basics right and it would just be a matter of learning about those complications instead.
When I traveled freelance, it was an easy 40 hours. If I'd hired a bookkeeper and an accountant I might have saved most of it but it would have cost me more than I saved.
Something like 85% of people take the standard deduction. I itemize most years, and pretty much everything I itemize (taxes and mortgage interest) are things the government already knows about. I think the only exception is charitable donations.
It would be a great time saver to just get a form from the IRS saying "here's everything we know, edit any mistakes or things we missed".
It would be a lot easier in most cases then you’re making it out to be - and even in exceptional cases, you would only have to address those exceptions, and skip the drudgery of regurgitating all the information the government could have easily found for itself.
The details of mortgage debt are reported to the IRS on a standard form already.
This is already reported to the IRS by servicers via Form 1098.[1]
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And it is able to do it. Software engineering is usually far ahead of most other fields, it is true, but I think this concept https://en.wikipedia.org/wiki/Default_(computer_science) is transferable without it being too much trouble.
You end up with a situation where if the IRS ignores it, then I’m getting away with paying less than my fair share. If they don’t ignore it, then it’s a lot of unavoidable hassle for me.
If the IRS gives me their calculations (which they do already!) then I know the baseline they’re using. If something looks wrong, or they don’t cover some scenarios in my life, I can simply adjust those situations from the IRS baseline.
This leads to a much more transparent, less stressful, more efficient process.
I think the less discussed part about this is the philosophical aspect of it as well. The current system frames the IRS-taxpayer relationship as adversarial. Now, this may be naturally true for 2-3% of high earners. But it’s not for 90+% of people who are basically just receiving a paycheck.
Starting with the IRS baseline allows the process for that 90+% to be more collaborative as opposed to adversarial, with either side trying to see how much they can get away with in the latter system.
The first two would be minor corrections. The latter two would naturally require more attention and detail, but they don't apply to most people.
> Deducting mortgage interest?
The IRS has my 1098s. They know the mortgage interest, principal, and origination date.
But they don't know what you used the proceeds for. Not all mortgage interest is deductible. Nor do they know what use you make of the property that secures the mortgage (primary residence, rental, other). They also don't know about prior year points you paid to originate a mortgage.
You failed to address this important point. There is a difference between acquisition debt and equity debt that the IRS has no information about your situation. Also the "primary residence address" is not required to be provided on the tax return, so no they can't "reasonably assume".
Sure, if you have a bunch of weird expenses/deductions you can file, but for most people, the numbers the government has are already correct.
We would need a fair few laws for the government to be able to get the information to cover most people's taxes, though I think this is less true after the standard deduction was doubled during the Trump years. (Banks have reporting duties, but are not run by the government so anything not directly related to fraud prevention isn't covered under the law)
The government already has all the info they need to create near perfect tax returns for everyone. The IRS doesn't necessarily have it, but the information exists in databases that can be accessed.
The way it's done in Japan, they send you a form. If it's right, you're good and you do nothing. If it's not, you send them a correction.