Hacker News Reader

Comment by dmd | Hacker News Reader

94% of Americans make less than $200k a year. Not everything is meant for "software engineers in California".

I don't get why there's an income cap though. There's nothing that gets more complicated on income alone, only if you add extra stuff to track

In an effort to keep the scope manageable for the pilot year, the Direct File team chose to have an upper income limit so they would not have to support Form 8959: Additional Medicare Tax (https://www.irs.gov/pub/irs-pdf/i8959.pdf) which only kicks in at that threshold.

Though it's also very likely at these high incomes that you would be disqualified for other reasons (investment income etc)

8960 (net investment tax) is another form that only applies at 200k or more income.

Anybody who makes more than about $200K-$300K/year is likely making a mistake if they don't have a CPA.

What makes you say that? I'm assuming you're adding other assumptions.

My wife and I combined make about $300K/year. We don't run a business, don't make charity contributions, only pay ~$5K in mortgage interest, and don't have kids. We don't even do retail stock investing (EDIT: And I haven't exercised any employer stock options), just a 401k, an IRA, and a 5.25% savings account.

We take the standard deduction. I can't imagine a CPA would be able to find so many possible deductions that it would be worth itemizing.

Yup totally silly. My CPA wouldn’t even take you on as a client, he would say go to HR block if you don’t want to do it,

Which is also silly. My experiences with HR Block was that they basically had their own version of a TurboTax-like thing, and all they were doing was literally asking you for the numbers for each question. There was zero critical thinking applied.

I had just bought a house, just bought a hybrid, started working from home, and was new to the US.

"What are you claiming?" "What can I claim from this?" "I'm not sure. But I can put these numbers in here and see what it says."

You're literally paying for someone to type in the same numbers you would, with as much (or at times less) knowledge than you (who is also less invested than you in getting it right, but much more invested in selling their 'audit protection' stuff).

The IRS prays for citizens like you!

I disagree. If there's a CPA who wants to give me money-back guarantee, be my guest.

I do my taxes first. You (CPA) look over it, if can save me any additional money, I'll give you 1/2 of the additional money saved as your compensation. Deal?

Part of their fee is for you to not go through doing it yourself, so, no.

> if they don't have a CPA.

There are alternatives to CPAs, who are licensed by individual states and don't necessarily specialize in taxes. Several states, including California, require testing and registration for paid tax preparers who aren't CPAs or Enrolled Agents. EAs are the only federally-licensed tax professionals with unlimited practice rights before the IRS.

It's reasonable to assume that CPAs pass along the costs of their marketing and lobbying efforts to their clients, without any guarantee of higher quality compared to the other professionals available.

Yeah no. I thought I'd hire a CPA one year to see what 'breaks' they might offer.

All they did was fill out Turbotax for me, and charge me an extra 150 for that.

I kind of wonder if software engineers making this kind of money but no tax problems should be getting advice from folks who can look back and see what they should have done. (tax problems sometimes come from outlier behaviors that might be good)

I meat this is Y Combinator Hacker News, so I would expect "software engineers in California" to be a significant fraction of the user base here.

The problem is you're exposing yourself as someone extremely self-centered, and someone that assumes their lived experience is equivalent of everyone else's, and adjudicating the utility of this particular thing as if you are reflective of the larger population.

Saying the majority of engineers in California make at least $200k makes you even more out of touch. According to Glassdoor, over $200k for a SE in CA is 90th percentile. The average SE in CA makes $132,000

https://www.ziprecruiter.com/Salaries/Software-Engineer-Sala...

>The problem is you're exposing yourself as someone extremely self-centered, and someone that assumes their lived experience is equivalent of everyone else's, and adjudicating the utility of this particular thing as if you are reflective of the larger population.

Most of Hacker News and indeed the tech community at large exhibit "I don't understand life outside of California cities." syndrome, this by itself is nothing new.

True, but we’re talking household income which includes partner income. Eg $140k + $60k or $120k + $80k. Your main point is still fair, though.

>make at least $200k makes you even more out of touch.

$200K as the entry level for FANNG ( what it used to be call ), and then Big Tech and now Magnificent 7 has been the norm on HN since 2016. It wasn't until 2023 did reality started to hit many.

Which is ~$70 per hour - which you can earn from US firms while remoting across many timezones.

$70/hour is about $145k/year. If you're meaning it's close to $200k/year, that'd be $95/hour assuming 2080 hours/year (52 weeks at 40 hours a week).

I always assume 48 weeks (1 month vacation per year as is normal in most places)

Then $70/hour is only $134k/year, still a far cry from $200k. $200k for 48 full weeks of work works out to around $105/hour.

Could you show your math? This is driving me crazy because I get:

48 x 40 x $70 = $138,240

Which is far from $200k. How are you computing?

GlassDoor and Ziprecruiter are grossly out of date.

https://www.levels.fyi/t/software-engineer/locations/san-fra...

Use Levels, but change the location to the other big cities in California. The LA number is ~$80k lower than the SF number, while the Fresno average is $120k. The SF area is a wild outlier even in big California metros.

Sorry, but they're far more representative than levels.fyi. The latter has a very strong sampling bias - most of the companies in its DB are on the high end of the payscale.

Your suggestion that we don't / shouldn't care about anything other than ourselves is more than a little insulting, whether you intended that or not.

In any case, like the root of this comment tree says, the best way to make sure this program lives to reach us is to make sure it paces itself. If that means another year or two of TurboTax, that's A-OK!

Some people have a broader view of the world and care about things which might not directly impact them

This 100% - thank you

They are still a tiny minority. I mean HNers from everwhere from Wyoming to Germany and Brazil.

One of the best ideas the Reagan administration had was paperwork simplification, they introduced a 1040EZ for (roughly) the same kind of filer that Direct File works for.

My son put off paying his 2023 taxes to the last minute, I told him he should try Direct File (I'd believed the story that it would be easy) but when he tried it he had extreme difficulty authenticating himself, I think because they check you against consumer databases and they could not compare to past tax returns, credit history, etc. because this was his first tax return and he had no credit history.

We were forced to wait for a long time to talk to a human operator for him to verify his id. In that time I found out that there was no longer a 1040EZ, see

https://www.investopedia.com/terms/1/1040ez.asp

but I was able to fill out a complete 1040 and the New York equivalent of it before we got through to the operator. We just got the check from New York the other day after about 6 weeks, haven't heard from the IRS yet.

We have internet everywhere else. They even measure it in gigabits!

Reply on news.ycombinator.com