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IRS to begin trial of its own free tax-filing system

_ihaque
76 replies
22h7m

For anyone interested in why the system looks the way it does, I recommend patio11's insightful recent blog post, which is nominally about payroll systems but ends up discussing the history of taxation in the US because that's the origination of many of these systems: https://www.bitsaboutmoney.com/archive/payroll-providers-pow...

A relevant quotation for much of the discussion here:

And, relevant to the question of whether Intuit controls U.S. tax policy: it can’t, because that would imply they have wrested control from Norquist. Norquist considers a public filing option a tax increase by stealth and opposes it automatically.
neilkk
48 replies
19h23m

patio11 has a huge and well known bias here, which is that he wants to claim, not necessarily with evidence, that all inefficiency is caused by governments and not by the private sector.

A comparison of tax filing in the United States with other countries, including those where governments are much bigger and more interventionist, leads to a different conclusion.

mixdup
33 replies
16h26m

that all inefficiency is caused by governments

Forget about the evidence of other countries (which is completely valid), I just hate the argument that government inherently because it's government is inefficient and will never be effective

In the US half the people in charge of the government hate it and want it to fail. Of course it's going to be bloated, inefficient, and costly. It's being sabotaged from the top. If everyone agreed that, once we make a choice on what the government is going to do we should do it well, we could have government services that are just as effective as whatever private enterprise example people always like to cite (being from the South it's usually the Chick Fil A drive-thru)

moduspol
20 replies
16h18m

And that's why our west coast cities, which are not run by the half that hates government, are shining beacons of just how effective and successful governments can be.

ksenzee
15 replies
14h30m

There's this idea that west coast cities are shitholes, and honestly it's BS. I live in the Seattle suburbs and I'm downtown regularly, and the only obvious problem is the public disorder visited on us all by Martin v. Boise. It's pretty clear from housing prices that wealthy people are still happy living in Seattle: the market is speaking loudly. Don't get me wrong—I live in the suburbs for a reason, you couldn't pay me enough to live in Seattle—but as cities go, it's fine. Republicans who hate big disorderly cities like I do should just enjoy their suburban parking lots and breathing room, and quit pretending city chaos equals Democratic mismanagement.

int_19h
8 replies
13h29m

I agree that in many cases there isn't any substance behind the talk. Yet the single largest state-to-state flow of people is from California to Texas, not the other way around; surely there's something objective that is driving that. And, given the time and effort required for such a move, it's not something most people would do on a whim without doing at least some research.

rayiner
2 replies
13h6m

An even better comparison in California to California. The year Apple IPOed, Reagan handily won California. Santa Clara County only voted a democrat for President twice between 1948 and 1987–LBJ (who won 20 points nationwide), and weirdly enough Hubert Humphrey. In the founding and golden ages of Silicon Valley, it was a red suburb in a red state. It was like what Florida is now.

int_19h
1 replies
8h51m

Yeah, no. GOP today has very little semblance to GOP of Reagan times (although the seeds of the present insanity have been sown then, and even earlier - Trumpism is a perfectly logical end result of Birchers, "moral majority" etc). And there's nothing "golden age" about Florida today; certainly not when it comes to quality of governance.

rayiner
0 replies
4h28m

In terms of tone, it’s quite different, but in terms of governance Trump’s term was a pretty standard GOP term with the exception of immigration and foreign policy—which aren’t issues at the state level. Tax cuts, bootstraps, etc.

Calling Trumpism an extension of Bircherism is a coping mechanism, seeing as how the GOP is winning record shares of minorities under Trump. Instead, the Trump GOP is a hybrid of the Reagan GOP and Jacksonian/Jeffersonian populism. The opposition to immigration given the prospect of cultural change also appeals to many immigrants who left those places for good reasons. My parents immigrated to Ronald Regan's America, not Kamala Harris's America.

Florida is a tremendously well governed state. It has great schools, low taxes, low debt, a booming economy, etc. I know multiple families that moved there from Illinois and New York in the last couple of years.

ksenzee
1 replies
13h2m

Hm. We have plenty of Washington-to-Texas migration from the suburbs, and there's no serious contention that, say, Auburn and Kent are mismanaged by Democrats. I know multiple families who have left for Texas in the last few years, and it wasn't "this place has crap government," it was "this place is woke." That is, they wanted more "traditional values" in their kids' schools and fewer BLM and pride flags. To me that's a valid and objective reason to leave (and honestly they're welcome to go, I don't want them running for school board even if we are friends) but it doesn't support the contention that government here is incompetent. It just means government here is socially liberal, which it unquestionably is.

int_19h
0 replies
8h56m

There are certainly people leaving for these reasons. Yet polls also show that there are also plenty of left-leaning folk who move.

joshuamorton
1 replies
11h4m

"why is the largest single state transfer from the largest state by population to the second largest state by population" is perhaps not that surprising a result.

int_19h
0 replies
8h54m

Perhaps, but look at the entire people. California is losing people; Texas is gaining them. And it's not just California that has a net outflow to red states; New York and Illinois are also seeing an outflow.

intended
0 replies
1m

[delayed]

rayiner
3 replies
13h16m

That doesn’t really respond to the point, though. Is Seattle’s government efficient and effective? To my recollection, Seattle doesn’t have great public services.

ksenzee
2 replies
12h53m

It doesn't look to me (from 20 miles away) as if Seattle's government is notably efficient or effective, and I'd even say one-party rule is partly to blame: opposition parties serve a useful purpose. But I don't think the standard Republican sneer of "look what a crappy job the Democrats do of running the big cities" makes any sense, either. The things Republicans are pointing at as symptoms of bad Democratic government are mostly just side effects of what people in American cities like.

rayiner
1 replies
12h1m

They like crappy public transit, trigger-happy cops, and shitty schools?

ksenzee
0 replies
11h14m

This is where it gets subjective again and I bow out, because the Seattleites I know would disagree with you (except about the cops, which is the same problem nationwide).

jandrewrogers
1 replies
12h10m

I think there is a correct perception that many west coast cities are shitholes relative to what their per capita tax expenditures buys in most other cities. It is an argument about relative ROI, not absolute quality of life. If I spend $150k on a car, I don’t expect a used Toyota Corolla.

Cities like Seattle generate inexplicably little public value for the extremely high per capita spending. It should be much nicer for the amount of money it spends. The quality of services relative to expenditure is not defensible. Many cities do far more with far less. I’ve lived in Seattle around downtown for a long time, but it is far from the only city I spend time in. If per capita spending was correlated with quality of city experience, Seattle should be one of the best cities in the world to live in, but I don’t think anyone would make the argument that this is the case. As with San Francisco, most of that taxpayer money is lit on fire with no accountability and no contribution to the public good.

This is similar to the observation that on the same stretch of highway, California somehow manages to spend 10x per mile as its neighbors for visibly and audibly worse roads. People have made jokes about it for decades because the contrast is so stark if you drive on those roads.

It is not unreasonable for taxpayers to expect better than what is available in other cities when they are spending several-fold what those other cities are to achieve, at best, the same results. It doesn’t have to be a total shithole to be grossly mismanaged. People in Seattle spend enough tax money per capita that their city experience is far worse than what they have a right to expect.

It isn’t a political issue.

ksenzee
0 replies
11h1m

I agree with almost everything here, but this isn't what I'm referring to. What I hear ad nauseam is not that SEA/PDX/SFO are used Corollas but that they're Pintos with fire coming out the tail end. If what you're hearing from Republicans is "Seattle is an ok city but should have much lower taxes for the services they get" then I want to know what media you consume, so I can recommend it to my right-wing acquaintances.

nouveaux
2 replies
14h30m

I'll bite. In what ways are non west coast cities is more efficient than west coast cities?

refurb
0 replies
14h9m

Look at budgets per capita.

moduspol
0 replies
1h36m

I'm not sure they would be. I limited to "west coast" cities because other cities' issues are sometimes blamed on Republican governors. West coast cities typically aren't.

wernercd
0 replies
12h14m

"shining beacons" The same cities in states that are now in massive deficits? or covered in feces? with massive increases in drug and homeless problems? The same cities that have people feeling from states because of overregulation and overtaxation?

Those are the shining beacons of success?

rayiner
3 replies
13h54m

In the US half the people in charge of the government hate it and want it to fail. Of course it's going to be bloated, inefficient, and costly. It's being sabotaged from the top.

How are republicans sabotaging New York City, San Francisco, etc? Historically, half of all governmental spending in the country happens at the state and local level—-and that comprises most of the services that affect people’s daily lives the most. Blue states could have big, active, well run governments if that were possible, and republicans could do very little to “sabotage” them.

In practice, the most well-run places in the country tend to be moderate red areas where government has limited objectives but does it well. I grew up in red state Virginia and it was very well run. When California was well run, it was a red state. Florida is a well run state. I live in a Romney ‘12 county in a blue state, and it’s really well run, unlike Baltimore, where I used to live. I actually love going to the county landfill/recycling center, because it’s so neat and orderly and well run.

hiddencost
2 replies
12h18m

farting noises

This is based off of a small number of books that were debunked, but seems essential to conservative ideology.

rayiner
1 replies
11h52m

Look, I’d love it if there were American cities like Copenhagen. But there aren’t any, and it’s some serious cope to blame that on republicans, seeing as how a republican couldn’t get elected dog catcher in these places.

mlrtime
0 replies
5h21m

I'm with you. The Republicans are the cause of all problems for liberals, and when you point out issues with an entire City->State government chain of Democrats it's still the other parties fault.

I love living in a large city, but in the last 5 years it has not become worth it with all the political fighting, high taxes, drugs, homeless, crime, etc... I found peace in a small city, low taxes and a government I don't think about because they stay out of my way.

ants_everywhere
2 replies
14h14m

I just hate the argument that government inherently because it's government is inefficient and will never be effective

The big incentive problem here is that democracies reduce the power held by private individuals. So (primarily wealthy, powerful) private individuals have an incentive to market the idea that government is inefficient to reduce the impact of decisions made by democratic choice.

This same conflict occurs throughout history. For example, the Magna Carta was a major concession of the power of the English King to lower nobility. There are always going to be people who dream of running their own fiefdom and see democracy as at best a nuisance and at worst an active impediment.

tbrownaw
1 replies
13h21m

For example, the Magna Carta was a major concession of the power of the English King to lower nobility. There are always going to be people who dream of running their own fiefdom and see democracy as at best a nuisance and at worst an active impediment.

...what? Are you seriously trying to claim that absolute monarchy is a form of democracy?

ants_everywhere
0 replies
4h9m

The opposite. Absolute monarchy is essentially when an individual (the monarch) has absolute power over a fiefdom. Similarly to how slave-owning plantation owners wielded near-absolute power over their plantation.

What I'm saying is that there has always been this conflict where (some) private individuals want absolute reign over others, and democracy limits this power. The Magna Carta is just one classical example of that.

The distinction between private and public is a little blurred when it comes to absolute monarchs, but the general trend is that the more absolute power a monarch has, the more they're running it essentially as a private estate. That's why lists of the wealthiest people in history often include rulers with absolute power.

Due to the conflict, the private power of monarchs has weakened. That's why, for example, in The Crown we see a monarchy that has to concern itself with public perception and the Prime Minister. But William the Conquerer essentially owned much of England.

AnthonyMouse
2 replies
15h3m

I just hate the argument that government inherently because it's government is inefficient and will never be effective

The more general argument is that monopolies are inefficient, and most instances of government programs are monopolies.

In the US half the people in charge of the government hate it and want it to fail.

This is uncharitable. It's more accurate to say that they expect it to fail and hate government programs because they regard them as inefficient and net harmful on average.

If everyone agreed that, once we make a choice on what the government is going to do we should do it well, we could have government services that are just as effective as whatever private enterprise example people always like to cite

The inefficiency is caused by the principal-agent problem more than anybody's ideology. Even if every politician wanted and expected the government to be effective, you still have the problem where a government program is providing a service consumed by e.g. 5% of the population and is serving 20% of them poorly. This is only 1% of the voters, who themselves have to balance their vote against their positions on every other issue on the ballot, whereas in a competitive market the company doing that would be losing 20% of their customers to a competitor and a competitor would be available to satisfy that 20% of the customers.

Meanwhile if a program is inefficient but its total cost is <1% of the total government budget, nobody is paying attention to it, but the same is true of most other programs which causes the average efficiency to be poor. Whereas the proprietor of a small business which is <1% of the economy is going to care quite a lot if it's wasting money and be paying attention to that business in particular, because it's their business and it's their money.

We don't have great solutions for these in the public sector. The best you can say is that sometimes it's worth it. For example, every taxpayer can use tax filing software and it has no unit cost, so even if the government is less efficient than a private company, that could still be worth it because you can spread the fixed cost of developing it over so many people. This is a general argument for the government to create and publish open source software whenever there is a reasonable expectation it would be widely used.

What it isn't is a general argument for government programs, because products with zero unit cost are relatively uncommon and so are software products that are both widely used (as opposed to having a particular niche) but not already well-served by existing free software. Software in the service of regulatory compliance is unusually well-suited to being published by the government. (And they should definitely be publishing the source code.)

Buttons840
1 replies
14h42m

The more general argument is that monopolies are inefficient, and most instances of government programs are monopolies.

Even more general, markets where it is hard for new competitors to enter are inefficient. It's perfectly possible for a market with 10 or 20 competitors to stop competing for mutual benefit. I'd even argue a monopoly (a single dominant company) is fine, so long as it's easy for competitors to enter the market.

Consider the WW1 Christmas truce and other fraternizations. If the same actors are together long enough, they'll act for mutual ease. That was a good thing in WW1, but it's not a good thing when companies stop competing in a capitalist society.

BurningFrog
0 replies
13h44m

It's perfectly possible for a market with 10 or 20 competitors to stop competing for mutual benefit.

As I remember it, the empirical research says two competitors can keep a stable monopoly cartel going for a long time. three can maybe do it for a while. With larger numbers things get very unstable.

lispybanana
1 replies
15h2m

You're suggesting the half that wants smaller government impedes the day-to-day productivity of the half that wants it bigger?

Some things work well in government given limited resources. Other parts of government seek bigger and bigger budgets to implement ideological goals, no matter their efficiency.

(Any amount of money spent is justified by the end goal since the purpose of government is to print however much money is required to ensure complete social welfare.)

int_19h
0 replies
13h27m

The half that wants it smaller, when it succeeds, guts the government, with the result being that whatever remains is incapable of properly carrying out the duties it is still assigned.

toomuchtodo
12 replies
18h57m

Indeed! Japan’s system is very efficient, and he has lived there for some time, so he should be familiar.

Similarly, it took the US forever to implement an instant payment system (commercial banks built Zelle via Early Warning Systems and RTP via The Clearinghouse, and the Fed finally built FedNow after Congress directed them to in order to ensure universal access) while India and Brazil rapidly rolled out their implementations (UPI and Pix, respectively).

These are intentional choices.

https://www.nytimes.com/2017/04/14/opinion/filing-taxes-in-j...

Dalewyn
6 replies
17h57m

Japan’s system is very efficient,

Yes, because there is only one tax authority (国税庁, Kokuzeichou, National Tax Agency).

Here in the US, we have more than one tax authority:

We have the IRS, which is the federal tax authority.

Each state then has their own tax authority.

Each county then has their own tax authority.

Each city then might have their own tax authority.

And we must submit filings and returns with and pay taxes to all of them as applicable, and they all operate on their own laws, regulations, and taxes.

To reframe this, let's talk about sales tax. In Japan, there is only one nationwide sales tax; because there is only one tax authority.

In the US, sales tax might be levied at the state, county, and city levels as applicable (federal doesn't levy sales tax, as far as I'm aware). Some might not have sales tax, others might, and they are all different rates. The sale tax in one city will be different from its neighbouring city.

TL;DR: Paying taxes in the US is complicated because everyone wants their taxes.

mrmanner
2 replies
17h39m

Paying taxes in the US is complicated because everyone wants their taxes

Everyone wants their taxes and refuses to cooperate. Most countries have some kind of local or regional taxes, and the single tax authority is responsible for collecting and distributing them all.

I get that the federal level in the US is a bit special (EU for example doesn’t tax citizens directly, instead the member states pay fees from their tax revenue). The local tax authorities per county surprised me though - what a mess…

phpisthebest
0 replies
10h44m

>I get that the federal level in the US is a bit special (EU for example doesn’t tax citizens directly, instead the member states pay fees from their tax revenue).

the US Federal government was not suppose to tax citizens directly either, thanks to the 16th Amendment that was passed under the lie that it would only ever be a "Tax on the rich" of 3% and only apply to 1% of the people, now the federal government takes nearly 25% of all citizens incomes,, and uses that money to bribe people for votes and extort states for policies they desire...

mixdup
0 replies
16h21m

Most countries have some kind of local or regional taxes, and the single tax authority is responsible for collecting and distributing them all.

Most states operate this way. Counties will often collect city taxes, and in some states the state will collect the city and county taxes. There are obviously exceptions but within states there's a lot more cooperation than you might think

And most individuals are not paying income taxes to cities or counties, they're paying property taxes and that is typically automatically handled via their mortgage company

mixdup
0 replies
16h23m

I'm curious percentage wise how many people are having to file returns with their city or county. I've lived in two states (Alabama and Georgia) and even in a city with an "income tax" at the city level and have only ever had to file federal and state taxes

In Alabama the county and city I lived and worked in both had what they deem occupational taxes which are effectively an payroll tax, but there was no system of exemptions or refunds, it operated as a payroll tax only. My employer had to file the taxes, not me

I suspect the vast majority of people in the US only ever file state and federal returns, although a lot of people live in small states or along state borders so a lot probably have to file two state returns

kalleboo
0 replies
16h28m

Japan also has prefectural and city taxes that vary by prefecture/city, and get charged separately (the bill comes later in the year from the national tax), they still get their taxes. Just in a less convoluted manner.

int_19h
0 replies
13h22m

For most individuals (as opposed to businesses), the only relevant taxes for the tax return are federal and state income taxes. Even then, there are several states in the country that have no state income tax, so you end up filing only the federal return. I live in such a state, and I still find the system very convoluted compared to what I've seen elsewhere.

Most crucially, it's still unclear to me why a return has to be filed at all for any tax that is already paid (from wages), and why it has to be manually compiled in cases where the agency has all the information about taxable income. If I don't owe anything, I shouldn't even need to file anything. If I do owe taxes, send me the forms prefilled and let me either sign off on them or add any missing info as needed. Anything over and above this is just pure waste of everybody's time and an opportunity for parasites to profit.

pezezin
4 replies
18h4m

Really? I live in Japan, last month I had to fill my taxes, and I found the process to be really convoluted and annoying compared to my home country (Spain). Likewise, banks feel really obsolete and inefficient here.

I shudder to imagine how bad the American system is to make Japan look good :/

mcherm
3 replies
17h26m

My wife calculates and submits our taxes (here in the US). It typically takes her 40 to 60 hours to complete, and that's after spending around $100 USD on tax preparation software to make it easier.

To be fair, our taxes are more complex than many people's (I live in a different state than my employer and we have some stock market investments), but it's still ABSURDLY difficult.

And I'm not counting the time needed to respond to Federal or State follow-ups 9 months later where they question the values we provided. That happens to us about every 2-3 years. So far it has only once found a minor error on our part.

georgyo
2 replies
16h49m

What?!

I do my taxes myself for my family. I have W2s, K1s, various 1099s for investments, own a home, and deal with carry overs from the previous years.

It takes me about an hour to do it. And then another hour to amend them many months later when I get my actual K1s.

How hard is it to answer 100 questions and copy numbers over from one place to another? W2 box 1 goes to W2 box 1. No I don't own a corn farm. I donated this much to these organizations. I would consider 25% of my rent for my home office.

Both turbo tax and tax hawk will connect to your investment bank and populate all the obscure 1099 stuff there. Dealing with international investment was definitely confusing the first time around, but definitely not 40 hours worth.

40 hours is 8 hours a day for 5 days straight. I don't know what you value yours wife's time at, but if it really takes that long you might be better off paying a CPA a few hundred dollars.

zamfi
0 replies
15h14m

Yeah, just taxes alone doesn’t seem like it should take that long—but doing accounting for taxes can take a long time, especially if you’re self-employed and taking deductions, or have employees for your schedule-C business, etc.

Perhaps the poster is including the accounting in the tax prep.

mv4
0 replies
15h43m

Same. W2s across 3 states, K1s, 1099s, LLC and Schedule C - takes a few hours, incl. state filings. Usually complete it in one day.

PeterStuer
0 replies
11h35m

Having worked in IT with both the public and the private sector, my opinion is there is no difference in 'efficency' between them at all.

Efficiency seems inversely correlated with the size of the organization. Public sector usually has large orgs, but they are not run less efficient than equivalently sized enterprises.

You might jump to the conclusion that smaller entities would be the efficency solution, and even observe how this allows sometimes for a smaller entity to outcompete a big enterprise. However, if you approach it from a more systemic analytical point of view you have to take into account that surrounding the 'small' efficient business, there are dozens if not hundreds of unsuccessful competing small entities vying for the same niche. Taken together and purely looking at aggregate efficiency, this collection of competing businesses is even less efficient. The strenght of an openly darwinian struggle lies in innovation and adaptation, not in aggregate resource waste reduction.

leereeves
25 replies
20h22m

Norquist considers a public filing option a tax increase by stealth and opposes it automatically.

When phrased that way, it sounds ridiculous. But those are the author's words, not Norquist's or ATR's.

What Norquist and ATR want is for people to be aware of taxes. In their words (from the article): "More than any other public policy, the way the government raises revenue—how much, at what rates, under what circumstances, from whom, and for whom—has the greatest impact on our economy’s performance."

And even the article admits that making taxes easier to file has the side effect of "decoupling public sentiment and policy changes" (that is, making "tax increases by stealth" easier):

ATR [Norquist runs Americans for Tax Reform] is institutionally skeptical of withholding, because they believe that withholding allows one to increase taxes by stealth. I don’t think it is excessively partisan to say that, if one phrases that claim a bit more neutrally as “withholding increases tax compliance by decoupling public sentiment and policy changes,” the people who designed the withholding system would say “I’m glad the National Archives makes our design documents so accessible. We wrote them to be read!”
koolba
14 replies
19h57m

"More than any other public policy, the way the government raises revenue—how much, at what rates, under what circumstances, from whom, and for whom—has the greatest impact on our economy’s performance."

A perfect world would have people writing a check for their entire annual tax just before stepping into the voting booth.

lokar
5 replies
17h55m

And the large number who get a net payment instead would get a check right then?

I don’t think that will accomplish what you expect.

One of the main reasons conservatives and libertarians want filing to be hard is to confuse people into thinking the income tax hurts them, when in reality it benefits many of them.

r3trohack3r
4 replies
17h39m

Taxes in the US are not due annually. They are due on an ongoing basis.

You do not get a net payment. You paid your taxes throughout the year every paycheck. Your employer likely files quarterly.

At the end of the year, if you tally up your taxes and figure out you’ve given too much of your money to the government, you get some of your money back.

It’s called a refund. Not a payment.

I’d put those ongoing taxes throughout the year into the bucket of “shadow taxes” GP refers to. I suspect many people do not view their refund checks as a no interest short term loan they floated to the government. Their refund check came from their paycheck.

lokar
3 replies
17h34m

Some very low income workers that get the EIC end up with a net payment.

r3trohack3r
2 replies
16h47m

TIL!

Every tax form I’ve ever filled out has an instruction like:

Enter the lesser of lines X and Y

when applying deductions and credits to prevent them from exceeding some value.

I’m surprised to learn that the EIC isn’t clamped like this.

lokar
0 replies
16h22m

It is a refundable credit

FrobeniusTwist
0 replies
14h58m

As noted elsewhere, the EITC is a so-called "refundable" credit. It wouldn't serve its intended purpose if it wasn't refundable.

consp
5 replies
19h53m

A perfect world would have people writing a check for their entire annual tax just before stepping into the voting booth.

That would definitely be a horrible idea. No, I won't vote for drivable roads because I just payed my taxes, potholes be damned. And afterwards complain about the potholes anyway.

leereeves
2 replies
18h37m

I think most people would still vote for drivable roads, and that there are a lot of government policies that could be eliminated before drivable roads are even on the table.

morelisp
0 replies
17h32m

My experience in Omaha suggests drivable roads get sacrificed much sooner than one might expect. (And no, not for something nice like bike paths or even like, functional sidewalks.)

int_19h
0 replies
13h19m

There are places in US where the firefighters won't respond to a fire in buildings where owners haven't specifically paid the bill for their own coverage, because the local voters like it that way (those that haven't had their house burn down while the coverage lapsed, anyway).

koolba
0 replies
19h46m

I never said you don’t get to vote if you don’t pay your taxes. Nor that you have to pay taxes to vote.

I’m saying those that do pay taxes should have the totality of the amount of their income that is going to the government in mind when they head to the polls.

gedy
0 replies
17h14m

No, I won't vote for drivable roads because I just payed my taxes, potholes be damned.

I honestly think the issue would instead be people not wanting to pay for the public service pensions for the former pothole-fillers.

OfficialTurkey
1 replies
19h51m

What in the libertarian nonsense is this? Why not make people ride public transportation or use a public restroom or sit in a park or read about the history of the interstate system or visit a national park just before voting?

labster
0 replies
17h56m

We should do voting at the annual BLM mustang round-up so voters can get a free pony.

consp
7 replies
19h55m

And even the article admits that making taxes easier to file has the side effect of "decoupling public sentiment and policy changes" (that is, making "tax increases by stealth" easier)

How on earth is this possible? Instead of not having any clue, you actually get to see everything. My taxes have been automatic for years and I still have to approve every step of them along the way and I get to see and approve everything which had been filled in. The big difference is I now not have to spend hours researching everything if it remains the same as it was last year and only check if it changes.

tpmoney
4 replies
19h41m

Two psychological mechanisms I can think of for this:

It's one of the reasons why every company in the world wants you on auto pay. It's a lot easier to keep you as a customer through the price hikes if it's only a line item on your bank statement rather than an explicit payment you're making every month. If most people are the same every year, then a small increase from one year to the next barely gets noticed because people are going to be looking for changes to their records, not changes on the bottom line, so the fact that the bottom line is 0.5% more this year will be more likely missed in the face of answering "are the records the IRS claims they have about me the right ones".

The other is related to the concept of "price anchoring". Approving pre-filled numbers becomes more about validating that your information is correct, rather than determining (and looking at) the tax value for the year. It pre-assumes the amount owed is correct (in both the calculated and the policy sense) and sets the expectation that you probably owe whatever the pre-calculated amount is.

Whether it actually plays out in reality and tax payer behavior is up for debate. but certainly there's a reason why so much of sales and financing tactics throughout commercial world tries very very hard to steer you away from the actual math when you pay for something.

consp
3 replies
18h54m

It pre-assumes the amount owed is correct (in both the calculated and the policy sense) and sets the expectation that you probably owe whatever the pre-calculated amount is.

Considering the penalties for getting it wrong. Simply no. You assume it is correct if it matches the data you have, not by default.

What it does do is stop you from having to calculate the nitty whitty parts of the statements when the data from the tax agency matches the ones you got from the bank, your employer etc and you have the partial coverage of having been provided wrong data. You are still wrong but -most likely- you can amend if there are discrepancies outside of your control.

You get an extra point of reference, not a -get out of filing for free card-. Since the system I'm part of also forces companies to provide specialized summaries it's a lot easier to get the right data as well. Correctly filing (which includes ALL deductables) should never be so complicated you require a special degree or a leeching company to do it for you.

tpmoney
2 replies
18h37m

Considering the penalties for getting it wrong. Simply no. You assume it is correct if it matches the data you have, not by default.

We live in a world where people routinely borrow from "tribal lending services" at 500% APR. Where they buy a car on the monthly payment value without consideration for APR or loan term. Where an entire financial crisis was caused in large part by people taking out bad loans they knew (or should have known) were impossible for them to service properly despite the consequences. Where people don't review their own pay stubs only to discover their employer has been cheating them for years or has improperly withheld taxes. And a world where despite the existence of both the 1040EZ and e-filing people still find tax paperwork confusing and too hard.

Forgive me if I don't share your optimism on whether most tax payers would assume the answer the government got was correct or not, regardless of the consequences. It's also not an unreasonable assumption either, why in the world would you want a system where you couldn't assume the result was correct most of the time?

fn-mote
1 replies
14h0m

[...] I don't share your optimism on whether most tax payers would assume the answer the government got was correct or not [...]

Rephrasing your response, it sounds like you would say you expect most tax payers lack the ability (or interest) to compute their taxes correctly under any circumstances.

Review has nothing to do with it.

I believe that providing people the correct numbers is just going to increase compliance. They don´t want to audit anything. They want to pay what they have to pay and get on with the rest of their lives.

tpmoney
0 replies
12h21m

I can't speak for "under any circumstances" but I suspect the vast majority of tax payers already outsource their tax computations to either one of the major software vendors, one of the major tax services or their own financial institutions / private accountant. I assume this because otherwise I would not expect "IRS makes a self service portal" to be headline news or a game of politics.

Beyond that though, the thread discussion was about whether there are any mechanisms by which the government pre-filling people's taxes could '[make] "tax increases by stealth" easier'. I proposed there were, though with no claims to the degree to which that actually had real world impact on tax payers and their behavior.

If we assume as you say that people "want to pay what they have to pay and get on with the rest of their lives", then it seems reasonable to think that anything which reduces the amount of effort and thought necessary for the process also has potential to '[make] "tax increases by stealth" easier', simply by the fact that it reduces the amount of thought one needs to afford to the concept of taxes in the the first place.

The alternative would be to propose some mechanism by which the government pre-filing people's taxes would increase the degree to which they pay attention to their taxes. Or at a minimum one needs to argue that people would pay exactly as much attention as they do now and thus it would be a net-zero change in focus on taxes, but if that's the case, then any compliance increase would be a function of making it easier to be in compliance at all, which is tangental to whether or not it '[made] "tax increases by stealth" easier'

leereeves
0 replies
18h1m

The big difference is I now not have to spend hours researching everything

I think you've answered your own question. If it weren't automatic, you would spend hours learning about tax policy, what is taxed, what is deductible, and what credits exist.

Personally, I learned most of what I know about taxes while preparing my own.

bombcar
0 replies
16h52m

Consider the number of people who think having a bigger withholding and receiving a larger return is free government money.

snotrockets
0 replies
16h36m

Norquist don't want people to be aware of taxes. They want to not pay taxes; and believe that if taxes would be citizen friendly, people would be more welcoming to pay them. By making it as obnoxious as possible, they hope to have a society that provides them services by the magic of fairy dust.

CogitoCogito
0 replies
19m

What Norquist and ATR want is for people to be aware of taxes.

Norquist is entirely disingenuous. Nothing would stop a tax payer from looking into the details of taxes assessed just because the government prepared something for them. (In fact, nothing would prevent a tax payer to continue to use TurboTax to verify and understand the taxation.) On the flip side, nothing about the current system actually makes tax payers more aware of the taxes they’re paying. Half the marketing of TurboTax is to allow you to finish your taxes quickly by basically just clicking through and adding basic information.

Speaking for myself, I would definitely be _more_ aware of taxes I’m paying if the government would prepare taxes for me. When comparing my filing of taxes in the US to the filing in Sweden that’s definitely the case. Sweden sends me information which I can then verify and correct if necessary. The grunge work is done and I can focus on details. In the US, I need to waste a bunch of time duplicating work and the go through the details later (and hopefully have enough time and energy to do so).

P.S. I keep using TurboTax as an example but they’re obviously not the only one. I chose them since they’ve parasitically attached themself to the current system and lobbied government to keep it from making things more efficient at a detriment to their bottom line.

nvr219
0 replies
20h35m

Norquist is so flipping ridiculous.

k2enemy
48 replies
1d

A spokeswoman for Intuit, Tania Mercado, criticized the direct file project as a “half-baked solution” and a waste of taxpayer money. “The direct file scheme is a solution in search of a problem,” she said.

Wow, I thought that Intuit would have gone for a little more subtlety.

crazydoggers
32 replies
1d

This is why we still have the income tax system that we do. It’s a $14 billion a year industry. I’ve talked to people who work the lobbying system very hard. There’s lots of wining and dining to make sure no one messes with the complexity of the system.

We need more people who are immune to lobbying in government positions. We’ll see how this goes.. depending on the next election cycle this will either get quashed quickly, or, fingers crossed, might fight on against a growing backlash.

MenhirMike
18 replies
23h28m

Which is really the main issue. Offering a more accessible free version to file taxes is great, but the real problem is the need to file taxes at all for a lot of people. The IRS already knows the relevant info: Your employer sends W-2 information, your bank and broker are sending the various 1099 forms for interest, dividends, stock sale gains/losses, etc. Same for your spouse and kids/dependents. Don't even need to itemize in a lot of cases, since the standard deduction is preferable in many years.

Unless you're dealing with foreign income, are a business, or do a lot of contract work for cash, I don't see much reason why the IRS can't just handle all the taxes automatically - apart from the fact that some company wants to charge me $150 a year to file my taxes and making sure that my tax situation (which would fit on a beer coaster otherwise) is as complicated as possible.

usaar333
10 replies
22h45m

Unless you're dealing with foreign income, are a business, or do a lot of contract work for cash, I don't see much reason why the IRS can't just handle all the taxes automatically - apart from the fact that some company wants to charge me $150 a year to file my taxes and making sure that my tax situation (which would fit on a beer coaster otherwise) is as complicated as possible.

I imagine there are heavy software development costs, on par with what it might take to build Turbotax itself.

For instance, someone is going to have to figure out wash sales. Right now your broker does it, but you can wash sale across accounts, which requires you (or more reasonably tax software) to both detect this and track the adjusted basis in perpetuity. More complex events, like straddles, further exist, and even consumer-grade tax software won't handle it correctly.

Even implementing the tax code correctly for regular income is difficult. Examples of calculating Net investment income tax correctly due to ambiguous tax code changes (https://www.bogleheads.org/forum/viewtopic.php?f=2&t=271074&...)

CrendKing
6 replies
22h19m

I have no idea what "wash sale" is. I only heard that term when I was reading the help page in TurboTax, which I'm effectively forced to use.

Seriously, I doubt there is more than 100k people in US that have this "wash sale" any year. I'm so tired of every time someone suggests automatic tax filling, there is always one guy bring up some tax term that 99.99% people never heard of. Sure, if auto tax filling doesn't solve your wash sale calculation, feel free to go back to TurboTax. Let the other 99% people who have one job and no other complicated tax situation skip this yearly nonsense.

geraldwhen
2 replies
22h7m

Literally anyone that owns stock could generate a wash sale.

fbdab103
1 replies
18h53m

Only 15% of Americans directly own any stock[0]. Vast majority of people who do is done through a 401k or other retirement vehicle.

[0] https://usafacts.org/articles/what-percentage-of-americans-o...

ac29
0 replies
17h1m

Wash sale rules apply to mutual funds and ETFs also, not just directly holding stocks.

sseagull
1 replies
21h59m

Beware the paradox of averages. I bet a lot more than 99% of people have some wrinkle with their return.

One person has a wash sale, another has some real estate stuff, another became disabled, another has child care stuff, another has education credits, etc etc etc.

Actually now I am curious how many people file the “simplest” return (wage only, standard deduction, and absolutely no other adjustments).

ghaff
0 replies
20h53m

It’s probably less than 99% but it could be the majority in a given year.

mindslight
0 replies
2h17m

TurboTax, which I'm effectively forced to use

FWIW TurboTax is easily piratable. There are even instructions out there to crack it yourself with a .NET assembly editor.

I do my taxes in a VM without Internet access and mail in the filings, so there's no way for any information to be backhauled to Intuit or anyone else.

avrionov
1 replies
22h19m

IRS already audits at least 10% of the returns. They should have the entire tax system implemented as a software. It is madness that this part was hidden from the wide audience.

As many software projects, the internal system may not be appropriate for external use, but still they should have components very long time ago.

freeone3000
0 replies
20h44m

IRS already audits at least 10% of the returns. They should have the entire tax system implemented as a software

The audits are accomplished by a human re-doing the return with the submitted information. (As no surprise, the low-complexity returns are often chosen)

unyttigfjelltol
0 replies
22h28m

Note the proviso, taxes should be automatic "for a lot of people." Will taxes be automatic for Warren Buffet? No. For GE? No. For Suzie Q. Public? Yes.

bmoxb
2 replies
23h2m

That is how it works in many (most?) countries already - the US is an outlier in requiring every citizen to handle their own taxes.

toomuchtodo
0 replies
22h50m

A lot of US GDP is Rube Goldberg machines to skim off the economy. Intuit, Visa/Mastercard, private health insurance industry, etc. Lots of pushback to be expected as government fixes this (FedNow for payments, IRS improvements for taxes, healthcare reform, and so on). Onward.

graemep
0 replies
22h44m

It is how it works for most people in both the countries (on different continents ) I have worked in. Only people with high incomes or investment income or who are self employed or similar need to file their own taxes.

There are also cheap systems even for business returns - mine cost £12 for the company and I will use the free HMRC system for my personal return. It might be easier to use more sophisticated software, especially if your finances are complex.

Klinky
2 replies
23h17m

This is a good first step. Ideally it turns into a "verify this all looks correct & add anything we're missing" kinda thing.

whakim
0 replies
22h14m

The article says that "in one possible scenario included in the agency’s report to Congress, the I.R.S. could fill out tax returns with information it already has." We can only hope :)

0cf8612b2e1e
0 replies
23h14m

Great way to look at it. It is a significantly smaller jump once the Federal system is in place and already handling returns for millions/years.

worik
0 replies
20h34m

but the real problem is the need to file taxes at all for a lot of people.

Yes

In New Zealand where I live most people do not file at all. Tax is all "payroll tax" and sales tax

I have just joined that system myself (after several unpleasant years of not being on a payroll. Whew!

calamari4065
3 replies
23h39m

Maybe spending billions of dollars lobbying should be illegal

ttyprintk
2 replies
23h29m

It’s not that lobbying is a major slice of $14B, it’s that they actually spend only $3m and it’s effective:

https://www.opensecrets.org/federal-lobbying/clients/summary...

kemotep
1 replies
21h38m

Notoriously there is also a large contingent of anti-tax politicians and citizens that oppose making paying taxes easier. Their reasoning being the more friction there is the more likely that you will pay attention to how much you are being taxed and support their policies that cut taxes.

recursive
0 replies
19h39m

Not working. I'd pay more for a convenient tax system.

jlarocco
2 replies
23h44m

We need more people who are immune to lobbying in government positions.

What we need to do is stop pretending people like that exist, and come up with a system that works despite people's self-interest, greed and corruption.

Maybe what we have is the best we can do.

godelski
0 replies
22h3m

This is always my frustration when people suggest things for governments. You cannot design a government that relies on people being good. You have to design a government that highly discourages bad actors, make it easy to eject them, and operates while they exist. It's a crazy hard optimization problem and isn't going to work if people are just smart or good. And I never understand why people suggest fixing government by giving government more power and nothing else.

bee_rider
0 replies
23h35m

More transparency would probably be better. Make them wear NASCAR style jackets and all that.

sensanaty
1 replies
18h46m

I will never in my life comprehend how lobbying isn't just bribery with extra steps. The only distinction between bribing a cop to get out of a speeding ticket and a megacorp lobbying random politicians is that the megacorp has much deeper pockets, absolutely ridiculous

Qwertious
0 replies
10h15m

1. It's like how networking isn't cronyism

2. Politicians need to know how the businesses they're regulating work, and theoretically they gain a lot from being able to talk it over with the businesses themselves (the existing ones, mind you - not the future ones which might be stifled, and currently have $0)

3. Lobbying is another word for talking with your local politician, what megacorps do (and what basically everyone means when they say "lobbying", really) is paid lobbying, i.e. run the "lobbying" errand on your behalf. Banning the former type of lobbying is impossible, and banning the latter is hard to do when it's a legitimate service for people who have more money than time (and also might violate free speech laws, and also is hard to actually stop)

4. Fuck paid lobbying, it does more harm than good

protomolecule
1 replies
22h19m

"There’s lots of wining and dining"

You mean the congressmen are bribed by free food and alcohol? Asking as a non-American.

kirubakaran
0 replies
22h14m

This should shed some light:

Bill Gurley: "2,851 Miles" https://www.youtube.com/watch?v=F9cO3-MLHOM

LargeTomato
1 replies
23h11m

I worked at a government "lab" (MITRE) that maintained the IRS system. The system was allegedly so complicated that if the tax code and the software conflicted, the software won. The stack is legacy and intentionally on minimal life support.

nerdponx
0 replies
23h4m

intentionally on minimal life support

Key word: "intentionally".

idiotsecant
5 replies
1d

On the plus side, intuit saying something like this is exactly what I want to hear regarding a program like this. I would have been deeply suspicious if they were anything other than enthusiastically opposed to it.

vlovich123
4 replies
1d

Or they’re saying this because they know the IRS effort doesn’t have competent people on it (think what happened with the healthcare website when it launched) and is just prepping the waters for a “see we were telling you along this was a bad idea” criticism for congress people to spike it later. It’s really hard to intuit the strategy being employed so best to just ignore them altogether. And if this turns into a partisan issue at all (which an unclean launch might because people are dumb about government tech in the US), then expect the Trump administration to kill this if they win to prevent this from becoming entrenched and popular like Obamacare is.

downut
3 replies
23h47m

I've used the US Free File Federal Taxes for the last five years and it just wasn't a problem, and I have yet to see anything that looked like programmer incompetence.

Now, that said, the way you debug your submittal is to paste an entire page of error gibberish that looks like very low level database error output into an entry box they point you to. Sounds gross! Ewwwww! Well actually I've been debugging c++ templates since forever and hohum it doesn't bother me. However... every single time it decoded the problem and told me exactly what I needed to do. It has taken me 2-4 tries each year to get it debugged and then it sails right through. The final result I've fed into two different state forms and that has sailed right through too. All free, and not that much of my time.

Now if they can get the UI for normies painless, which I suspect is the main programming problem (I don't say that UI programming is trivial), this will take off like a rocket ship and the US can the join the coterie of civilized nations that do this for all their citizens.

PaulDavisThe1st
2 replies
21h44m

If you're referring to Free Fillable Forms, the error messages are not DB errors, but "business logic rules errors". They do look like gibberish, but buried inside them is a code that can generally give a pretty clue as to the error.

I agree that it would be much nicer if they said "The amount of line 29 of Form ABCD does not appear at line 18 of Form WXYZ".

Even nicer if you never had to manually transfer amounts between forms.

downut
1 replies
19h27m

Oh yes I am sorry; I didn't mean to imply that I thought that the DB was throwing an error. What the filing process email message body stated looked something like approximately "Form line xxx violates schema requirement such and such: <more gibberish>".

I was thinking when I scanned the message was that I bet I could reverse engineer the problem from this back end generated text but why not do what the instructions say and just feed it into the parser box? And every time the next email message gave me exactly the thing I needed to do. It was cool, for a weird sort of nerd.

So no, I was casting shade where the process was right in the sunlight: I made the mistake, and the business logic caught it, and told me correctly every time what I needed to do to fix it. I liked the whole process a lot.

PaulDavisThe1st
0 replies
19h19m

Yeah, me too! Been using FFF for about 8 years now.

GreedClarifies
2 replies
23h51m

From the article and from a poster below:

"For the pilot participants will have to enter their own financial information, the I.R.S. said."

It is indeed a complete waste of taxpayer money unless they actually prefill with the IRS' data.

simtel20
0 replies
23h14m

Why would you say that? If a taxpayer can copy the fields from their w-2 and have it provide a straightforward and correct filing without trying to divert them to dark patterns trying to steal money from them, that is a huge benefit.

dimal
0 replies
23h19m

Consider it an MVP.

loceng
1 replies
22h57m

Industrial complexes, all of the obvious ones, have gone too far; it only takes one to push for unfair-unreasonable terms.

The next step of citizen's countering Intuit's particular complex is for automatic tax filing to occur.

a_gnostic
0 replies
22h21m

The W2 doesn't count as voluntary, unless you bear witness against yourself, by filing for a return and identifying yourself as a taxpayer –waiving your 5A rights.

jacobyoder
0 replies
23h30m

...and Intuit knows a thing or two about "half-baked solutions". ;)

bitshiftfaced
0 replies
23h10m

Too funny. So it's a solution in search of a problem... that they also try to solve?

artursapek
0 replies
14h14m

Rest in piss Intuit

SMAAART
0 replies
23h38m

So it's an endorsement from Intuit.

RcouF1uZ4gsC
25 replies
1d

What would be awesome is if the IRS software would automatically prefill all the data and forms sent to it. It would be nice of your W-2, 1099s etc were all included and all you had to do was verify the information and enter any income not already reported.

wolfgang42
17 replies
1d

> In one possible scenario included in the agency’s report to Congress, the I.R.S. could fill out tax returns with information it already has, like data from W-2 wage statements. For the pilot, however, participants will have to enter their own financial information, the I.R.S. said.

GreedClarifies
16 replies
23h53m

So in its initial form it is indeed a complete waste of tax payers money.

Shocking.

jacobyoder
4 replies
23h44m

Absolutist takes like this never achieve much.

Yes, it could be better. But an mvp-type launch that does some things well, without trying to achieve everything on day one, would definitely not be a "complete waste". If successful, it's laying the base for the next iterations of functionality.

For a lot of folks, they have one or two W2 forms to enter, and that's it. It's really not that hard. If even a million or so folks get benefit from it to start with, that's great, and we should then build on that.

GreedClarifies
2 replies
23h29m

The IRS should play try to create an actual MVP. Create an API which allow for efile (which I assume already exists given turbotax) and create an API which allows the download whatever information the IRS has on the tax payer.

Then allow companies or open source software to create whatever value add they want on top of these APIs.

That sounds like a minimalist launch.

dimal
1 replies
23h14m

That does not sound like an MVP. Then it’s up to random chance that they create the right API format and then someone makes an app to use said API and doesn’t also use it to steal data from gullible people. You’ve multiplied the number of ways this can go wrong and reduced the chance that anyone would use it.

jacobyoder
0 replies
23h9m

You've increased the places where things can go wrong (in third party client apps) while not having any control over their quality. We'd hear "oh, IRS opened things up!", then deal with a dozen half-baked clients, and conclude "IRS sucks at something so simple!".

Agreed - public API first is the wrong place to start.

nerdponx
0 replies
22h54m

Let's also remember the context of this project. It's not just an overly-cautious MVP rollout. This project is something that has tremendous resistance against it, for stupid reasons, but the resistance exists nonetheless. Much like ACA benefits, people will only realize it's actually a good idea after they've gotten used to it. Starting small, with a minimal project that is most likely to succeed, is the best way to ensure that the project can continue at larger scale in the future.

lupusreal
3 replies
22h32m

I'm with you; if I still have to fill in the paperwork then quite literally what is the point? I'll continue paying an accountant to do this bullshit. This 'new' system is useless to me.

unethical_ban
1 replies
22h15m

You're not the only taxpayer in the country. Other people might benefit.

You have an accountant, so you're already a minority of citizens. Open your mind.

lupusreal
0 replies
20h26m

I don't want an accountant, all I want is the system other countries have where the government fills out the forms for you and all you do is sign; this is what everybody has been asking for, for years, and I'm not going to pretend otherwise. If they can't or won't give us that then there is no cause for celebration. My taxes aren't complicated but I detest paperwork and have anxiety over all of it. I don't hire an accountant for fun, I do it because I don't want to fill in the damn forms!

If I have to fill out the forms myself, then it's utterly pointless. I could already do that if that's what I wanted. Not rhetorical: what is even new about this, being able to do it without using paper and pen? Big fucking whoop, thanks for nothing IRS.

themadturk
0 replies
21h47m

You're not me. The tax situation covered by this initiative fits my needs perfectly. Fine, there's nothing wrong with you paying. Not all of us have that kind of money.

ndriscoll
2 replies
23h30m

If it gives feature parity with the existing solution, it seems fine as a start. At least we'll presumably be able to file on a .gov now instead of freefilefillableforms.com, which seems like it was chosen to be intentionally sketchy looking.

Edit: actually looks like it doesn't reach parity with the existing free e-file system and only covers the simplest cases, and "the annual cost of a direct-file system could range from $64 million to $249 million" sounds absolutely absurd to me.

actuallyalys
1 replies
22h5m

The high end estimate would be for 25 million households and would mostly go to customer service [0]. It may well be too high, but "absolutely absurd" doesn't seem fair.

[0]: https://www.irs.gov/pub/irs-pdf/p5788.pdf#page=18

ndriscoll
0 replies
20h58m

The customer support costs make that seem more reasonable (or at least I'm not familiar enough to judge), but $7M in technology costs to go from 5M to 25M users without an increase in product scope seems very steep. Like even with 100KB of data stored per user, which seems like way more than necessary, that's only 2.5 TB. So storage isn't the issue. And if everyone did their returns in the last possible hour and did 100 requests/return, that's ~700k requests/second. In actuality the load should be far lower; maybe it'd peak in the thousands. I'm not seeing why there would be any variable technology cost at that level, much less $7M.

Putting some concrete numbers on the infrastructure, for $500k you could have like 10 servers each with 60 cores and 32 TB of mirrored NVMe storage. Any one server could handle the load while being almost completely idle (i.e. you're really just buying extreme redundancy). So what are the other $6.5M for, and how is that an annual variable tech budget?

no_wizard
1 replies
23h11m

Why is it that when private institutions make software they’re suppose to “iterate fast” and quickly get an MVP out

But when a government agency is working in software, suddenly all the best practices are a “waste of tax payer money”

Seems silly

ghaff
0 replies
21h5m

Who says iterate fast is always a best practice for private companies?

calamari4065
0 replies
23h37m

"It isn't completely and totally perfect from the very first moment so it's a complete waste of time and money"

How does it feel to be the smartest person on the planet?

AlexandrB
0 replies
14h38m

So in its initial form it is indeed a complete waste of tax payers money.

Certainly no worse than the decades of fees taxpayers have been sending to Intuit and co.

gigel82
6 replies
1d

You mean like they do in ... every other country on earth?

asia92
4 replies
1d

Not canada

mig39
1 replies
23h23m

For the last couple of years, my T4, pension, RRSP, and some of my pension forms have all been imported automatically into CRA, and then into Turbotax.

So maybe it's an optional thing for some employers?

Of course, would be great to just skip the Turbotax portion.

xav0989
0 replies
20h25m

I think that all employers are now required to input the T4/remuneration information in a way that CRA can machine-process it, which allows them to make it available to third-party systems like TurboTax or SimpleTax.

But yeah, for the large majority of us, having the option to skip TurboTax and just use a pre-filled, government generated tax return would be great.

worik
0 replies
20h42m

Canada does not exist.

It is a lie by MSM

mdtusz
0 replies
23h38m

I had high hopes that SimpleTax would have been bought by the CRA, but sadly now it's been absorbed by Wealthsimple instead.

Still worth using though and is pretty straightforward and easy to use.

ack_inc
0 replies
8h53m

Not in India

ttyprintk
18 replies
23h18m

For reference, Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State and Wyoming are participating.

freedomben
17 replies
22h51m

For those who don't know, of those 12 states, only 4 actually have income taxes. The other 8 do not.

This whole system stinks. The overly complicated tax code, the sleazy corporations making tons of money on it, the entrenched politicians and bureacrats who make a living on it, etc.

hackernewds
14 replies
22h41m

We can still appreciate progress. And this is progress.

Although if the IRS is gonna audit when I under pay, they technically already know how much I owe. Why not just tell me? Reckon it's since people also over pay, and there's no refunds for doing that.

seanmcdirmid
6 replies
20h19m

So…they know very little actually. We just got a nasty tax bill from the IRS because when my wife gets an RSU grant, her company sells some stock to pay income tax for that grant. Little did I know, that generates a 1040 for the stock sale (to pay ordinary income taxes) with a cost basis of zero! Instead, you have to adjust the cost basis to the entire sale (or even more!) via supplemental information. Annoying, so I had to learn a bunch of tax rules over one day on the weekend, and in the end the amended return said the IRS owed us money.

It’s crazy stuff like this that means the IRS can’t really calculate your taxes for you.

ghaff
3 replies
19h58m

Cost basis stuff has improved over time and I haven’t had problems recently that I know of but I’m sure there are still issues.

seanmcdirmid
2 replies
19h49m

I’m surprised they can’t just the cost basis directly.

ghaff
1 replies
19h38m

In years/decades past figuring out cost basis through options and acquisitions could be a real nightmare. To be honest there have been times when I’ve thrown my hands up and just come up with a plausible average.

But as I wrote, I think things are mostly pretty good these days. But who knows with things like RSUs you have limited visibility into.

seanmcdirmid
0 replies
18h37m

We both work at big techs , so first world problem. But her company grants RSUs and sells stock to cover income tax, mine gives less stock and grants cash to cover taxes instead. Which is why I was surprised she was getting 1040s at all. But the stock is sold to cover tax, since a stock grant is taxed as ordinary income, that this generates a 1040 with a cost basis of zero is crazy.

georgeecollins
1 replies
19h40m

True, but 99.5% of Americans don't get RSUs. There are other cases like business expenses and unusual deductions, but again most people don't have those. So the IRS can probably only calculate taxes for 80% of Americans. (I'm guessing, not an expert)

PaulDavisThe1st
0 replies
19h11m

Last time I looked it up, it is indeed somewhere between 10% and 20% of individuals that file Schedule C to report business income, and thus could not be handled by an automatic IRS tax system. Good guess!

zamfi
0 replies
15h11m

An IRS audit isn’t because you underpaid the amount they think you owe — for that they usually send you a form saying, in their own special language, “hey I think you may not have included this XYZ income in your tax return, we think you owe an extra $ABC”.

Instead, it’s because they want to make sure you were truthful in what you reported, and may have some reason to believe you were not. Often, they don’t know how much you owe in this case.

wolfgang42
0 replies
20h58m

I have overpaid my taxes several times due to clerical errors, and each time the IRS sent me a letter explaining what happened and a check for the overpaid amount, plus interest. One time I forgot to deposit the check, and after waiting a year they automatically sent me a replacement along with a reminder of why it was they owed me money. My general impression is that they’re tedious and bureaucratic, but scrupulously inclined towards accuracy in both directions.

snotrockets
0 replies
16h34m

Because some people believe that if filing taxes would be easy, people won't object to paying them. There's are multiple groups, all donate a lot to certain politicains, and all are hell bent on trying to eradicate taxation.

plasmatix
0 replies
13h56m

Funny enough, a few years ago I got a ~$20 check from the IRS after they made some adjustments to my tax filing.

So not only can they do it for you, they can do it better!

kelnos
0 replies
20h41m

Reckon it's since people also over pay, and there's no refunds for doing that.

Sure there are. I've gotten refunds from the IRS when I made a mistake on my tax return and overpaid.

ghaff
0 replies
21h15m

Not at all clear the IRS won’t refund overpayments. I’ve gotten a check in the distant past when I double-paid something.

IshKebab
0 replies
20h32m

Yeah I wonder the same question about UK taxes. If you self-assess they'll still say "actually we calculated your tax and got this number so you owe us £X".

The vast majority of people don't need to file taxes but even then it somehow still comes out wrong and you occasionally get a refund.

glasshug
1 replies
22h39m

The program is for federal tax filing, not state tax. I think you may be misreading this line:

Most of those states don’t tax income at the state level, but the four that do...will guide participants to a state-supported tool that they can use to submit their state returns.

Which means it's _more_ incomplete in states with income tax (federal return through IRS pilot, state return through a state system) than in states without income tax (just federal IRS pilot return).

Izkata
0 replies
10h32m

Or put another way, it's the same as the current system. I already have to fill out federal and state in different places.

iambateman
15 replies
15h28m

Just one thing to add…

The “IRS will functionally increase taxes” argument is a distraction and I doubt anyone here takes it seriously.

But the argument matters because it has given Congress political cover to let Intuit keep leeching off the system, so a response is in order.

Congress should require the IRS to give every person an auditable receipt of every tax they paid in a standard format.

Then, truly public-minded services can use the receipt to help people understand if their filings were correct.

There’s no good reason automated IRS filing would result in tax increases for anyone, it’s a fixable problem, and good grief I’m ready to stop paying TurboTax $180/year.

remarkEon
11 replies
15h8m

I don't think it's really a distraction.

It seems illogical for the government to not have a free, easy way for the taxpayer to remit their taxes to the government (or submit the paperwork that should generate a return from that government). But at the same time I think it's fine to be skeptical that you should trust the government to be honest in showing you what amount of taxes you actually owe given how complicated the tax code is, and because there exists, ahem, a bit of an incentive problem there.

Is the free-filing system designed to maximize your return? Is it designed for ease of use? Generally I agree that TurboTax is a leech, but just because they're leeches doesn't mean there isn't an incentive problem that should be addressed.

Then, truly public-minded services can use the receipt to help people understand if their filings were correct.

Do you mean a private company does this? Or something else?

AnthonyMouse
3 replies
14h42m

Is the free-filing system designed to maximize your return?

The solution to this is for the government to publish the source code in the public domain. Then anyone who can do better can fork it and sell it, which will make that market more competitive when it's cheaper to enter because the government has already done 80% of the work, but there will only be a market for this if the government isn't maximizing your return. "Better return than the free system or your money back" would be a great way to get customers, and they'd be viable with fewer customers when they're only paying the incremental cost of doing what the government failed to.

And then the government system would be embarrassed if private forks could frequently beat them, which improves their incentives.

smsm42
1 replies
12h6m

You don't need the code even - though the code, as being already paid for by the taxpayers, should be available to them anyway - the rules are public, the data should be available to the public, so you can just reimplement the rules and see if you get the same answer. They key here to make the data a) available b) portable c) every decision the system takes be documented and having the audit trail.

AnthonyMouse
0 replies
8h26m

You do need the code because if the public system gets it right for (or is otherwise used by) 90% of the taxpayers, a private system for the remaining taxpayers would have to cover its costs with only 10% of the revenue. Releasing the code reduces their costs because they don't have to duplicate the parts the government already got right, they only have to fix what it got wrong.

"The rules" in this case is the tax code, which is thousands of pages and written in lawyer. You can imagine how converting that into computer code is a non-trivial undertaking notwithstanding that it's public information.

iambateman
0 replies
13h29m

Oh, nice, this is a fun idea. If submitting taxes were essentially an open API endpoint and the front end was an open source government-sponsored UX. Love that.

The US Digital Corps has the technical chops to do that well if the politics could work out.

To the Intuit folks reading this because your boss told you to keep an eye on the sentiment on Hacker News…don’t worry you can _totally_ have your own fork and since you’re the best you would have nothing to worry about. Since you care so much about the American tax payer, I look forward to your enthusiastic support of more transparent tax filing.

roddds
2 replies
14h0m

I'm sorry if this is stupid - I'm not American and this is entire conversation about taxes here is nuts, but:

Is the free-filing system designed to maximize your return?

Why does it need to? I mean, why do you need a tax return, if your taxes would be lower if you just got charged the right amount in the first place? And then isn't the role of society to audit their own taxes, and at the same time support candidates that vow to simplify the tax code?

remarkEon
0 replies
11h41m

To simplify what is an absurdly complicated topic, the US Tax Code gives you a lot of "breaks" for certain things. For a lot of those things, the government won't know they happened unless you tell them (and you prove it). In most cases (i.e. for regular salaried or hourly employees) your taxes are automatically deducted, and then at the beginning of the new year you basically give the government a list of things that happened that could/would/should reduce your taxable income, which results in you getting money back from the government (sometimes).

geodel
0 replies
12h37m

Well this is indeed stupid.

if you just got charged the right amount in the first place?

right amount is loaded phrase. There is big range and disagreement over what is right amount.

And then isn't the role of society ... to simplify the tax code?

It is about as intelligent as saying isn't it role of society that ensure we all live peacefully, then we don't need armies, defense budgets and so on.

MobiusHorizons
2 replies
14h20m

Do you consider it an incentive problem for cloud providers to send you a bill instead of asking you to submit what you believe you should owe? We have societally solved these problems my making them auditable. People don’t necessarily trust the bill, and have means of disputing it. If you think the government’s tool is overcharging, you are welcome to file your own taxes and deal with the possibility of getting audited.

remarkEon
1 replies
11h47m

Wait, do people not keep track of their own usage to compare it to their AWS bill? I just use free tiers for personal projects, but I guess I assumed that there would be some log reviews at some point if you were using it for running an actual business.

Anyway, I guess that means my answer is "yes".

If you think the government’s tool is overcharging, you are welcome to file your own taxes and deal with the possibility of getting audited.

"Pay what we say you owe or we'll nuke your finances with an audit". Yes this is exactly my problem.

turquoisevar
0 replies
11h29m

"Pay what we say you owe or we'll nuke your finances with an audit". Yes this is exactly my problem.

You might be misunderstanding in what an audit entails.

There’s no direct “nuking” of finances due to an audit.

In the vast majority of cases an audit is nothing more than “you claimed this on your return, can you please provide the documentation that supports it?”

More specifically, I believe most audits are about claiming child tax credit and them wanting documentation to support the claim.

If your finances get nuked that means you lied on your return, with very few exceptions.

Main exception that comes to mind is claiming expenses that are up for debate.

Also circling back to your earlier comment. Yes the tax code is needlessly complicated, Intuit et al. are the ones who caused that and are actively lobbying against simplifying it because their paid services would become obsolete if the tax code was nice and simple.

iambateman
0 replies
12h37m

Skepticism is welcome on all things government.

But most of the time our government does sketchy things away from the attention and affliction of the selectorate.

If millions of influential people were using a system, the IRS would have an extremely strong incentive to avoid negative PR through chicanery.

And we already have an incentive problem in the current setup, anyway.

rayiner
1 replies
14h9m

The IRS already provides a transcript.

iambateman
0 replies
13h27m

Nice, I didn’t realize that.

I just checked and it looks like a good start, even though I’d like it to be fully granular.

smsm42
0 replies
12h8m

I'm usually lean to the side of "keep your government paws out of the business". But taxes aren't business - it's a governmental function, and there's no reason why the government who levies the taxes can't also produce proper documentation for it and make the compliance easier. There could be corner cases where it's hard to do, fine - just do the easy 80% and let the business take care of the rest. Let the business also be able to check it and profit if they find a mistake. If you don't believe The Man did it right - you should be able to download the data and give it to the same Intuit folks and see if they can do better. It's just adding an easy option, I don't see anything wrong with that at all.

Intuit would do fine with it - yes, they'd lose some income, but they have more then enough other business, both in more complex taxes and other ways of organizing business, they don't need to be able to fleece every single taxpayer. In fact, if such IRS system is built, they'd probably will make a good buck by providing added value offerings to it, just as they do now for existing tax filing systems.

Even if the system to do that costs double to the high estimate - let's say $0.5B per year, given the government projects are always over cost - it's still about 0.15% of the taxes collected every year. There's no reason why it'd have any influence at all on the level of taxes collected.

practicemaths
14 replies
23h12m

I just file my taxes by hand and mail it in. Somewhat less concern with 3rd parties holding my information and losing it to leaks/hacks.

It is free.

A little obnoxious but the forms do have instructions/directions.

fsmv
7 replies
22h28m

I heard that this sometimes takes them much longer to process the returns that way. Has that been your experience?

One time I reproduced the forms in a spreadsheet following the instructions and it wasn't much different from doing the online wizards. I would have liked to mail it in but I just paid to e-file anyway.

practicemaths
2 replies
22h10m

My experience has been that it can be relatively faster.

That is, the last time I filed online it took I think practically a year before they got to it (I think the year of the pandemic)

I figure there's so few people filing by mail these days that they're able to process them faster than the huge amount of online filing.

I'm guessing they're separate teams (online vs mail). However I have no idea.

Regardless mailing has worked better for me the last couple years.

Additionally I do not have to use the third party ID verify thing (might just be for accessing information on irs.gov) that I am just sure is going to have a breach and can not for the life of me fathom why our government (Federal) needs a private company to verify the identity of a citizen via government (State) resources.

bombcar
0 replies
22h0m

The IRS just does some very simple checking and then mails your refund (or accepts your payment) - the actual processing/checking of the return can happen months if not years later.

LamaOfRuin
0 replies
21h16m

My understanding is that it is generally under control now, but a couple years ago their processing of paper forms was in fact so backed up that the physical space was over capacity. There was a fair amount of news coverage of this, including photos of the cafeteria in one of their processing centers being packed with paper awaiting processing because there was nowhere else to put it. At one point they also basically declared paper processing bankruptcy and just told people if they had mailed something and were still waiting for a response to just send it again because the first one was probably a lost cause.

rdiddly
0 replies
21h31m

If you're looking for a fast turnaround I would recommend filing earlier in the period -- like as far in advance of April 15th as possible, i.e. as soon as you have all your supporting materials. As you get closer to April 15th, you are non-linearly further back in the queue.

I can't really make an authoritative comparison of filing methods because I'm mostly a die-hard paper filer and have only ever e-filed maybe twice in my life at most. And it was long enough ago that I barely remember, and in fact never really cared, how fast my refund arrived. I embrace and savor the luxury of simplicity. When will my refund arrive? Answer: sound of one hand clapping. It's a reminder I put in the calendar for like, mid-June, to the effect of "Hey did I get my tax refund yet?" Usually the answer's, yep, and you dismiss the reminder. I can't be arsed (as they say in the UK) to be more interested in it than that.

ghaff
0 replies
20h58m

Honestly, I’m rarely getting enough of a refund to care; I’m more commonly writing a check.

In any case, I’m complicated enough I just outsource to an accountant. Yes it’s expensive but I’ve never had an issue even with very thick tax filings.

downut
0 replies
21h54m

Now our family unit is not cash starved and can afford to wait, so in the past, before I started using the US Free Filing system I described in another comment, I always mailed in both US and AZ income tax forms. Sometimes it took a couple of months. The US form I think was pretty prompt occasionally.

Now we're also not talking a lot of money. +- a couple of thousand, usually less. But you would have to compare apples to apples which would be the e-file fee vs. the compounded inflation rate for the time difference in receiving, presumably, your refund. I suspect it's a wash.

You need to also factor in the ${turbotax} fee and/or the accountant, as well, if you don't actually fill out the forms yourself.

Fun fact: We moved from AZ to GA last year, and dutifully filed in each state. I am pretty familiar with AZ due to filing our own taxes for most of 25 years, but GA is much more complex, verbose, and quite stupidly, even aggressively, vague.

I produced a spreadsheet for my wife to evaluate that presented my first time interpretation of the GA partial residency filing. We're both B.S. ChE, she's an MS ChE, I'm a MS App. Math. So we know our numbers. The tables were low risk, low refund, medium risk, medium refund, high risk, high refund. She chose medium risk. Fine with me.

Both AZ and GA refunded something like 50% higher than what I filed and expected.

Some sort of emoji here.

Anon4Now
0 replies
11h46m

Yes - especially for my state returns here in Oregon. I am due a refund. I received a letter stating that they made an adjustment. They still haven't sent the refund.

attentive
2 replies
14h5m

There are standalone apps like turbotax that remove 3d party leaks/hacks concerns. You can still print and mail offline.

cwbriscoe
1 replies
12h39m

Does it save the returns locally or on their servers?

attentive
0 replies
12h26m

locally, in case of TT it's optionally password protected. Also it can create pdf's with filled in forms to print.

saxonww
0 replies
19h50m

Not sure it covers the 3rd party concerns, but freefilefillableforms has been around for a decade or longer. It's fillable PDFs of the IRS forms with all the instructions available, and basic calculation abilities.

No restrictions on income, etc. but federal returns only. You get an email from them within 24 hours of whether your return was accepted or not. It's still obnoxious but for easy returns it seems better than buying turbotax or whatever people use instead.

rdiddly
0 replies
21h49m

I'd go further and say it's less obnoxious than the alternatives thus far. It has always bothered me for example, having to enter into some weird murky relationship with a private company as a third party, in my communication with the government. (That's also true for the categorically similar but unrelated outrage of a few years back where you could get a better response from some agencies by engaging them on Twitter than you could through their actual communication channels.) And say what you will, the piece of paper doesn't try to "cleverly" redirect me to some irrelevant paid service. It has no functionality. I'm the one with all the functionality. And just to amplify your point about how it's free - Yeah there's no way I'm ever paying one red goddamn cent for any of this; I'm already paying the taxes!

bschwindHN
0 replies
15h42m

I do them on paper as well. It doesn't take me too long and I hope it adds to their pain of processing it so they get along with implementing free (and good) digital solutions faster.

arbuge
10 replies
23h5m

I have a hard time understanding why the IRS doesn't at least have a basic web portal for individuals and businesses to do simple things like update addresses, send secure correspondence, check on the status of correspondence, file forms electronically, etc. A lot of paper forms and letters, human resources and time could be saved with such a system, even if it doesn't actually provide for any tax computations itself.

PopAlongKid
3 replies
21h2m

I have a hard time understanding why the IRS doesn't at least have a basic web portal for individuals and businesses to do simple things

They do have such a portal which does some of the things you list and several other things too.

https://www.irs.gov/payments/your-online-account

arbuge
1 replies
20h19m

Yes, I know about that. It has a limited subset of the functionality I mention - for individuals. Does not exist for businesses.

PopAlongKid
0 replies
19h25m

Yes, there is one for business too.

https://www.irs.gov/businesses/business-tax-account

How do we know that your list better matches the most common desired/needed features than the initial implementation by the IRS?

IRS business features:

Sole proprietors with EIN

A sole proprietor who files with an EIN can:

    View business balance due 
    View business tax records
    View select digital notices 
    Request a tax compliance check 
    View business name and address on file 
    Give account access to your employees 
    Register for clean energy credits (if eligible) 
Partners and shareholders

An individual partner or shareholder with access can:

    View business balance due 
    View business tax transcripts 
    View business name on file 
Access for more business types and roles coming soon.

rufus_foreman
0 replies
18h36m

Last time I tried to use it, they wanted me to take a selfie and send it to them in order to be able to pay estimated taxes.

eddd-ddde
2 replies
21h58m

As someone from Mexico, it's honestly insane that our system works as good as it does compared to the US.

1. All my incomes are automatically filed. 2. Each month I say "yes this is correct" on the website, and pay immediately via any bank. 3. At the end of the tax year, the system calculates if they own me money automatically, I give it my bank account and in some days I have my return.

It even handles tax deductibles and everything.

gameshot911
1 replies
21h21m

Mexico system is crazy complex and confusing.

An archaic, windows-only Java app to generate pairs of password-protected keys, which then have to be fed back into the system to declare your tax status. And they expire every so often, so you have to track down your old keys from years ago and remember the password. Confused? Just set up a SAT appointment, they'll be with you in... weeks.

Having to declare your tax categorization multiple times per year.

Facturas that companies will only generate for you for a limited amount of time, and complicated questionnaires to fill out if you DO want one so you get the right type. Assuming they'll even give you a factura at all.

I fully admit that I have an incomplete understanding of the system, this is just what I've seen my wife try to deal with. And she's the equivalent of a 1099 so her situation may be more complicated.

marisnom
0 replies
17h43m

From what I understand it's easy if you are under a salary but every other regime is complicated af. They also obligate you to get the electronic signature (FIEL) by going to their office, and like you said it takes weeks to get an appointment

refurb
0 replies
14h7m

It does. myIRS.

Unfortunately it can't do everything, but you can get your tax notices there, check filing status, refund status, get tax transcripts, etc.

nerdponx
0 replies
23h1m

The answer is a combination of industry lobbying (see elsewhere in this thread) and partisan politics that result in deliberately under-funding the IRS (for a general notion, see https://en.wikipedia.org/wiki/Starve_the_beast, and for more directly relevant events see https://www.propublica.org/article/how-the-irs-was-gutted)

jethro_tell
0 replies
22h54m

Because they are constantly under resourced so rich people can use the 'IRS sucks' line to get everyone else on board with their ability to do tax evasion.

proc0
7 replies
21h51m

They should also work with companies and have an opt-in for automatic filing since a lot of people just have one job. Not only do you have pay them a chunk of your salary but you have to also do the work to report it accurately according to a complicated system.

ghaff
6 replies
21h9m

If all you have is a modest W-2 and are taking standard deduction (most people in the US) it would be nice if the IRS pre-filled out a form. It’s also pretty simple to just fill out a 1040 in those circumstances.

PaulDavisThe1st
5 replies
19h11m

There's even a special version of the 1040 for just such circumstances.

ghaff
4 replies
19h3m

Used to be I think. I believe the EZ doesn’t exist any longer.

Basic point is that if your taxes are simple enough to just say that yep these numbers square with the few pieces of paper I received in the mail, filling out a return is maybe 30 minutes work.

PaulDavisThe1st
3 replies
18h57m

It's moronic that they got rid of that.

I would say (as someone whose taxes will never take less than several hours) that those 30 minutes are about 28 minutes too many.

wolfgang42
2 replies
15h38m

My understanding is that they replaced the 1040/1040EZ split with a simplified Form 1040+Schedules 1/2/3, so instead of getting a short form (which only applied to a limited set of situations) or a long form, you always get a shorter one, plus only the addenda needed for your situation.

hedora
0 replies
12h50m

There was a push in 2017 to make filing taxes more miserable (it was an explicit goal of Trump).

That was also the year when they intentionally broke the withholding calculations so that people end up owing a big unpredictable amount of money when they file, are more likely to be fined for it, etc.

ghaff
0 replies
11h19m

I assume one issue was that you could start filling out an EZ only to discover that there was something requiring you to start over with a 1040.

LelouBil
4 replies
14h57m

Is there any documentation on how an average person living in the US files their taxes ?

Are you forced to use third party services ?

How exactly is it hard to do your taxes on your own ?

mminer237
1 replies
13h49m

There are PDFs you can fill out yourself and either paper or e-file, but very, very do it. It's not really hard for most people. Probably 40% of people can put their wages in box 1 and be done. But most people's eyes would glaze over at seeing a 1040.

Every February everybody who paid you or got paid tax-deductibly mails you a form with the finals amounts for last year. On the back are instructions for where it goes on the forms.

The basics are simple, but few people really understand taxes at all let alone care to look at the forms. Instead probably 70% of people go to an accountant and give them the forms to punch into a program which generates the IRS forms and e-files them. Cheap places are maybe $100, but complicated returns at good accountants run like $500.

The other option most people who "do their own taxes" do is to purchase a yearly license to software which you can punch the numbers into yourself and it'll generate and e-file a return for you. It's like $50–$70 normally but some are free.

Most complications arise either from:

* You run your own business and have to do two returns basically without getting nice filled forms for all the numbers. * Congress constantly wants to incentivize behaviors and give people breaks on their taxes so there are a lot of little things you can get credits for like having kids and buying electric vehicles. It's really easy to miss deductions you're entitled to. * States have their own separate taxes, so you have to do everything twice and lots of programs have less support and make you pay extra too.

Anon4Now
0 replies
11h35m

Most complications arise either from: > You run your own business ...

Adding to this, even if you have a small side hustle with low overhead (no employees, few expenses, etc.), the labyrinthine process of filling out all the additional forms is just plain ridiculous.

alanbernstein
1 replies
13h57m

Have you ever done US federal taxes? I did my own as long as I could, but as your tax situation gets more complicated, your taxes get more time consuming.

No, nobody is "forced" to spend $60 to save hours of their free time researching tax code. If the tax system were simpler, doing it yourself would be more appealing.

LelouBil
0 replies
9m

No I live in France, but I always see talks online about how people in the US pay for software to do their taxes and didn't really understand the scope of it.

unethical_ban
2 replies
22h18m

If free e-file is so wrong then why is the IRS allowed to distribute forms to citizens with easy instructions?

How do people against free e-file justify their anger, unless they are employees of a company leeching off taxpayers' money like Intuit?

themadturk
0 replies
21h46m

I think those are the most vocal opponents.

sirsinsalot
0 replies
16h32m

Because think of the childr... Oh never mind

raybb
1 replies
22h31m

Shoutout to Code for America for getting the state filing system going in New York. That's a lot of potential.

toomuchtodo
0 replies
21h57m

Are there current or future opportunities to assist with remaining state integrations?

cpursley
1 replies
20h40m

Can we just have non-file tax system like other civilized countries? You know, like the ones that are able to provide for good roads and healthcare and housing? Often at even lower tax rates than America?

gumballindie
0 replies
19h52m

Can you name those countries? In the uk we work for the government and health care, education and roads are bust.

breadwinner
1 replies
14h47m

A better idea would be to simplify the tax code so that you don't need complex software to calculate taxes. Maybe even simplify it so much, and make it automatic, so that most people don't have to file tax returns, which is how it works in the UK [1].

[1] https://www.gov.uk/income-tax/how-you-pay-income-tax

hedora
0 replies
12h54m

One advantage of universal basic income plus a flat tax is that you get a progressive tax system, and it drastically simplifies both the tax code and welfare systems.

It also eliminates tax loopholes, and prevents people from accidentally being paid not to work, being denied bending on a technicality, etc.

VoodooJuJu
1 replies
23h11m

Will unfortunately probably have to use ID.me because an IRS decision-maker's cousin owns it.

bschwindHN
0 replies
15h58m

It's infuriating trying to log in with id.me as someone who lives outside the states. Your foreign documents keep getting denied with little reason as to why, so you have to keep uploading and trying again and again until you please whatever poor soul is mindlessly looking at pictures of documents all day.

throw7
0 replies
16h45m

The weakness is that state tax will need to be filed separately. Some type of smooth hand off with seamless data transfer is hopefully being planned. I'm in NY and interested, but I don't want to fill in data twice (yeah, i'm lazy sue me).

olliej
0 replies
22h40m

H&R Block and Intuit to begin their trial of "even bigger bribes to politicians"

niij
0 replies
1d
neycoda
0 replies
12h28m

Yay long overdue

cushpush
0 replies
7h12m

If they drag their feet on this I will create the nonprofit to do this, so hurry up.

chewmieser
0 replies
1d
barbariangrunge
0 replies
22h55m

I jest, but imagine them auditing you for entering numbers in one session and changing them later before submitting

artursapek
0 replies
14h15m

The agency's plans have met resistance from tax preparation companies??? Wow that's shocking.

arealaccount
0 replies
23h0m

Would be interested to see how the $60-250M annual price tag breaks down.

apapapa
0 replies
16h8m

Its 20 years late but its a start

andirk
0 replies
8h42m

My taxes are kind of complicated. I'm happy to do them. It's a little walk down memory road of the past year. Most people do 1040-EZ, and the "EZ" stands for "easy" because it takes 5 seconds to do. Turbotax is one of the best pieces of software I have used. I don't understand the issue.

ProcNetDev
0 replies
23h42m

opensource it, please.