[HN Gopher] Killing TurboTax
___________________________________________________________________
Killing TurboTax
Author : kunle
Score : 485 points
Date : 2021-03-03 16:26 UTC (6 hours ago)
(HTM) web link (kunle.app)
(TXT) w3m dump (kunle.app)
| api wrote:
| I gotta say I have a love-hate thing with Turbotax. I hate the
| company and its influence peddling, lobbying, and near monopoly
| status, but Turbotax itself is a very well designed product with
| a great intuitive experience that has done a great job filing
| taxes.
|
| So it's a rare case of a sleazy state-sanctioned (via refusal to
| simplify the tax code) monopoly with a decent product. Usually
| such monopolies have complete shit products because they don't
| need to care.
| breck wrote:
| TurboTax works great, until things get a little too
| complicated, and it quickly becomes terrible. What is needed is
| a strongly typed DSL where you can copy and paste your entire
| tax return as a single text document/spreadsheet.
| isaacimagine wrote:
| If all you have is a hammer...
| breck wrote:
| If all you have is binary notation...
| numbsafari wrote:
| TurboTax is so full of dark patterns to get you upsold into
| needless add-ons, I don't think you can say it really "works
| great".
|
| It's intentionally obtuse and confusing for something that
| should be simple and straightforward for 80% of the
| population.
| lancesells wrote:
| I pay for a stand-alone and the only upsell I can recall
| seeing over and over again is "audit protection" for ~$59
| or so. Is the free version filled with add-ons?
| d1zzy wrote:
| And the state efile (but since there's the "free"
| alternative to print out forms and mail in that's not a
| big deal, and it's relatively cheap anyway). I've also
| always used the desktop/standalone version, great time
| saving compared to doing it on my own.
| ortusdux wrote:
| The issue is that they are so slick that you don't even notice
| the dark patterns that funnel you into needlessly spending
| money.
| JKCalhoun wrote:
| I buy the standalone version every year. I am not sure what
| dark patterns are in that version that you are talking about.
| ortusdux wrote:
| Reply All ep 144: Dark Pattern
| https://gimletmedia.com/shows/reply-all/6nhgol
| cratermoon wrote:
| You don't notice the dark patterns because they are dark.
| Are you sure you haven't paid TurboTax for an upsell when
| they have a free or cheaper alternative they never mention?
| JKCalhoun wrote:
| Before Turbo Tax I sheepishly headed down to H&R Block and got
| reamed.
|
| Besides understanding my taxes (and taxes in general) better, I
| almost enjoy the process using Turbo Tax.
|
| If there is a better Turbo Tax product out there, it would have
| to be very compelling to get me to switch. Besides familiarity
| with Turbo Tax, it pulls in last years data and saves me the
| more tedious steps.
|
| Like you though I feel like I am locked in at this point.
| sumtechguy wrote:
| H&R has a similar desktop product. The prices are in the same
| range and the lockin feels the same. Not sure what I am
| locked into though both products never find my W2s correctly
| anyway and import my stock divs wrong.
| mattwad wrote:
| Try freetaxusa.com. Its interface is just as easy but it's
| free.
| bradstewart wrote:
| That's odd, I consistently have problems with it. It's fine if
| you add some W2s and work straight through to filing. But
| navigating back and forth through different sections never
| behaves the way I'd expect.
|
| Things like brokerage transaction imports were simply broken
| while I was trying to file last year (which, incidentally, is
| the only reason I pay for it).
|
| And their "UIs" for dealing with forms like K1s are often more
| confusing (to me at least) than the underlying IRS form.
| tallanvor wrote:
| Unfortunately TurboTax falls flat if you have a complex return.
| They "support" forms 1116 and 2555, but it's clear that they
| didn't put any real time into making sure they do the
| calculations correctly. Long story short, I got a check from
| the IRS for almost $1000 because TurboTax computed what I owed
| incorrectly.
| siliconc0w wrote:
| Hard disagree, I've had numerous problems with their app and
| they constantly try to upsell you even after extracting their
| egregious yearly fees. There has been no innovation or even
| noticeable change to their product in years.
| twox2 wrote:
| Turbotax sucks ass unless you have a simple situation with a
| w2 and maybe a couple of 1099s, beyond that it's a nightmare
| to use (for me).
| api wrote:
| Maybe I am comparing it to typical accounting software, which
| usually has shockingly bad UI/UX.
| d1zzy wrote:
| I've been using TurboTax desktop version (the Premium
| edition) for 10+ years and never ran into any issues (and I
| have relatively complex income situation) except for one bug
| they have always had about incorrectly summing up the
| mortgage loan amounts of the same loan that you refinance or
| transfer in the same year (so it ends up looking as if you
| had 2 loans that year and consequently can miss out on large
| deductions). But this is relatively easy to observe and
| workaround. Compared to spending weeks doing my own taxes (I
| did them for 3 years) it's a total bliss.
|
| I feel that a lot of people complaining about TurboTax
| upselling or anything like that are attempting to use the
| online version. I am very much opposed to giving some online
| site all my tax information so I will always keep using the
| desktop version for as long as I can. It includes 5 free
| federal e-filins and have to pay extra (about $30) for state
| filing (but can always just print out the filled forms and
| mail them in if you don't want to). And when I did the taxes
| on my own I had to print and mail them anyways.
| PascLeRasc wrote:
| Turbotax's website commits all the web sins we condemn
| regularly on here. They hijack the back button, change your
| scrolling, don't allow tab-spacebar-enter navigation, don't
| allow pasting in some fields, and load buttons on a fixed
| resolution so you can't see everything if you aren't on a hires
| monitor. It's really not a good product.
| leshow wrote:
| This discussion feels incomplete without mentioning "return-free
| filing". A lot of countries you don't even need to send a return
| because the government already has all the info you need.
|
| https://www.taxpolicycenter.org/briefing-book/what-other-cou...
| alkonaut wrote:
| I do mortage deductions etc. and I filed my taxes some years
| back by responding to a text message. "If this looks right and
| you don't want to change anything, just reply YES and you are
| done for this year", basically.
|
| In recent years it's just a smartphone app or website.
| Typically you cclick "next" 3 times to review and then submit.
|
| It's around as simple as your average online retail experience.
| adwww wrote:
| Yeah as a Brit the whole discussion above about "nobody could
| replace TT because it's so complex" missed the point by a
| country mile.
| godelski wrote:
| The fact that this isn't in the conversation has always
| surprised me. Both Regan and Obama supported it. The
| Republicans did that whole "taxes on a postcard" skit, but we
| don't even need a postcard. We're talking about TurboTax, well
| how many of you also log in and all the information is already
| there? I don't see why we can't replace the 1040 with return
| free filing, or at least the 1040Ez
| wheybags wrote:
| Something I never understood about us taxes - from reading
| discussions online, it seems like everyone needs to file taxes at
| the end of every year? Here it's only self employed, or people
| with rental or investment income. In a normal employer-employee
| relationship, the employer has to take care of it for you, they
| deduct taxes before sending the money to your account. This seems
| to be the way it works in most places, but not the us?
| ploxiln wrote:
| Employers do withhold some income for federal and state taxes,
| and for social-security and some other odds and ends.
|
| But the tax system is very complicated, with multiple tax
| brackets (income above a threshold is taxed at a higher rate),
| deductions, exemptions, exceptions, alternative-minimum, and
| more. There are deductions and exceptions for things like
| mortgage payments that go to interest (on only one residential
| property), donations to certified charities up to a limit,
| green energy incentives, travel to start a new job, who knows
| what.
|
| So, we have to settle-up with lots of complicated forms each
| year, and I've tried alternatives to Turbo Tax, but didn't have
| enough confidence with the alternative's handling of all the
| complexity, they just were noticeably worse at handling all the
| complex details. Not that I like Turbo Tax or the overall
| situation, but for me it's either Turbo Tax or pay a more
| expensive accountant.
| colejohnson66 wrote:
| Correct. Companies like Intuit lobby the government to keep
| complex tax codes so they can provide services that make it
| easy.
| astrea wrote:
| They don't lobby to make the tax code itself more complex,
| they just lobby to be the only providers of such services:
| https://www.propublica.org/article/inside-
| turbotax-20-year-f...
| mumblemumble wrote:
| It's not quite that simple. There's a lot of popular
| political support for things that make a simpler tax season
| impossible, too.
|
| For example, the existence of tax-advantaged savings vehicles
| such as IRAs and HSAs mean that the taxable portion of your
| income isn't settled until the deadline for making
| contributions for that tax year. Which is April 15. But I
| imagine there would be a lot of popular political backlash if
| Congress were to abolish IRAs in the name of sticking it to
| Intuit.
|
| There's also that whole mess of expenditures that you can
| deduct from your taxable income, which doesn't kick in until
| the total of your deductible expenses exceeds the standard
| deduction. And a lot of people were worried when the standard
| deduction got increased a few years ago. It made a lot of
| people's taxes nominally easier to calculate, but people were
| worried that it might remove an incentive for charitable
| donations, or reduce the largess that the government gives to
| homeowners relative to renters, or alter the impact of tax
| incentives for people who put solar panels on their roofs, or
| whatever.
|
| Long story short, we love to blame Intuit, and it is true
| that Intuit generally wants a nasty complicated tax code, but
| it's also true that, in the aggregate, so does America.
| a_c_s wrote:
| This is making mountains out of mole hills though: these
| types of problems can be solved without abolishing tax-
| deductible accounts.
|
| For example, one could tweak the deadline for contributions
| to those accounts to be say March 1, make the financial
| institutions report to the IRS by March 15th, send everyone
| their estimate on April 1st and have a deadline of April
| 15th to confirm or adjust their tax filing.
|
| Most of the big things that involve deductions are already
| tied to a financial institution that already report to the
| IRS.
| philjohn wrote:
| The UK has ISA's which are tax efficient savings vehicles
| and manage just fine. You only file a tax return if you
| earn over PS100k
|
| That's partly because banks send all of their information
| to HMRC.
| colejohnson66 wrote:
| Yes, but for things where all you have is a W-2, the IRS
| could easily do your taxes for you. They could send
| everyone a letter saying, "based on what we have, these are
| your numbers. If you want to change what we know, feel free
| to file yourself or with something like TurboTax." Then you
| get the best of both worlds: people with simple taxes don't
| have to deal with it, and people with complex situations
| can keep doing what they're doing.
|
| The (previous) existence of the 1040EZ showed that a _lot_
| of people have simple returns that the IRS could do for
| them.
| missedthecue wrote:
| It's not like Turbo Tax is the only thing standing between
| you and not having to do your own taxes. The entire system
| top down would need to be redesigned and the withholdings
| concept done away with. That'd be such a sweeping piece of
| legislation it will most assuredly never happen.
| nightski wrote:
| While that may be true, the reality is a lot of the
| complexity comes from deductions to handle people's "special"
| situations and needs.
| mumblemumble wrote:
| The USA has payroll deduction, but the tax code is complicated
| enough that that's only a rough estimate of what you actually
| owe. What you actually owe cannot be determined and deducted
| ahead of time, because a person's true tax obligation depends
| on information and events that may not be available until up to
| ~105 days after the end of the tax year.
|
| So, every year, you have to do a bunch of paperwork (it took me
| over 4 hours this year) to calculate your actual tax
| obligation, and then either you send the government a check or
| they send you a check to settle the difference.
| ghaff wrote:
| And/or you may be on the hook for paying estimated taxes over
| the course of the next tax year.
| MeinBlutIstBlau wrote:
| A swedish guy I go to school had to file taxes...while not
| generating any income or allowed to generate income. He almost
| got in trouble with whatever US dept handles immigrants cause
| his advisor in the foreign affairs office didn't tell him this.
| BugsJustFindMe wrote:
| The US's system of tax deductions makes it impossible for your
| employer to know how much to remove from your paycheck except
| in the simplest of scenarios. They may not know how many
| children you have or how much money your spouse makes if you
| file jointly or how much you pay in rent or whether you're a
| first-time home buyer or what your deductible medical expenses
| were for the year or whether you had education expenses and so
| on...
| jcranmer wrote:
| There is _literally_ a form you fill out for your employer to
| tell them this information so they how to much withhold from
| your paycheck: https://www.irs.gov/pub/irs-pdf/fw4.pdf
| BugsJustFindMe wrote:
| W4s are optional, have to be done in advance, and ask you
| to guess. Doing it at the end without guessing is called
| filing your tax returns.
| ghaff wrote:
| A W-4 is an input into a formula that tells the employer
| how much you want deducted. So a couple with 3 dependent
| children and a mortgage will put down more deductions than
| a childless couple with no mortgage. But it's just to get
| you in the ballpark so you don't seriously overpay or
| underpay.
| [deleted]
| d1zzy wrote:
| The employer tax withholding does not account for any other
| source of income you may have (sell stocks, rental income, make
| money on Twitch/Youtube/ebay/etc, withdrawal from tax free
| investment, interest, etc) so you may need to pay more taxes
| than they withheld and at the same time it doesn't account for
| all the possible deductions you may have that year so it may
| withhold more than you need to pay (usually that's the
| "desired" case).
|
| So at the end of each year you need to go through all the
| income sources of that year, subtract all deductions and
| compute how much actual tax you own. And pay or receive the
| difference to/from IRS.
|
| Even if you have an extremely simple income situation (only one
| wage, no other income), depending on the state you live in you
| may still qualify for deductions that the employer is not aware
| of so it can be in your advantage to do the taxes.
| mr_tristan wrote:
| Yes. And Intuit's lobbying has helped ensure that never
| changes.
|
| https://www.propublica.org/article/inside-turbotax-20-year-f...
|
| Most Americans are simply unaware that other countries have
| dramatically simplified this problem. It's amazing how many
| have magically assumed this was because this was some socialist
| concept and the immediately launch into "oh, but how much more
| in taxes are you paying? pfff."
| bobbylarrybobby wrote:
| Technically you only need to file if you owe the government
| money. If you have money deducted from your paycheck, you will
| want to file in order to get a refund, but technically you
| don't have to.
| astrea wrote:
| This is not entirely true. You have to file if your income is
| above a certain amount for your age and filing status. If you
| owe or get a refund from the federal or state government is
| entirely dependent on your tax obligation and the amount
| withheld from your paychecks throughout the year.
| atombender wrote:
| This is incorrect. You have to file a federal tax return if
| your income is above the standard deduction, and there are
| other rules [1]. Anyone can use this IRS page [2] to
| determine if they are required to file a tax return.
|
| [1] https://www.investopedia.com/ask/answers/07/taxtipfederal
| .as...
|
| [2] https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-
| return
| Muromec wrote:
| Returns. It's about returns. And taxes that are not wage-tax
| already payed at source.
| jccooper wrote:
| Employers do witholding the US. Filing at the end of the year
| is doing a calculation to determine if the withholding is
| correct and if you owe extra or are due a refund. The factors
| determining total liability aren't simple enough that paycheck
| withholding can be entirely accurate.
| jedberg wrote:
| In case you're wondering how they justify keeping the system the
| way it is, the going line is, "If you allowed auto-filing taxes,
| the government will sneak in new taxes that you'd never even know
| about!!"
|
| The other argument I've heard is, "it _should_ be painful to file
| taxes, to make people support the idea of getting rid of taxes ".
| lolsal wrote:
| TurboTax's offering is not just about literally filing my taxes.
| It's about managing risk that I'm not botching my filing in the
| form of missing something entirely, mis-filing, or leaving
| deductions on the table.
|
| Even if submitting forms online is entirely free, I'm willing to
| pay SOMETHING to make sure SOMEONE ELSE is responsible for making
| sure it goes well. I pay accountants for this for this exact
| reason. I'm sure I could figure out what boxes to copy where, but
| I'm not paying an accountant or TurboTax for copying values.
|
| edit: I did not mean this to sound like an apology for TurboTax
| being despicable for other reasons.
| projektfu wrote:
| Even CPAs aren't responsible for leaving you exposed to an
| audit, unless it was through gross incompetence, or if
| otherwise specified in a contract. TurboTax gives you some
| feeling that you have exhausted most of the straightforward
| avenues for reducing your tax liability, but offers no
| guarantees. Tax preparers are really only liable if they start
| telling their clients to do grossly illegal things on a regular
| basis, or if they do shady things to cheat them out of their
| refund. For example, receiving the refund in their own account
| and paying the client half.
| lolsal wrote:
| I completely understand what you're saying.
|
| Paying someone who is more of an expert than me is still
| better than me doing it myself.
|
| "Hey I did this in good faith and this company messed up, can
| we work this out without me going to prison?" vs "I didn't
| know."
| projektfu wrote:
| The good news is that messing up your taxes because you
| didn't know what you were doing will not land you in
| prison. The danger is that you made a bad guess that
| requires you to pay a lot of tax you thought you avoided.
| For example, you wrote off something big using Section 179
| that you shouldn't have. So your tax liability increases by
| $15,000 or something that you've already spent. Now you
| need a payment plan.
|
| Most calculation or categorization errors aren't "prima
| facie" evidence of tax fraud. In general they need to show
| intent to deceive. Most of the cases where I have seen
| someone being fraudulent they are going somewhat out of
| their way to do it. For example, not reporting cash
| receipts, just checks and credit cards. Paying their
| children as contractors even though they do not do any
| work. Recording only half of the haircuts they do and none
| of the tips. Claiming to have an unsuccessful business that
| doesn't exist yet loses money. People have to go out of
| their way to make their illegitimate books look legitimate
| and they usually fail to take into account that the IRS has
| seen it all before. Unfortunately for everyone, the IRS
| doesn't catch these things for several years if at all, so
| some get rewarded, some think they're fine when they're
| not, and some get hit by a huge tax bill.
|
| For the average person, if they make a bona fide attempt at
| doing their taxes correctly, and they make mistakes because
| they are not a seasoned tax accountant, the penalty will be
| back taxes, interest, late fees, and representation costs.
| ianlevesque wrote:
| I get what you're saying, and I use it for the same reason, but
| as far as "SOMEONE ELSE is responsible" they do a really great
| job in the ToS making sure they legally really aren't
| responsible in any way. It's a great racket.
| lolsal wrote:
| I understand (and agree that it's a racket), but even so, it
| was worth something to me even when I was filing 1040EZs.
| gugagore wrote:
| This is an honest question: what responsibility does a TurboTax
| have? How would you find out that they messed up, and how would
| you react?
| lolsal wrote:
| I don't know if I can answer that first question - it seems
| like if they position themselves as providing expert advice
| and competent filing, and then I pay for it, I should be
| guaranteed _something_. But the world does not really operate
| on SHOULDs.
|
| If I used TurboTax, I would expect to find out they messed up
| by getting some notification from the IRS, or accidentally
| discovering later that I missed a deduction. If the IRS was
| reaching out, I'd engage a real accountant ASAP. If TurboTax
| missed a deduction, I'd vote with my wallet and use an
| accountant the following year :)
|
| disclaimer: I use an accountant because my tax situation is
| complicated.
| trymas wrote:
| It's a racket. Government already knows how much you owe them.
| So how about US government, like most modern countries, send
| you a form which says: "we think you owe us xxx$ (because of
| this and that), if not - provide extra information"?
| lolsal wrote:
| > It's a racket.
|
| Yea, possibly (I agree with you). It is as much a racket as
| lots of other things. Doesn't excuse it being a racket, but
| TurboTax is not an anomaly.
|
| > Government already knows how much you owe them.
|
| This is false. If you aren't taking advantage of deductions,
| sophisticated tax-deferred vehicles for retirement or tax-
| advantaged accounts for other investments, you're giving the
| IRS more than you have to. If that doesn't bother you, that's
| fine too!
|
| > So how about US government, like most modern countries,
| send you a form which says: "we think you owe us xxx$
| (because of this and that), if not - provide extra
| information"?
|
| Cool, sounds great. However, you're over-simplifying things
| and ignoring the complicated parts. For a lot of people, a
| simple approach like the above would be totally adequate and
| I personally completely support a system like that.
| trymas wrote:
| > If you aren't taking advantage of deductions,
| sophisticated tax-deferred vehicles for retirement or tax-
| advantaged accounts for other investment, you're giving the
| IRS more than you have to.
|
| I do take advantage and do not lift a finger to achieve it,
| because the tax man knows about this already.
|
| > However, you're over-simplifying things and ignoring the
| complicated parts.
|
| IMHO, you are overcomplicating things. If tax laws are as
| complex as you wish them to be, if the tax-man cannot know
| what you owe to it - then it's just a very good environment
| for the wealthy not to pay anything, while screwing over
| other 99% with over complicating things.
|
| I do not pay taxes in the US and unless you have a company,
| I guess 99% of individuals do not need to do any taxes at
| all, i.e. just confirm what the tax agency already knows
| about them.
| lolsal wrote:
| > I do take advantage and do not lift a finger to achieve
| it, because the tax man knows about this already.
|
| I think you're mistaken. The tax man does not already
| know what charitable donations I've made, or depreciation
| I would like to claim, or ....
|
| > IMHO, you are overcomplicating things. If tax laws are
| as complex as you wish them to be, if the tax-man cannot
| know what you owe to it - then it's just a very good
| environment for the wealthy not to pay anything, while
| screwing over other 99% with over complicating things.
|
| As an aside, I do not have any wishes regarding the tax
| system one way or the other. I'm only subject to the tax
| laws, I don't really care what they are.
|
| The Tax Man(r) knows what you owe based on income that
| has been reported to it by places like your job, but only
| if your work does withholding and reports it to the IRS.
| It could report it without withholding (I think?), or you
| could be getting a 1099. If all the income from your
| 1099s is reported accurately and timely, this would be
| similar to a place that gives you a W2. This doesn't
| always happen, or there could be disputes.
|
| > I do not pay taxes in the US and unless you have a
| company, I guess 99% of individuals do not need to do any
| taxes at all, i.e. just confirm what the tax agency
| already knows about them.
|
| I doubt it's anywhere close to 99% :)
|
| Optional things that the government might not know about:
| kids, charities, investments, depreciation, rebate
| programs (like solar, cash for clunkers, etc),
| inheritance, mileage deductions, moving across state
| lines, getting divorced, getting married, becoming a
| widow, losing a child, etc. There's a ton of stuff that
| the government doesn't know about _unless you tell it_.
|
| If I make a bunch of money mowing lawns, my neighbors
| probably aren't sending me 1099s, but I really probably
| should report that income and pay taxes on it. The
| government wouldn't know about it unless I reported it
| (which is why a lot of folks don't bother reporting
| income like that, especially if it's a small enough
| amount).
|
| I'm not a tax lawyer, nor a tax expert.
| matz1 wrote:
| Then how do IRS know that the duduction is correct?
| goatcode wrote:
| They probably don't, but when something looks suspicious
| enough, in comes the audit.
| astura wrote:
| The companies that you have these accounts with, and your
| employer have reporting requirements.
| [deleted]
| PeterisP wrote:
| They don't. They request some documentation, verify some
| facts that they can correlate other sources, but mostly
| they rely on the fact that intentionally lying in the
| declarations is a crime - they can trust most reports,
| audit some, and penalize those violators they caught as a
| deterrent to make it not worth the risk to lie.
| OwlsParlay wrote:
| The US tax system is another one of those things about the US
| that looks utterly baffling to an outside observer from
| Europe. How on earth did it get into this state? How is this
| 'free'?
| [deleted]
| lolsal wrote:
| It is utterly bonkers; I wish it was different.
|
| That being said, it seems "freer" to me to tell the IRS
| what my financial situation is rather than let it dictate
| to me what I owe, and then have to fight the government in
| order to take a deduction for donating to GoodWill or the
| Salvation Army. I'm splitting hairs trying to play devil's
| advocate here.
| koboll wrote:
| Seems like a really easy first step would be for Democrats to
| pass a bill allocating money for the IRS to build a What You
| Owe API that banks and companies can access. Then every bank
| on the planet can implement a "Click to pay your taxes"
| button.
|
| Attack the problem at the source.
| jrgaston wrote:
| Seems to me that for a lot of people, maybe the majority, the
| government already has all your tax data and you shouldn't need
| to file, only accept the government's numbers. I am in the
| opposite situation, especially as I have to file in two
| countries. Not living in the US doesn't give you a pass on filing
| US taxes. I get to buy two different versions of TurboTax :-( We
| don't worry much about a US audit (some say the IRS is starved
| for funding by anti-tax politicos?) whereas in our other country
| they quickly catch even the smallest error.
| breck wrote:
| I started building my own open source US tax engine, but then
| found https://github.com/ustaxes/UsTaxes here on HN
| (https://news.ycombinator.com/item?id=26138446) and decided to
| throw my efforts with them instead. Check it out!
| dastx wrote:
| In that same thread someone mentioned OpenFisca [0], which is
| used to codify tax law. Have you considering utilising it
| instead of re-inventing the wheel?
|
| [0] https://github.com/openfisca
| pbronez wrote:
| These projects seems to come at tax policy from very
| different directions. US Taxes helps you fill out the
| specific form needed to file your taxes in the United States.
| OpenFisca helps you model a country's tax policy overall.
|
| It would certainly be interesting to connect the two, but I
| suspect that you'd do that after finishing US Taxes.
| Specifically, you could take a completed return from US Taxes
| and transform it into an input for an OpenFisca model of the
| USA tax code.
|
| As it stands, nobody has developed a USA model on OpenFisca.
| Perhaps that could be a next step, pursued in parallel with
| the US Taxes effort.
| aidangrimshaw wrote:
| Hi I am one of the maintainers for ustaxes, here is a US
| tax model in the same vein as OpenFisca
| https://github.com/PSLmodels/Tax-Calculator
| [deleted]
| ed25519FUUU wrote:
| I was just thinking that an open-source tax engine is the way
| to go in the future. I would like to see it maintained by the
| USGOV.
| ISL wrote:
| Is it possible to FOIA the IRS tax-computation code itself?
| Thrymr wrote:
| How useful is the computation code though? The computations
| themselves for the cells on a 1040 form are not that
| complicated and well documented in the instructions. The
| hard part is getting all the right numbers into the source
| boxes.
| ISL wrote:
| Somehow, the IRS compares the tax return I submit with
| what they expected. It is that entire machinery that is
| in the public interest to be visible and audited by the
| public.
| bluGill wrote:
| You can't FOIA the data they use for your taxes. They
| have your W2 data, and it was sent to you, but they won't
| give it to you.
| tacostakohashi wrote:
| Really? You can pretty much always FOIA any records about
| yourself.
|
| In the case of W-2 data, seems like you can get it as
| part of a transcript if you want it:
|
| https://www.irs.gov/individuals/transcript-types-and-
| ways-to...
|
| Of course, you also get a copy of the same W-2 directly,
| but it doesn't seem true that "they won't give it to you"
| if you ask them.
| ISL wrote:
| Agreed, but one ought to be able to FOIA the entire
| pipeline that handles the data. This is especially so
| given that the results of the pipeline are used for tax
| enforcement and litigation.
| nightski wrote:
| The IRS does have income information, but they do not
| have deduction information. Deductions are mainly where
| any form of complexity comes in. Without deductions taxes
| are super easy.
| breck wrote:
| I love this idea. Maybe someone has already done that?
| dastx wrote:
| Feels like this should be in the public domain. Any reason
| for it not to be?
| torstenvl wrote:
| Government works generally are automatically not subject
| to copyright under 17 U.S.C. SS 105, _available at_
| https://www.law.cornell.edu/uscode/text/17/105
|
| However, that doesn't necessarily mean they're public
| domain. Trademark law still applies, for example.
|
| Additionally, not everything the government uses, even
| exclusively, was produced or is owned by the government.
| Often, government contracts allow the contractor to
| retain control and ownership of the intellectual
| property. The government may also have copyright
| transferred to it and retain that copyright. A legal
| issue I haven't researched is the line between a work
| that is a government work under work-for-hire principles,
| and therefore is ineligible for copyright protection, and
| a work for which the government contracts and for which
| copyright is subsequently transferred.
|
| Before attempting to FOIA the source code of a piece of
| government-exclusive software, I would first FOIA all
| government contracts for the creation of that software.
| Then you'll have something to go on when crafting the
| FOIA request you really want.
| breck wrote:
| proper term is "imaginary property". other than that,
| like this comment.
| JustSomeNobody wrote:
| They have publications:
|
| https://www.irs.gov/e-file-providers/modernized-e-file-
| mef-u...
| bombcar wrote:
| Intuit and HR Block lobby against it every year, and the
| IRS continues to threaten to do it.
| ISL wrote:
| It is an unclassified federally-funded document -- as I
| understand things, it is therefore in the public domain.
|
| Because many eyes often make bugs shallow, there is a
| pretty good chance that a public release of the code will
| find errors that both find funds that are owed to the
| government and exonerate people who have been incorrectly
| billed.
|
| What better purpose for the American Fuzzy Lop?
| leephillips wrote:
| This can't possibly be true, in general. Work products
| produced by a contractor from a federally-funded project
| are not automatically in the public domain. Government-
| held, unclassified data can be sensitive, proprietary,
| confidential, or contain private information about
| citizens. None of this is public domain.
| dspillett wrote:
| The lobbying push from companies that would rather it
| wasn't (because it could erode their market position by
| lowering the entry bar for competitors) is stronger than
| any current push in the other direction, would be my
| guess.
| slater wrote:
| Just had a look at what the IRS has to say about open-
| source software:
|
| https://www.irs.gov/privacy-disclosure/use-of-federal-
| tax-in...
|
| lots of vague stuff, but looking at the Google result, I
| noticed some differences. Ah, the meta description of the
| page reads:
|
| _Open source software, while it can be useful in many
| instances and appear to be cost effective, may present a
| security risk because open source developers don't
| typically follow security best practices when developing
| their software._
|
| Well, there ya have it! :D
| [deleted]
| Faaak wrote:
| It'been done for french taxes (even though the online app
| is government made and free):
| https://github.com/etalab/taxe-fonciere ,
| https://github.com/etalab/taxe-habitation , and more that I
| don't remember
| namdnay wrote:
| It wasn't FOIAd, etalab is a government department
| (they've done a few cool things, there's also an
| interactive map of property transactions with surface and
| price
| xrd wrote:
| > please don't use this software to file your taxes for the
| 2020 / 2021 tax season.
|
| I wonder if there is a PR that Intuit filed to add this to
| the readme.
|
| Seriously, I wonder how much money Intuit has spent to
| terrify people into using their software. Each year, I look
| around for alternatives so I can avoid giving them money, and
| each year I find some reason to grow fearful of an IRS audit
| and go with the company that has convinced me they are less
| risky than anything else. I wonder if that is truth, or if
| I've been programmed to think that.
| michaelmior wrote:
| I've never really been fearful of an audit. I just assume
| that if I DIY, I'm likely missing out on refunds I should
| have gotten because I didn't know where to look.
| glial wrote:
| I have used TaxAct successfully for the last several years
| and they're great. (just a happy customer)
| bluGill wrote:
| I've been using TaxAct for years, but I'm not sure they
| are better. They have every incentive to lobby with
| TurboTax to make sure it is hard to file taxes without
| help.
|
| I'm tempted to go back to paper forms. It wasn't hard,
| just annoying the one time I forgot to copy line 13 of
| form 1234 to line 43d of form 5678 and then had to amend
| my state filings.
| glial wrote:
| Yeah, truthfully I would rather not have to use TaxAct
| either. Since the IRS already knows what I owe, what's
| the point of filling out forms by hand?
|
| Every year when I manually copy information from my W2
| onto an online form, I think that tax season must be the
| biggest data entry clusterfuck in the world.
| JoshTriplett wrote:
| > Since the IRS already knows what I owe, what's the
| point of filling out forms by hand?
|
| Complete agreement, though there _will_ in some cases be
| a need to file forms to supply information that they don
| 't already have. Additional deductions, for instance:
| charitable contributions, deductible expenses, etc. But
| those forms should be "here's the information", not
| "here's the information and a pile of careful
| calculations implementing an algorithm".
| StillBored wrote:
| It holds your hand a lot less than taxcut or turbotax
| though. Its basically a very thin shim on top of the IRS
| forms and instructions. Other than the electronic filing
| and a couple pretty basic hints, once you have some
| history and are vaguely aware of tax credits for various
| things, its barely easier than the IRS instructions in
| the old paper tax forms.
|
| I tend to use taxcut, which is a bit closer to turbotax,
| but frankly its messed up things that I only found by
| reading a paper copy of the return before filing and
| noticing numbers that didn't make sense (doubling values
| by adding imported values with hand entered ones, that
| kind of thing). I had problems like that with turbotax in
| the 1990's but haven't used it since the bootloader
| fiasco.
| Retric wrote:
| Most people have minimal to fear from an audit. If your
| taxes are complex enough that you're concerned then use a
| professional not TurboTax.
| natex wrote:
| I have used TurboTax pretty much my entire working life
| and never have been audited. The one time I decided to
| use a professional due to "complex" tax issues that year,
| I was audited, which became a huge pain in the ass.
| chrisseaton wrote:
| > Each year, I look around for alternatives so I can avoid
| giving them money
|
| Why not pay an accountant? Why is everyone trying to do
| their own taxes? By the time you've spent a couple of hours
| looking for alternatives... you might as well have just
| paid a professional to do it!
| breck wrote:
| > Why not pay an accountant?
|
| Complexity covers corruption.
|
| Why not just pay the nice mafia boss the protection
| money, and stop complaining?
|
| First and foremost, it's a matter of principle. It's just
| not _right_ to have the tax code written in the way it is
| written. It is written by special interests. If we all
| just said "complexity is no problem, we'll all just pay
| a small fee to accountants", not only will that "small
| fee" keep going up, but it will get more complex, and
| special interests will be better served to the detriment
| of everyone else.
|
| Pragmatically I do hire a CPA, and in general like paying
| for the high level strategic advice. But the tax
| compliance services should be unnecessary. My tax returns
| should be a single text document that I can keep in git
| and copy/paste/update each year.
| chrisseaton wrote:
| > My tax returns should be a single text document that I
| can keep in git and copy/paste/update each year.
|
| But why do you even need a tax return? Most countries
| don't need it for the vast majority of people. Why does
| the US?
| breck wrote:
| I 100% agree with you. I think it creates lots of weird
| artefacts. I really like the continuous nature of the
| crypto world and smart contracts, and think the world
| will slowly pay off the technical debt of wierd arbitrary
| schedules and move to a smoother, simple, more
| transparent system.
| lotsofpulp wrote:
| It's pretty simple to do your own taxes unless you have
| your own business and partnerships and whatnot.
|
| Spend a couple hours reading the instructions, use the
| IRS free fillable forms website, and you do it once and
| every year after it's quick and easy. Things don't change
| much year to year. If you don't understand, post a
| question a personal finance forum and someone will pipe
| in with an answer.
| StillBored wrote:
| Actually IMHO, the difficulty with any of these things
| are tracking the right metrics. Particularly for "hobby"
| style businesses. You find out at the end of the year
| trying to avoid paying a bunch of taxes on something that
| didn't really make any money, that you mixed up or failed
| to compute your vehicle mileage correctly (or whatever).
|
| So, having an accountant handling all the details, in the
| en puts the information at your fingertips that otherwise
| you have to scrape out of the box of receipts/etc. The
| tax filing parts are easy.
| d1zzy wrote:
| > It's pretty simple to do your own taxes unless you have
| your own business and partnerships and whatnot.
|
| IDK about that. As a non-resident alien for tax purposes
| for a couple of years I couldn't use any of the existing
| software (TurboTax, etc). I even tried to contact a tax
| accounting firm like HRBlock and they had no idea about
| things I needed to file that I discovered on my own
| reading the IRS publications. So I did the taxes on my
| own and every time it was the most painful thing
| happening that year (yes, that likely means I lead an
| otherwise stress-free life), it took 3 weeks at least
| spending most evenings a few hours making little progress
| on it each day. And at the end of it I never felt very
| confident about it and I likely left on the table
| possible deductions.
|
| But if there's one thing doing that helped with is
| appreciate how easy and painless is to do it as a
| resident alien with something like TurboTax (takes a few
| hours instead of weeks) and it helped me understand the
| terms and instructions of some of the more complex issues
| that you may have to deal with even with TurboTax.
| throwawayboise wrote:
| HRBlock is not a tax accounting firm. They are a service
| firm who hire people to sit in retail storefronts and key
| your info into TurboTax (or their internal equivalent).
|
| You need a real CPA with a tax focus if you have
| "complicated" taxes.
| shortstuffsushi wrote:
| > As a non-resident alien for tax purposes
|
| It seems like you are (were) a good candidate for a more
| comprehensive service for sure. Perhaps a better wording
| would have been "it's pretty simple as a resident and
| (W-2) employee," which encompasses the majority of those
| filing, and who probably don't need a service like
| TurboTax or an accountant.
| artificialLimbs wrote:
| > Spend a couple hours reading the instructions...
|
| lol bro, I'm employed and married with 2 kids.
|
| I guess that's considered a partnership.
|
| ;)
| lotsofpulp wrote:
| I used to do it myself when I was a W-2 employee, and I
| remember spending a few hours on it the first or second
| year, but after that it's pretty quick since the process
| and forms don't change much. Kids are just a couple
| credits and maybe a form for dependent care deductions.
|
| But I also had a few hours to burn. I understand
| preferring to spend that time with kids instead. But it
| is worth noting that it's a much smaller time commitment
| after the first couple years.
| mixmastamyk wrote:
| Yes, and you should understand how it works. That means
| doing it a few times. Like learning how to multiply
| _before_ using a calculator.
| chrisseaton wrote:
| > It's pretty simple to do your own taxes
|
| So why do people complain about it so much? To the point
| where they're writing their own custom software (?!) to
| do it?
| htek wrote:
| Because everyone (for certain values of everyone) has a
| niche issue that current software doesn't address or
| addresses poorly, or they just don't want to pay for
| something that the government should provide. It's their
| damn tax code, the least they could do is make it as
| simple as possible to PAY THEM MONEY.
| ghaff wrote:
| Mostly because it's an unpleasant task that can involve
| large sums of money if you put things in the wrong boxes.
| And even relatively straightforward brokerage accounts
| and second income sources start cranking up the
| complexity in a hurry.
| lotsofpulp wrote:
| I don't find that to be true about brokerages. I have 4
| different brokerages, and each one sends a well labeled
| 1099-B/DIV/INT.
|
| Non W-2 or 1099 incomes with various deductions get
| things complicated though, and I would punt that to an
| accountant.
| lotsofpulp wrote:
| I don't know. But if you've opened up the IRS free
| fillable forms website, and put up the accompanying
| instructions on your second monitor, and know how to read
| English, I don't see how it's difficult, if you're income
| is from a W-2. Everything is kind of labeled and laid out
| for you.
| ndiddy wrote:
| I believe that's only for filing a federal tax return,
| and for filing your state tax return you still have to
| either use a tax preparation website or do it on paper.
| lotsofpulp wrote:
| Many states offer online filing systems, might even be
| the majority now. You just have to visit the state's tax
| department website.
| mixmastamyk wrote:
| California has a had a wizard-style site for... I'm not
| sure a decade or so.
| everybodyknows wrote:
| Here:
|
| https://www.ftb.ca.gov/file/ways-to-
| file/online/index.html
|
| Maybe a bit of an open secret? Found with "site:ca.gov",
| halfway down the DDG page.
|
| Other little-known, useful USA services:
|
| weather.gov new.nowcoast.noaa.gov
| throwawayboise wrote:
| When I was in middle school (1980s) we did a tax return
| on paper, I think it was part of a Social Studies class?
| We were given a fictitious W2, number of dependents, etc.
| and had to fill out a 1040 and a State return (on paper
| of course, no computers then). This permanently
| demystified the process. I think a lot of people who pay
| HRBlock or similar to do their taxes have never tried to
| do their taxes manually and are just afraid to try.
|
| I have always done my taxes myself, on paper, even years
| when I had capital gains, education credits, 1099s, and
| small business (single member LLC) income. It's a bit
| time consuming but not difficult per se.
| snikeris wrote:
| The last time I tried to use a professional, he asked me
| so many questions that I haven't used one since.
| ghaff wrote:
| Mine sends me a tax planner every year. Yes, there are a
| bunch of questions up front but that's mostly to discover
| if I've had a change of status, some large transaction, a
| deduction I'm due, etc. Yes, I still have to round up my
| info but I don't need to figure out the right schedules,
| where to put the various data, etc. I get a pretty big
| sheaf of paper back.
| coldpie wrote:
| Unless you really screw up[1], or are intentionally trying
| to screw the IRS[2], you don't have to worry about an
| audit. The IRS's goal isn't to bring down their wrath upon
| you, their goal is to accurately collect the taxes they are
| due. If you pay too little, they'll ask you to pay the
| difference. If you pay too much, they'll refund it. Really:
| I once used the single-payer tax table instead of the
| filing-jointly tax table, and they sent me a nice letter
| explaining my error alongside a big check.
|
| [1] http://achewood.com/index.php?date=02102004
|
| [2] http://achewood.com/index.php?date=02272003
| numpad0 wrote:
| I wonder if someone could FOIA their audit software stack
| and put that up on GitHub and Docker Hub
| fl0wenol wrote:
| Any code authored by or for (exclusively) the government
| is default open. Usually all it takes is a FOIA request;
| if you're lucky they're publishing it on github already.
| However there are carve-outs for areas where making the
| code public could impede the law-enforcement mission of
| the entity that uses it, that is, FOIA exemption 7E.
| Since the IRS knows that if you knew how the audit
| worked*, then you'd do your taxes "just so" to avoid the
| thresholds by running the logic yourself, which is not
| something they'd want to encourage. And it would
| definitely increase their audit casework load.
|
| There's also the issue that if the code wasn't bespoke
| but also sold to non-government entities for similar
| missions (i.e. government does not hold exclusive
| rights), then it can be protected as the contractors IP.
| But for the IRS this would be rare, they are pretty
| unique and often do things their own way.
|
| * You can sort of do this without the code. The IRS is
| not allowed by legislation to base an audit decision on
| any information that is not covered by eFile, so contents
| of forms 1041QFT and 990T, or any attachments to what
| could have been an electronically submitted form, is out
| of scope. As long as what you submit in the core set of
| forms aren't statistical outliers, then you're good.
| edoceo wrote:
| Generally no. Data you get from FOIA requests is
| generally limited with what you can do with it. State
| specific laws, your use-case not withstanding
| ed25519FUUU wrote:
| FOIA results can definitely go into public domain. That's
| sort of the point.
| ska wrote:
| > That's sort of the point.
|
| It really isn't - the point is freedom access, not free
| use. Information acquired this way doesn't magically
| become public domain, it may (or may not) have other
| constraints on it.
|
| See e.g. https://www.justice.gov/oip/blog/foia-update-
| oip-guidance-co...
| EvanAnderson wrote:
| The IRS is a US federal agency, though. They can claim no
| copyright on the code. It should be be public domain.
| vharuck wrote:
| Unless it was written by a contractor who then gave the
| copyright to the IRS. This is a very common situation.
| The federal government is not barred from having
| copyrights.
| EvanAnderson wrote:
| That would be a fun legal rabbit hole to descend into.
| ohyeshedid wrote:
| I don't know about fun, but it would definitely be
| expensive.
| EvanAnderson wrote:
| "Fun" from a research perspective. (I've got friends who
| are IP lawyers and enjoy talking about this stuff.)
| Cymen wrote:
| This is my experience too. I was audited and they do send
| you a "shock" letter or at least they did in my case
| claiming I owed roughly $15,000 USD. After fixing my
| mistakes (and submitting an updated filing), they sent me
| a check for a bit more than $1,500 USD. Plus I learned
| about my mistakes so it was a win-win (as I learned with
| just enough time to not repeat the same mistake for the
| next year's taxes).
|
| I had an A+ experience being audited after my initial
| shock. They even have a secure message system where you
| can communicate via a website with the IRS including
| uploading files instead of having to mail letters back
| and forth. Definitely some clunkiness but overall it was
| solid and worked.
|
| Not sure I'd recommend the experience but I definitely
| found it nothing to fear. I also found I didn't need
| professional assistance with being audited (I did seek it
| out but due to the time of year being so close to the
| next year's tax due date, I couldn't find someone right
| then so I decided to try fixing it myself).
| jonas21 wrote:
| It sounds like you got a letter from the IRS's automated
| underreporter program. I believe these are more common
| (and less painful) than an actual audit.
| Uehreka wrote:
| IANAL, or an accountant, etc, but if I've learned
| anything from ravenously consuming Trump family news the
| past few years, it's that ignorance of the law actually
| is a defense in cases around taxes, and the IRS has to
| satisfy a standard of proving bad intent in order to
| really screw you.
|
| Again, IANAL, do your taxes, please. But it does seem
| like the system is legitimately designed with an ethos of
| just making sure taxes get collected and isn't about
| being vindictive.
| vidarh wrote:
| Having dealt with tax authorities in several countries,
| it's a recurring theme that they have no interest in
| coming down on you hard if you seem to be trying to do
| the right thing and make actual efforts at compliance, as
| they have their hands full putting actual effort into
| dealing with people actually trying to evade tax.
|
| What I always do if in doubt is to attach a letter
| setting out my assumptions. I've outright had to tell the
| tax authorities I didn't know the real numbers one year,
| because I realised shortly before filing that I'd lost
| documentation in a move, and so a whole bunch of details
| were estimates. Even that was accepted without additional
| documentation.
|
| Of course I'm sure there are countries that are worse.
| jjeaff wrote:
| There is no way that would work with the IRS. Anything
| you estimated and can't provide documentation for will
| automatically be considered void and non-existent by the
| IRS if that thing reduces your tax bill.
|
| If you think you have about $5k in valid deductions, but
| you can't provide any documentation upon an audit, then
| that $5k will be reduced to exactly $0 and you will owe
| all additional taxes plus interest and penalties.
| samstave wrote:
| >>**the taxes they are due**
|
| Please explain to me why they are *DUE* said taxes...
|
| What is the gas tax for, what is it intended to perform
|
| What is the lottery tax for, what is it intended to
| perform
|
| What is income/state taxes intended to perform
|
| Where are the metrics for what tax==intent==outcome
| results?
|
| Please - give me a detailed response.
| coldpie wrote:
| Paying for stuff like roads, highways, snowplows,
| schools, government workers, the military, that kind of
| thing. If you'd like a detailed response, you can look up
| the federal budget, and the state and city budgets
| relevant to your area.
| samstave wrote:
| Sure buddy. Let me ask you:
|
| Why are our roads so fucked up?
|
| Why are our teachers so underpaid? (Did you read the
| entire 1.9 TRILLION stimulus bill from Harris Biden? - I
| DID.
|
| Guess what they only gave $800 million toward edu
| packages which DID NOT EVEN CALL FOR OR REFERENCE TEACHER
| PAY INCREASES)
|
| Why are government workers not answering phones.
|
| Why is the military un-auditable.
|
| You are a fucking idiot.
|
| Let me tell you something,
|
| The gas tax has done nothing for actual roads.
|
| The lottery has done nothing for schools
|
| The government workers are only in it for their own
| benefits
|
| The military is NOT on your side.
|
| Your taxes are used to thwart you - not build you.
|
| If you disagree - then, please explain to me. EDUCATE me.
| on how I am wrong.
| motbob wrote:
| I agree with the basic premise that the IRS is nothing to
| be afraid of if you make a simple mistake. Though if you
| make a $5,000 error (which is getting out of "simple
| mistake" territory), they'll tack on a 20% penalty.
|
| That being said, audits are incredibly annoying if you
| _didn 't_ make a mistake, especially if children are
| involved. The Examinations department of the IRS is hard-
| headed, to say the least, and they will often make any
| excuse to deny you credits that you are actually entitled
| to. In order to get a fair hearing, you have to appeal
| the case to court. (The U.S. has made the appeal and
| court processes pretty doable even for taxpayers without
| an attorney, though.)
| ed25519FUUU wrote:
| Even besides the risk of pecuniary damage, the problem
| with an audit is that it can take a long time. It's a
| time sink for you where the best outcome is usually
| nothing different happens.
| macintux wrote:
| A long time with a lot of stress, I imagine.
| astura wrote:
| Which begs the question if they essentially already know
| how much tax they think you should owe (for most people)
| why don't they present that number to get first and let
| you either agree or disagree?
| dllthomas wrote:
| If we view it as an error checking process, it's better
| to come up with the two numbers independently. Whether
| the improvement is worth the costs, I don't know.
| simplerman wrote:
| Most people without businesses don't need to worry about
| audits. IRS, of course, still audit a small percentage of
| the most simple and honest-looking returns. But that is
| mostly for how factories spot check products to ensure
| quality, not because they suspect you did something wrong.
|
| On other hand, if you are audited, it is not a big deal as
| long as you were not intentionally defrauding IRS. My boss
| used to get audited almost every year for his business. IRS
| would ask for receipts, and once he provided those, it was
| end of story.
| snikeris wrote:
| I use this:
|
| https://www.irs.gov/e-file-providers/free-file-fillable-
| form...
|
| If you're reading Hacker News, you can probably figure it
| out.
| yaomtc wrote:
| That software looks to be worked on primarily by two people
| in their spare time, spread out over a year, with most of
| the activity happening within the last couple months if I'm
| reading this correctly. Understandable that they still
| consider it to be in an early stage, and not ready for use
| by the public.
| jrochkind1 wrote:
| And TurboTax's lobbying is why you will never see that.
|
| The ProPublica report linked in the OP:
|
| https://www.propublica.org/article/inside-
| turbotax-20-year-f...
| kmkemp wrote:
| If the government wanted to help people do taxes more easily,
| they would just simplify taxes. Lobbies (from TurbTax and
| competitors) are standing in the way.
| philjohn wrote:
| This.
|
| In the UK you can file electronically with the HMRC using
| their website. It guides you through several forms, tells
| you what numbers to input from your P60 (end of year notice
| from employer of salary and tax paid) P11D (end of year
| notice of taxable benefits) and a few other sources then
| produces a downloadable PDF copy, and submits them
| electronically.
|
| It's not for everyone, e.g. Lloyds Names can't use it, but
| for 99% of people it's fine.
|
| Why is it better in the UK? I don't think we have quite the
| level of regulatory capture, and still somewhat believe in
| public services, and spending money to make things better
| for everyone.
| 3327 wrote:
| Kill turbotax with fire and kill it again.
| rencire wrote:
| Cool to see more open software in this space. Curious to know
| if there are any plans/efforts in leveraging the work done in
| http://opentaxsolver.sourceforge.net/ to handle more use cases.
| Maybe ustaxes can be a nice frontend to some of the tax logic
| in opentaxsolver?
| savanaly wrote:
| I'm not sure I understand how monopolies acquiring their
| competitors early on in order to be able to maintain their
| monopoly price works in practice. Wouldn't the eager gaze of
| startup founders looking to strike their first big score turn
| like the Eye of Sauron on any such industry? And all the monopoly
| profits that the monopolist stands to extract would in the medium
| run hit an equilibrium of zero when balanced against the
| extractions of the people it's forced to acquire?
| clairity wrote:
| this is why it's important to build an open-source tax
| calculation engine, as @breck and others have done, so that the
| creation of tax startups are not disadvantaged (they start from
| step 19 rather than step 1). this is (fairness in) market
| competition driving the market to efficiency, the exact
| opposite of monopoly/oligarchy (e.g., turbotax, taxact & hr
| block) extracting economic rents while languishing under
| lobbied regulatory protection.
| oconnor663 wrote:
| I think you could ask a similar question about how profits work
| in practice. In a hypothetical perfectly efficient market, all
| profit margins should be zero. But in practice the world is
| full of transaction costs, imperfect information, and scarcity.
| Maybe something similar applies to reasoning about the "acquire
| your competitors" strategy. In a perfectly efficient market it
| shouldn't work, but in practice the number of startups willing
| to take this approach is limited (because the number of
| available engineers investors is limited, and in competition
| with other sectors), plus you only have bother acquiring the
| ones that manage to succeed as a company first, which is
| somewhat difficult. Maybe we should expect the "acquire your
| competitors" strategy to be partially effective, if you combine
| it with a relatively good underlying business and relatively
| high barriers to entry. Not something that necessarily always
| works, but a piece of the puzzle?
| cratermoon wrote:
| Barriers to entry.
| savanaly wrote:
| But it has been acquiring companies, as mentioned in the
| article. Why didn't those companies face a barrier to entry?
| Or if they did and it wasn't binding why is it apparently
| binding to other up and comers?
| cratermoon wrote:
| Did you read the article? None of them ever seriously
| threatened TurboTax as a whole, they were just trying to
| carve out tiny niches that weren't already under the Borg.
| They were assimilated.
| nucleogenesis wrote:
| How would an eager startup person get funded to build something
| that competes with TurboTax? How will you bring novel value to
| the industry at this point?
|
| A monopolized industry is also intentionally difficult to
| enter. It's not just about buying existing competitors it's
| about also making it as hard as possible to enter.
|
| So even when some startup manages to get funding and deploy a
| viable product, they're immediately on the radar for
| acquisition for monopolists if they weren't before going to
| production.
|
| TurboTax has also lobbied to affect US law in their favor.
| They're a scumbag organization who makes an excellent product.
| cratermoon wrote:
| It's an OK product. The interesting thing about TurboTax
| lobbying is that they oppose most attempts to simplify the
| law because the value of their product is for people who have
| tax situations that are too complex for an individual but not
| complex enough to make hiring a full-time tax accountant
| worthwhile.
| savanaly wrote:
| I just don't understand why a guaranteed payday if you're
| even modestly successful doesn't draw competition like flies.
| I would think that once you're known to be willing to pay a
| bribe to someone who threatens you even a little you would be
| bankrupted in short time.
| cratermoon wrote:
| Intuit doesn't exactly buyout direct competitors, they buy
| companies that try to move into niches that Intuit doesn't
| cover. If you tried to compete directly, they wouldn't
| spend money and time buying you out, they'd put their
| resources into other ways of bumping you out of the market.
| Lawsuits over patents are a good one, and Intuit as around
| 1600 patents.
| mikecarlton wrote:
| Don't give turbotax your money. If you want free, high-quality
| tax prep, consider Credit Karma
| (https://www.washingtonpost.com/technology/2019/03/07/when-ta...)
|
| The difference is that they're using your data to target
| financial products at you (just like any other free service). But
| they don't sell your data at least.
| briga wrote:
| You realize Intuit owns Credit Karma now, right?
| JCBird1012 wrote:
| Square owns Credit Karma Tax. Intuit was required to divest
| that part of the company as a part of the merger.
| https://www.justice.gov/opa/pr/justice-department-
| requires-d...
| brocket wrote:
| Now it's the same company unfortunately. Intuit completed their
| acquisition of Credit Karma in Dec, 2020.
|
| https://investors.intuit.com/news/news-details/2020/Intuit-C...
| sdljfjafsd wrote:
| Square owns Credit Karma Tax, not Intuit.
| JCBird1012 wrote:
| The part you're missing is that as a part of the acquisition,
| Intuit was required by the Justice Department to divest the
| "tax" portion of Credit Karma - so no, they're not the same
| company. Credit Karma, the main app, is Intuit. The tax
| portion of Credit Karma is not.
|
| https://www.justice.gov/opa/pr/justice-department-
| requires-d...
| anonu wrote:
| Why not kill TicketMaster or eBay?
|
| I actually dont mind TurboTax - they make it easy and they
| remember what happened last year. Could competition make it even
| better - sure.
|
| But where near monopolies really exist is with eBay and
| TicketMaster. Sure there are 1000s of auction sites and ticketing
| sites - but none have quite the power as these two.
| projektfu wrote:
| This sounds to me like the "invoice problem", or whatever you
| might call it. Consider business invoices. Tens of thousands of
| entities have to share the same general flavor of data, and each
| already has a system for doing it. They all have to receive and
| process that data regularly, and have their own systems, charts
| of account, item names, etc. Harmonizing all that is very
| difficult.
|
| The IRS offers standard forms but there is often more than one
| way to select them or fill them out. For example, on an 1120S,
| the accountant might place an expense in one of the standard
| categories or in a table of other expenses. But even more
| difficult, every user might have different ways of categorizing
| their income and expenses, and the people sending them forms
| might do it one way or another. Such a service would have to be
| opinionated and convince each reporting entity to adopt the
| system in place of the home-built one they're already using.
| ChrisMarshallNY wrote:
| I use an accountant. It has worked for me for many years.
|
| I'm grateful to be able to do that.
|
| On another note, I used TurboTax, like, no exaggeration, over 20
| years ago, for the last time.
|
| They kept my email, and migrated me to one of their current
| accounts, and, on a regular basis, I get spammed by them to
| "reactivate my account."
|
| The problem is that there is absolutely _no way_ to respond, and
| ask them to remove me from their spam list. They try to get me to
| log in, instead, and the login attempts are always rejected. I
| have tried to contact their support, a couple of times, and
| received auto-bot responses that are basically repeats of the
| worthless footer in the spam they send me.
|
| It's annoying. Not "jump off a cliff" annoying. More like
| "persistent mosquito" annoying.
| rafaelgarrido wrote:
| In Brazil there's a software provided by the government for tax
| reporting (free service): https://www.gov.br/receitafederal/pt-
| br/assuntos/irpf/2020/d...
| aphextron wrote:
| What exactly does everyone have against Turbotax? I use it every
| year and I love it. Sure I could save a hundred bucks and spend
| hours filling out IRS worksheets, but I don't want to. They have
| excellent UX, and serve as a reliable secure cloud repository for
| all of my financial information. What's the big deal?
| coherentpony wrote:
| I'll actually give a response that is not Turbotax specific.
|
| The forms I get every year from the ~10 banks I have accounts
| with and the ~2 companies I earned a salary from are
| essentially just copies of forms that they also had to send to
| the IRS. So in principle the IRS already has the same
| information I do when it comes to how much tax I paid and on
| what income.
|
| It is not clear to me why I have to share:
|
| - My name
|
| - My address
|
| - My _social security number_
|
| - My spouse's name
|
| - The names of my children
|
| - All their social security numbers, too
|
| - How much money I made
|
| with a for-profit company. This is information that the IRS
| already has. To me, this is totally unnecessary. I would much
| rather the government increase the IRS's budget so that they
| can implement services that provide any help I might need
| directly, rather than through a totally unrelated corporation.
| The IRS's job is to make sure you paid the tax you owed. They
| don't dictate how much tax you pay. I truly believe that with
| the right financial resources they can make it easier to make
| that payment (and correctly) for: 1) us; and 2) them.
|
| For folks with very simple tax situations, this seems like a
| no-brainer. For folks with complicated situations, you are
| still more than welcome to talk to a tax professional for
| advice. But a company _doing your taxes_ for you seems
| unnecessary.
|
| Wouldn't it be lovely if instead I went to www.irs.gov to file
| my taxes, and I was presented with a very similar interface to
| what for-profit companies are providing, but with the
| information already filled out because they already have it?
| Essentially, all I'd be doing is sanity-checking the inputs.
| d1zzy wrote:
| Don't share any of that, use the desktop/standalone version.
| toomuchtodo wrote:
| You're paying for a service that should be provided for free by
| the IRS, as happens in many other developed countries. It's
| unnecessary financial drag on the economy.
| aphextron wrote:
| >You're paying for a service that should be provided for free
| by the IRS, as happens in many other developed countries.
|
| But Turbotax is free for 1040EZ filers. It's only in an
| instance where you would otherwise just hire a tax accountant
| that they charge you. In terms of SAAS pricing, it comes out
| to like $15/month annualized. It's a bargain IMO.
| dcist wrote:
| Not true. If you have any capital markets gains, you have
| to pay TurboTax. I don't need a tax accountant to report
| simple capital gains. If you have side hustle income, you
| have to pay TurboTax. Basically, if you're reporting any
| income other than your standard day job, you have to pay.
| And TurboTax has done things like advertising free filing
| but only offering free federal filing and finding out you
| have to pay for state filing only after you've filled out
| your federal forms. It's just a scammy business that relies
| on lobbying and governmental pressure to stay afloat.
| toomuchtodo wrote:
| It's unacceptable to argue that it should be free for some,
| but not for everyone. It's not a bargain, it's unnecessary
| regulatory capture, for what my government should be
| providing at no cost to all citizens who are required to
| file returns.
|
| Private electronic tax filing systems (and the fees they
| charge) should not exist.
| germinalphrase wrote:
| > But Turbotax is free for 1040EZ filers. It's only in an
| instance where you would otherwise just hire a tax
| accountant that they charge you.
|
| This is incorrect in practice. Through dark patterns and
| otherwise, an extremely small minority filing without
| paying even if they should be "eligible" (which is itself
| an absurd position).
| Nextgrid wrote:
| I believe they also use dark patterns to direct people
| towards the paid version even if the free one would be fine
| for your needs.
| lotsofpulp wrote:
| >It's only in an instance where you would otherwise just
| hire a tax accountant that they charge you.
|
| This is false. There's no need for 90% of people to hire an
| accountant to file their state tax return, for which Intuit
| charges.
| Kalium wrote:
| > It's only in an instance where you would otherwise just
| hire a tax accountant that they charge you.
|
| This is false. It's plenty possible to be in neither
| scenario, and every year millions of Americans are.
|
| Further, the 1040EZ system no longer exists. Tax filers
| often charge for "tax accountant" services like having a
| moderate income or filing state taxes.
| germinalphrase wrote:
| The big deal is that all the functionality of TurboTax
| could/should be available for free (as is done - in some form -
| in other countries).
| aphextron wrote:
| And we all know how wonderful and easy to use government
| built software is.
| germinalphrase wrote:
| That Americans self sabotage (and ignore obvious counter
| examples) doesn't change the fact that filing taxes can and
| should be simplified and made less costly to the average
| citizen.
| germinalphrase wrote:
| Further: I rely on "government services" every day that
| are essential and delivered reliably. Even on the tech
| front - my municipal parking app is fast, free, and
| pretty much flawless.
| jounker wrote:
| Who even said it would be software. In Germany I have the
| option of letting the government do my taxes for me. At the
| end of the year I can choose to dispute the charges.
| cratermoon wrote:
| > government built software
|
| You mean like the Internet?
| mattwad wrote:
| Filing taxes should be much simpler and free for everyone, but
| they lobby the government to prevent that, among other things.
| Quick Google search result:
| https://www.propublica.org/article/inside-
| turbotax-20-year-f....
| tootie wrote:
| For one, I don't blame a company for lobbying for their
| interests. Lobbying is protected by the first amendment.
| Congress has sole authority to author and vote on legislation
| at the pleasure of the electorate. The fact that TT (and H&R
| Block) have impressed upon reps that they will participate in
| Free File, it mitigates their need to make a government-
| sponsored program. Which isn't just barricaded by simply
| force of will, but rather that the IRS would actually have to
| do it which means likely means a giant appropriation of funds
| and the risk of them screwing it up.
| lotsofpulp wrote:
| I do blame companies (and people who work at those
| companies) for spending their time trying to figure out how
| to waste as much of their fellow countryman's time and
| money as possible every year. Just like I would blame
| people for trying to get away with legally polluting
| waterways or any other public resource.
|
| >The fact that TT (and H&R Block) have impressed upon reps
| that they will participate in Free File, it mitigates their
| need to make a government-sponsored program.
|
| It's a half assed solution so they can say they did
| something and give them political cover.
| baumandm wrote:
| The issue isn't the lobbying per se, but rather that it's
| not hard to look at the situation and conclude that
| Congress is favoring the interests of TurboTax over the
| interests of their constituents.
|
| It's difficult for me to believe that my representatives
| actually believe it's in my best interest to pay TurboTax
| $100 every year, compared to having the IRS automatically
| file my taxes.
|
| On the other hard, it's easy to believe that my
| representatives have been cheaply bought with political
| donations.
| tootie wrote:
| Maybe I'm being too generous but the electorate has all
| the power over elected officials. If a candidate makes a
| big deal over free file and voters don't care, then the
| lobbyists are effectively absolved. You'd have to show me
| that Congress actually had this on their agenda and
| removed it at the behest of lobbyists to say it's really
| corruption.
|
| Unless they're actively spreading disinformation or
| corrupting the vote.
| klmadfejno wrote:
| Last year turbo tax said I could file for free. Every so often
| it asked if I wanted to upgrade to a deluxe version for $70. I
| said no. After a couple hours of filling everything out, it
| told me that my income, from one of the first steps, was too
| high so I would need to pay $70. Deeply unethical to tell me
| that at the end when they had the information necessary to do
| so at the beginning.
|
| Also, fuck them for charging $70 while lobbying for taxes to
| remain difficult to file.
| coldpie wrote:
| Because the IRS should do it for you, for free, but doesn't
| because TurboTax uses the money you pay them to sponsor
| legislation to prevent the IRS from doing that:
|
| https://www.propublica.org/article/inside-turbotax-20-year-f...
| endisneigh wrote:
| They lobby to make taxes complicated and to prevent the
| government from doing part of what you're currently paying for,
| for free.
| coldcode wrote:
| In some countries the government calculates the (simple
| compared to US) taxes and all you do is approve it. That would
| be possible here too for most people, but neither politicians
| (of various stripes) or Intuit wants anything to change. Only
| the US turns paying taxes into the equivalent of Quantum
| Mechanics.
| yoz-y wrote:
| France has a notoriously complex taxation system and yet
| somehow manages to pre-file it for almost everybody.
| dcist wrote:
| Read this ProPublica story on how TurboTax has lobbied for 20
| years to prevent people from filing for free easily:
| https://www.propublica.org/article/inside-turbotax-20-year-f...
| sgwealti wrote:
| Or the IRS could file our taxes for us for free.
| jounker wrote:
| This is the solution. We can already do this. A pilot program
| was run. The problem is that the anti tax wing of the
| Republican party and Turbotax are actively opposed.
|
| Instead of developing software, we should be writing our
| representatives.
| wwww4all wrote:
| Democrats have the entire government now, President, senate
| and the house. Democrats had filibuster proof majority when
| Obama was president.
|
| Why are you just blaming Republicans?
| kingaillas wrote:
| >Democrats had filibuster proof majority when Obama was
| president.
|
| For 2 years. And spent basically the entire time barely
| getting ACA through. Not a lot of "political capital"
| leftover for battling to have free tax filing.
| knowaveragejoe wrote:
| They only had a filibuster-proof majority for a few
| months:
|
| http://www.msnbc.com/rachel-maddow-show/fleeting-
| illusory-su...
| drewg123 wrote:
| Because of Grover Norquist and his organization (ironically
| named Americans for Tax Reform). Their "Taxpayer Protection
| Pledge" taken by most Republican lawmakers (95% before
| 2012), locks them into supporting his policies. The problem
| is that he views any attempt to simplify tax filing just
| like a tax increase (presumably since people will be less
| upset about paying their taxes), and uses his influence to
| lobby against reforms like this.
| wwww4all wrote:
| The president can simply order IRS to give taxpayers
| itemized list of taxes and income information they have
| and the taxes for the year.
|
| If the taxpayer agrees, they can just sign and get refund
| or pay additional taxes.
|
| If taxpayer disagrees, they can submit additional
| information.
|
| The Democratic president can do this right now, for this
| tax year.
| eppsilon wrote:
| Wouldn't this cost money to implement? Money that
| Congress would need to appropriate?
| specialist wrote:
| It's true that the Democratic caucuses, both federal and
| state level, are much harder to hold together. Every year
| there's a bill in my state to reign in pay day lenders.
| Basically banning usury level interest rates on loans.
| Overwhelming popular support (~80%) and editorial support.
|
| And every year there's a "blue dog" Democrat living in a
| purple district which bends to the pro pay day loan
| lobbyists.
|
| Vetocracy is a tough problem. Our civic legacy is to fear
| the mob, tyranny of the majority. (Thanks Plato.) So it's
| rare that mere popular support ( >60%) is sufficient to
| attain progress.
|
| So, to your point, mere 50% + 1 vote ain't ever enough.
| wwww4all wrote:
| Democrats had filibuster proof senators when Obama was
| president. They had way more than 50%.
|
| Why did this not happen then?
| specialist wrote:
| You'll have to ask Sen Joe Lieberman. Please share his
| answers. I'm dying to know too.
| https://en.wikipedia.org/wiki/Joe_Lieberman
| mavelikara wrote:
| Or IRS could let me know what they expect my taxes to be, and I
| could *choose* to agree to IRS's calculation, or provide my
| own.
| boring_twenties wrote:
| That's actually exactly what happened when I failed to file
| for over a year one time. They sent me all the forms
| prefilled and asked me to review them and just send them back
| if correct. Sadly, they weren't.
| rtkwe wrote:
| That's what they're system would be in essence, you'd get a
| piece of mail saying this is what you'd pay taking what we
| know and using the standard deduction. If you want you could
| calculate any itemized deductions and resumbit.
| kwhitefoot wrote:
| That's how it works here, in Norway.
| [deleted]
| twiddling wrote:
| The intent of certain lawmakers is to make sure that the filing
| and reporting of taxes is onerous as a lesson about the
| illegitimacy of government taxation.
| MikeTheGreat wrote:
| I don't suppose those lawmakers are voting to reduce their
| pay to $0, eliminating their government-provided pensions, or
| reducing the need for taxes by giving up any of their other
| benefits, are they?
|
| Otherwise, legitimate or not, that money is going to have to
| come from taxes somewhere.....
|
| Also, what does onerous have to do with legitimacy? It's like
| there's two orthogonal axes and they're trying to make taxes
| painful to convince the populace to dislike taxes, whether
| the taxation process is legitimate or not.
| dyeje wrote:
| This. You can't kill TurboTax with tech, it has to be done with
| policy. TurboTax is in this position because they lobbied their
| way to it. Any tech solution will just be further lobbied into
| oblivion.
| unixhero wrote:
| This is prevalent in Northern Europe
| jonathanlb wrote:
| They could, but IIRC Intuit and HR Block lobbied the government
| to make this an impossibility.
| motbob wrote:
| The IRS can simplify the process, sure. And if you are living
| alone, have no children, and don't care about taking advantage
| of any special credits or deductions, then a "file for me"
| button would be fine. (Though the process for those taxpayers
| is already in a good place--I filed my taxes for free in about
| 30 minutes this year.)
|
| But if you, say, have children, the IRS will not be able to
| "file for you" in any meaningful sense. Whether you are allowed
| to claim dependents on tax returns is a complicated question
| that is highly fact-specific. Happily, the IRS does not have
| cameras in my house checking to see if my children are living
| with me. I have to report that information to the IRS myself.
|
| Drive for Uber? Your taxes are also gonna be pretty
| complicated, and there's no way the IRS can do them for you.
| After all, they don't have any information on how many miles
| you drove for Uber and what other business expenses you might
| have had.
|
| Right now, the system we have is pretty good. Most people
| qualify for free filing, and free-file tools get better every
| year. At worst, there is an issue of consumer education (psst,
| you might be able to find a better/cheaper tax filing option
| than Turbotax).
| kleer001 wrote:
| > Right now, the system we have is pretty good.
|
| Not compared to other countries it isn't. Not by a long shot.
|
| Video with transcript below:
|
| https://www.pbs.org/newshour/show/dreading-taxes-
| countries-s...
|
| Get the heck out of here with your bull pucky
| motbob wrote:
| Maybe it's "bull pucky" to you, but I have vivid memories
| of my parents agonizing over taxes as a child. The agony
| they went through is much ameliorated now due to advances
| in technology.
|
| And thank you for the link, but this news segment basically
| is big on opinion, low on specifics. Feel free to link me
| to a detailed article on how non-U.S. countries handle
| self-employment or dependent tax issues and whether/how
| those things are easier elsewhere.
| RankingMember wrote:
| A task being easier than it used to be doesn't mean that
| task's process shouldn't be improved or that its
| existence shouldn't be questioned altogether as a matter
| of course.
| motbob wrote:
| True. But I think progress over the years is a better
| metric for whether things are in a good place, policy-
| wise, than "some other country does things better." So
| I'm not grumpy about the state of the U.S.'s internet
| infrastructure, but I _am_ grumpy about the state of the
| U.S. health care system (for example).
| kleer001 wrote:
| > Maybe it's "bull pucky" to you
|
| and a lot of other people too
|
| > big on opinion
|
| &
|
| > Right now, the system we have is pretty good. > I have
| vivid memories...
|
| Sounds like the whole discussion is rife with opinion.
|
| BTW, you have my sympathy, but your story doesn't shore
| up your argument. It only sounds like tax filing in the
| States has gotten better. And better locally is not best
| globally, by a long shot.
|
| In general the States has been shot through for so long
| with so much corruption (aka special interests and
| campaign contributions and lobbying) that the citizenry
| has a perversely skewed idea of what is normal. /rant
| aksss wrote:
| True that the US tax system used to be a lot worse and a
| lot more vindictive. See the hearings during the nineties
| that led to IRS reform. Horror story after horror story.
|
| But that doesn't mean it's a great system now. I would
| favor dropping exemptions and moving to a lower flat tax,
| for instance - taxes by postcard. Probably never that way
| for businesses, but for 9-5ers, it should be way more
| straight forward than it is now.
| chrisseaton wrote:
| Most importantly, most countries do it by simply having
| much higher thresholds for complicated tax rules applying
| to you.
|
| In the UK quite a few people don't pay any tax at all,
| and the vast majority don't pay enough tax to have to
| file any return.
|
| What impact does a dependent have on your tax that needs
| to make it so complicated? I have relatively complicated
| taxes due to two jobs and some unusual deductions, but
| having a child doesn't really have any impact on my tax
| return in the UK.
| bluGill wrote:
| Children are hard if the parents are separated. You get
| child support to figure out. And who gets what share of
| the tax credit is tricky as well. (This is one way for
| one parent to abuse the other - file fast and claim all
| the credits, whoever files second now has to prove the
| first did the wrong thing at their expense)
| motbob wrote:
| Well, if you are a simple family where everyone is
| biologically related and living together, then things are
| pretty simple in the end. The issues come up with mixed
| families, divorced parents, etc.
|
| As for the dollar values, if you make $30,000 and have 2
| kids, you can usually get a $6,000 tax credit or more.
| The U.S.'s support for working low-income families is
| carried out through the tax system. Put another way, tax
| credits are one of the U.S.'s most important social
| safety nets.
| mixmastamyk wrote:
| Not a problem, you enter dependents into the wizard, and
| take them out when/if they move out.
|
| No matter the situation, they accept your word for it. If
| an audit occurs you will have to prove things with
| documentation and be held liable for mistakes or fraud.
|
| It's basically a five-minute task that you appear to
| believe should make tax filing take hours?
|
| I did taxes once in NZ, you go to a website where they
| have all the data ready. Then you go next, next, finish,
| adding a deduction or dependent here and there. Takes
| 15-30 mins.
| [deleted]
| bluGill wrote:
| Taxes when you were a kid were probably a lot harder than
| they are now. There are not nearly as many deductions to
| try to figure out.
| RC_ITR wrote:
| Sure, but that would require a significant shift away from
| our current deduction-based approach.
|
| Good luck prying that out of the cold dead hands of boomers
| (and eventually Gen X)
| bluGill wrote:
| A large part of it has been. The standard deduction is
| high enough now that most people can't take advantage of
| the deduction based approach. Of course most tax people
| will tell you to save all receipts, they will happily
| charge you to look through them and calculate that they
| are not big enough to matter. If people knew how simple
| their taxes really were most people wouldn't be willing
| to pay as much for it.
| ghaff wrote:
| I've itemized the past couple of years for various
| reasons and I have some other complexities. But, yeah,
| most people--especially if they don't have a mortgage--
| are just going to take the standard deduction.
| RC_ITR wrote:
| That ignores the effect of wealth inequality in the US.
| You may not know a lot of people who itemize, but our
| elite / political class does at almost a 100% rate.
|
| So long as they want / use it, it will 'trickle down' to
| others.
|
| https://www.taxpolicycenter.org/briefing-book/what-are-
| itemi....
| jorblumesea wrote:
| Most countries have their version of the IRS "file for you"
| without any of those difficulties. Everyone reports tax
| information to the central authority which determines how
| much you owe. Even complex things like 1099-B, 1099-Div etc.
| Which is how the current system works anyways, it just
| eliminates the hassle.
|
| There's almost no scenario where the IRS cannot do this
| stuff. Think about this fact: your W-2, 1099 investments and
| most other financial information is _already reported_ to the
| IRS. They have it already. Absolutely bonkers that people
| accept anything less than just being sent a bill or check
| once a year.
|
| > Right now, the system we have is pretty good.
|
| Yeah, big disagree there. If you've ever done taxes in
| another country you will realize how idiotic taxes are in the
| US. Australia is literally, 10 minutes per year, and even
| complex things like investments, stocks...
| djrogers wrote:
| Yes, those docs are filed with the IRS, but charitable
| contributions, child status (are they dependents or not
| this year?), expenses (home office, side hustle, property
| management etc), and many other things aren't.
|
| If all your tax returns reference are the handful of items
| you mention, your tax return can be done in a matter of
| minutes on a short form.
|
| Yes, it could be better, but it's a fantasy to think it
| should be as simple as getting a bill from the IRS at the
| end of the year.
| jorblumesea wrote:
| These are easily done and in other countries, are fairly
| simple. Sure it turns your 10 minute tax affair into a 25
| minute one. Declaring child status is just a simple form
| box. Declaring "side hustle" money is a similar affair.
| Charitable contributions just register with the IRS
| instead of it going directly to you like a 1099 or W2.
|
| It's still a far cry from the "entire Saturday morning"
| affair, even using online tax software.
| ghaff wrote:
| >Most people qualify for free filing
|
| For that matter, _everyone_ qualifies for free filing--
| although in practice it gets too complicated for most past
| some point. I know it sounds like something savages would do
| but it 's actually possible to just fill out the forms by
| hand if your taxes are fairly simple.
|
| I use an accountant who I've been using for years but if you
| just have a W-2, a 1099 or two, and just use the standard
| deduction, it'ls likely pretty simple to just fill out a 1040
| form and a state tax form.
| runako wrote:
| I came here to write something along these lines. For the
| simplest cases, filing is free and really easy now. Everyone
| who needs TurboTax now would need something roughly as
| complicated until our entire tax regime is overhauled.
|
| Adding to the types of really common situations where you do
| have to provide context the IRS doesn't already have:
|
| - side-hustle contracting (IRS doesn't know what expenditures
| are for the business)
|
| - stock sales (your broker may not know your basis)
|
| - home improvements eligible for tax deductions
|
| - sold a home (IRS won't know your basis or selling price)
|
| - did you move for a job? IRS won't know whether you are
| eligible for tax deductions.
|
| - crypto gains/losses
|
| - inheritances (basis again)
|
| I'm curious whether other countries have simpler tax codes
| that permit simpler filing?
| realityking wrote:
| Adding a perspective from Germany, where the tax code is
| definitely not simple, a major difference I see is that
| filing is optional for the simple cases because you can
| only ever get money back. There are some default
| deductibles already applied to your payroll tax so the tax
| office doesn't have to deal with super small cases. The big
| advantage is that Joe Average won't risk getting into a lot
| of trouble for not filing.
|
| Just to illustrate, let's go through your examples and how
| it'd work in Germany:
|
| > side-hustle contracting (IRS doesn't know what
| expenditures are for the business)
|
| You'll have to mandatory file income taxes since the income
| from contracting is not salary and there are no payroll
| taxes deducted from it. Not sure how common it is in the US
| but in Germany the vast majority of people don't have side
| hustles like this (for a variety of reasons; certainly a
| bad thing)
|
| > stock sales (your broker may not know your basis)
|
| There's a default tax rate on capital gains (25%) with a
| 800EUR allowance. You assign how you want to split the
| allowance between your various banks and other capital
| gains generating accounts (you're responsibility to not
| exceed them) and the banks will report your cap gains with
| your tax ID to the tax office. If you did pay taxes it's
| often worth filing to make sure the allowance evens out.
| Also, if you want to carry forward a loss you have to file
| (but you got 5 years to do so)
|
| > home improvements eligible for tax deductions
|
| You'll probably want to file but you don't _have to_. You
| just won't get the deduction.
|
| > sold a home (IRS won't know your basis or selling price)
|
| If it was the home you lived in, you don't have to file
| (it's tax free). If it was a house you rented you'll have
| to file but you'll have to do that anyway for the rental
| income.
|
| > did you move for a job? IRS won't know whether you are
| eligible for tax deductions.
|
| Same as with the other deductions, it's in your best
| interest to file but you don't have to. No (legal)
| consequences if you don't.
|
| > crypto gains/losses
|
| This gets tricky but if you owned the coins for more than a
| year (to the day) they're tax free and you don't have to
| report them. But you better have documentation on this if
| you ever get audited.
|
| > inheritances (basis again)
|
| This one is actually interesting as it's a completely
| separate tax and thus separate process from income tax.
| There's an allowance based on your relationship to the
| deceased (500kEUR for spouses, 400kEUR for children, etc.),
| if the inheritance exceeds that you'll get a letter from
| the tax office asking you to file a declaration for
| inheritance tax. At that point there's not much software
| that'll help you and you'll better hire a tax advisor :)
| runako wrote:
| Really educational comparison!
|
| It seems the major difference derives from our (American)
| punitive approach to those who use our meager social
| safety net.
|
| For example a large swath of Americans earn an income
| that entitles them to assistance in the form of the
| Earned Income Tax Credit (EITC). This is (roughly, it
| depends) available to people who earn < 85% of the median
| income. But they have to file taxes to get the money they
| are owed (because we hate the poor in America and this
| will dissuade them from getting their money). So that's
| going to be a large set of the country that has to apply
| or leave money on the table.
|
| For a large set in the middle class, you have to file
| because you leave money on the table by not claiming
| deductions.
|
| So even if we weren't all more or less required by law to
| file, we would mostly have a financial incentives to file
| anyway.
|
| Oh and anecdotally, side-hustles and second jobs are very
| common in the US. Poor social safety net, no employment
| contracts, very low minimum wage, high healthcare costs
| all doom most Americans to perpetually precarious
| financial circumstances. So everybody is trying to get a
| little more so they don't get wiped out.
| ghaff wrote:
| >- stock sales (your broker may not know your basis)
|
| This used to be a real nightmare especially when there were
| acquisitions in stock, splits, etc. There were a couple
| times over the years when I just said F' it and put down a
| reasonable number.
|
| But these days, unless you have some pretty old
| investments, the brokerages generally track your basis.
| runako wrote:
| > the brokerages generally track your basis.
|
| Yes, but IIRC if you transfer investments between brokers
| you are back to tracking basis yourself (if you're lucky,
| the new broker will allow you to enter the basis after
| the transfer).
|
| But agree in the general case that it's not a problem for
| younger people. (Gen X and older may indeed have some of
| those pretty old investments lurking in their
| portfolios.)
| ghaff wrote:
| That's not universally the case at least. I transferred
| some shares a month or so ago (in a horribly manual
| process I might add) and the cost basis was transferred
| over.
|
| I fall into the older bucket but I guess my old 401(K)
| must have had basis added when it merged with an IRA and
| none of my other investments lack basis information.
| namdnay wrote:
| I don't understand the argument. You go from stating that in
| some cases, the ziRS can't prefill your taxes correctly -
| sure, we all agree here, that's the same in every other
| country. And then you go on to say that's why you need
| TurboTax. Huh? Why not just have the same input boxes as
| TurboTax, but on irs.gov? That's what pretty much every other
| developed country has
| chrisseaton wrote:
| If you think the IRS aren't able to work out how much tax you
| need to pay... how do you think they're catching people who
| don't pay enough tax? They must already know!
| compiler-guy wrote:
| They don't already know. Sometimes they have suspicions,
| and then perform an audit, or request more information
| about a particular detail, by which they get the
| information they might need.
|
| Only then do they actually know.
|
| For example, you yourself may have filed with the status,
| "Married, filing separately", but the other person in your
| relationship may have filed with the status, "Single".
|
| The IRS has no idea who is right without actually talking
| to the two of you. And because they don't know which status
| is correct, they don't know how much each of you owe.
| mixmastamyk wrote:
| They do know almost everything and learning more every
| day. Of course there are extenuating circumstances, which
| you will list and have to prove if a question comes up.
| This is not an excuse for tax filing being more difficult
| than it needs to be.
| Finnucane wrote:
| Turbotax et al. lobby heavily to prevent this. Given that much
| of the relevant information--W2s, 1099s, etc., are already
| reported, you'd think that this would be easier for a very
| large percentage of taxpayers. But it would effectively kill
| TurboTax's business.
| iamjake648 wrote:
| And that would be a good thing
| nicoburns wrote:
| Couldn't the legislators just... not do what the lobbyists
| want? Are they really all that corrupt?
| grecy wrote:
| You can't actually use the word "corrupt" to describe what
| the legislators are doing, that's painting them unfairly.
|
| All they're doing is lining their own pockets with millions
| from TurboTax et. al to make sure laws are favourable for
| those big companies. But because it's perfectly legal, and
| there are no thugs with guns or drugs or "bad members of
| society", it's absolutely _not_ corruption.
|
| /s
| anonymousab wrote:
| Absolutely. And with the tax companies, it turns out that
| it's very cheap to corrupt a US congressperson.
| dominotw wrote:
| what the going price? do you know?
| goatcode wrote:
| Bout 3.50
| craigkilgo wrote:
| ha
| minkzilla wrote:
| Yes. They really are. Here is just some over the table
| stuff:
| https://www.motherjones.com/politics/2010/10/congress-
| corpor...
| specialist wrote:
| Legislators are basically doing triage, responding to
| perceived consensus. Kinda like a product manager. Think
| attention economy. There's 10,000s of bills filed every
| year. No one has the resources or bandwidth to handle that.
|
| Any given legislator has 1 maybe 2 issues that they care
| about, for which they will advocate an agenda. The rest,
| they rely on what they're hearing.
|
| Intuit's lobbying effectively drowns out alternative view
| points. Assuming that anyone anywhere is consistently
| advocating for something like free auto-filing.
|
| Source: Have lobbied. Know legislators and their staff.
| Also read many books about legislation. Most legislators
| would LOVE to hear from their constituents; will bounce out
| pro lobbyists to give their own people an audience.
| Dirlewanger wrote:
| >Most legislators would LOVE to hear from their
| constituents
|
| Yeah, I'm sure that desire to hear from them is only up
| to a point, at which they love the lobbying dollars more.
| sib wrote:
| The economist's answer:
|
| If that were so, there wouldn't be so much money spent on
| lobbyists by companies.
|
| I guess there's a reason they call it "the dismal science."
| willhinsa wrote:
| when something doesn't provide a reliable return on
| investment, they stop spending that money. that's how
| much you know something works, whether it's buying
| advertising or congressmen.
| cratermoon wrote:
| With the caveat that the ability to measure ROI exists
| and is also reliable. See for example advertising, and
| especially online programmatic targeted advertising:
| https://hbr.org/2013/03/did-ebay-just-prove-that-paid
| Finnucane wrote:
| They can ignore the lobbyists, but they like the money, and
| they like not having to campaign against the lobbyist's
| marketing. Enough to make it difficult to pass reforms.
| jeegsy wrote:
| Does anyone have any idea what these lobbyists actually say?
| What excuse (however lame) that they actually give for
| blocking simplification etc?
| angott wrote:
| They usually claim that if people didn't have to file their
| own taxes, they would not be aware of how much they are
| getting taxed. In their view, this would eventually make it
| very easy for the government to increase taxes without
| significant protests from the public.
| corytheboyd wrote:
| An Australian friend of mine showed me his tax receipt once and
| it made me yearn for this. It's ridiculous what the US has
| created for its citizens, or rather not created.
| Biganon wrote:
| I don't know where this idea came from (I've seen it on reddit
| a LOT), but it's the same here in Switzerland: you do it
| yourself because the tax department has no idea how much you
| made precisely, what you can deduce from it (expenses you had
| to do in order to acquire your income), etc. It just makes more
| sense to have everyone manage their own taxes.
| lotsofpulp wrote:
| The government automatically doing it doesn't preclude from
| letting taxpayers be able to amend it. The vast majority of
| people have simple tax returns, and all that information is
| already electronically flying around with unique identifiers
| (social security number).
|
| It's trivial for government to be able to automatically
| produce a tax return that's basically almost all done for
| everyone.
| lifthrasiir wrote:
| This is exactly how South Korea does the taxation.
| Employeers are required to report employees' incomes and
| also deduct the tentative tax. The final tax is set by the
| year-end settlement where you can put documents for income
| deduction and tax credit to the National Tax Service.
| Common documents (e.g. credit card expenses count towards
| income deduction) are electronically available in one place
| and it is not very hard to get hold of other documents if
| you are an employee. In the end you pay or get the delta
| between the tentative tax and the settled tax.
| Kalium wrote:
| The IRS already has most of your income information and much
| of your deduction information. They already use this to
| validate if your return makes sense.
|
| In effect, the IRS already does most of a taxpayer's
| paperwork. Since they do this, it might be nice to provide it
| to taxpayers for review and correction, rather than making us
| all start from zero each time.
| GCA10 wrote:
| Depends how intricate your taxes are. Perhaps 30 million
| people file Schedule C, which covers freelance income, gig
| income, etc.
|
| The IRS will (mostly) know your gross income, but it won't
| know the exact details about claimable deductions such as
| business travel, business meals, supplies, etc.
|
| The only way it could know that would be to peer inside
| your credit-card statements, bank statements, etc. and make
| judgments about what was work related and what wasn't.
|
| I'd rather do the tallying myself -- which is a chore --
| rather than have IRS software make guesses that are a)
| awfully nosy and b) bound to disadvantage me.
| aksss wrote:
| The IRS doesn't have your deductions, but at the same time
| most people don't have enough to itemize anyway, especially
| since Trump increased the standard deduction for
| individuals and families.
|
| I think simplifying the tax code first requires trading in
| our deduction system for a flat tax or lower taxes across
| the board. Then you could get to a simple postcard bill
| every year. Too many special interests to let that happen
| though.
| djrogers wrote:
| > and much of your deduction information
|
| No, no they don't. At most they have your mortgage interest
| deduction - side hustle expenses, charitable contributions,
| etc. are not reported to the IRS automatically.
| specialist wrote:
| The higher cost of administration is the part that makes me
| bug-eyed.
|
| Auto-filing and simplification would be so much cheaper.
| Kalium wrote:
| The IRS already has a web portal that lets you retrieve
| your data. This could be executed by adding more info to
| that. The higher cost of administration on that shouldn't
| make anyone bug-eyed, no matter how _wonderful_ your idea
| of auto-filing and simplification is.
| gambiting wrote:
| In the UK vast majority of people don't do their own taxes.
| Your employer pays the tax on your behalf directly from your
| salary and updates the tax office as to how much you make. In
| turn, the tax office tells your employer how much tax to pay
| from your salary, without any input required from yourself.
|
| In fact most people I work with don't even know there is such
| a thing as a tax deadline every year or anything like that,
| because....why would they? if you are a normal full time
| employee there is absolutely no need to file your own taxes.
| HMRC has all the information it needs to tax you year on
| year.
|
| >>what you can deduce from it (expenses you had to do in
| order to acquire your income)
|
| Well, at least here in UK there's practically nothing you can
| deduct from your taxes if you are a "regular" full time
| worker, so that solves that issue.
| viklove wrote:
| > Your employer pays the tax on your behalf directly from
| your salary and updates the tax office as to how much you
| make. In turn, the tax office tells your employer how much
| tax to pay from your salary, without any input required
| from yourself.
|
| Same thing happens in the US. When most people file their
| taxes here, they get money _back_ because they already
| overpaid.
|
| For example I spent a few thousand trying to launch a
| business this year, and that is all tax deductible. So I'll
| file that with my tax form that my employer sends me (with
| the salary info prefilled), and I'll end up getting some
| money back because my taxable income is lower than what the
| gov't expected.
| namdnay wrote:
| From what I remember in Switzerland, the forms were
| prefilled, just like neighboring countries. Your salary was
| automatically takes from your employer, any declared children
| are carried over year to year etc. Then all you have to do is
| correct and add any complex stuff
| kraig wrote:
| yes, because i want someone in the irs to evaluate all of my
| deductions and donations
| elicash wrote:
| This isn't how most file.
|
| Also, the way it works is that you still have the option of
| doing it yourself. But by default, done for you.
| baumandm wrote:
| That's like saying someone in Google is analyzing your web
| searches in order to show you ads.
| ghaff wrote:
| They'd just assume you want to take the standard deduction--
| which isn't a bad assumption for a lot of people these days.
|
| My taxes are admittedly at least somewhat complex but, even
| if I did them myself, I'm not sure how much effort it would
| save if I had to do a bunch of additions and corrections.
| Pre-filling would mostly be useful if you could just check
| your W2, maybe a 1099, some things like dependents, sign it,
| and file it.
| rtkwe wrote:
| The usual proposed method would be the IRS calculates what
| you owe based on the standard deduction because they don't
| know about most donations or possible deductions.
| RankingMember wrote:
| They're already doing that
| depingus wrote:
| Use this IRS tool to find which service lets you free file.
| https://apps.irs.gov/app/freeFile/
| Thrymr wrote:
| That link is only for people who earn <$72,000 / year. Everyone
| can use https://www.irs.gov/e-file-providers/free-file-
| fillable-form..., though.
| chrisseaton wrote:
| Are accountants prohibitively expensive in the US? I don't use
| any tax software myself in the UK - I just pay an accountant $250
| once a year and he does it for me (using some software I
| presume.) It's not really on my radar as things worth trying to
| automate or use software myself for, let alone building my own
| software! I'd have to be able to do it in just a few hours to be
| cost effective.
| lotsofpulp wrote:
| You also have to trust the accountant, and the accountant is
| not liable at the end of the day anyway.
|
| If you are a W-2 employee, even with having to file a Sch
| 1/2/3/B/D/etc, it shouldn't take more than a couple hours. And
| you get to know you did it right.
|
| Of course, if you don't enjoy reading tax instructions, I
| highly recommend parting with a couple hundred dollars and
| letting someone else do it.
| kingaillas wrote:
| That's about what those franchise tax prep companies charge
| (Liberty Tax, Jackson Hewitt, etc).
|
| I found out my parents used one of these places last year, and
| they charged them about $350 for a SIMPLE tax return. It looked
| like the goal was to charge about $50 less than the eventual
| refund, and also push the "get your refund right now!!" scam
| (i.e. take a high interest loan for the refund amount).
|
| This year, I did their taxes and mine too (separately), using
| FreeTaxUSA.
| clintonb wrote:
| The idea of paying someone $250 when the government already has
| the data is ridiculous. Accountants are accessible to some, but
| we shouldn't need to pay someone when the government can do the
| calculations.
| missedthecue wrote:
| The government really doesn't have the data. Do they have
| cameras in your home detecting whether or not you paid for
| more than 50% of your child's living expenses?
| djrogers wrote:
| > Are accountants prohibitively expensive in the US?
|
| No, they're not. Obviously cost will vary based on complexity
| (self employment, side-hustles, stock options etc) but for the
| most part a basic return by an accountant would be in line with
| what you're paying.
| lupire wrote:
| At that price point, your accountant is just charging you to do
| the data entry into Turbo Tax or equivalent. It's more work to
| coordinate, and and provide all the info, and costs more.
| chrisseaton wrote:
| > At that price point, your accountant is just charging you
| to do the data entry into Turbo Tax or equivalent. It's more
| work to coordinate, and and provide all the info, and costs
| more.
|
| People in this thread are talking about _literally writing
| their own software_ to do it. Half an hour to collect up my
| payslips and email them to an accountant for $250 can 't
| possibly be more work and cost more?
| andrewpi wrote:
| No mention of TaxAct on this post; is their marketshare really
| that insignificant?
| saxelsen wrote:
| As a non-US resident, and by judging all the comments here plus
| the article's point about how hard it is to joust TurboTax from
| the top, what is the main benefit for a consumer to actually make
| the change? It seems like TurboTax actually does your taxes quite
| well and that it's pretty hard for competitors to catch up to the
| functionality. But was is the argument for competing with it?
| mikewarot wrote:
| I'm willing to pay TurboTax AND test (with my info) whatever else
| someone gives me to run locally on my Windows machine, offline,
| in a virtual machine. I'll do it every year, until the software
| is good enough to use without paying the TurboTax Tax.
|
| I'm also willing to help debug it.
| PrimeDirective wrote:
| "What if we could give customers a button. They'd press it at the
| end of the year and it would automagically file their taxes for
| them." Literally is like this where I live. It's done through a
| government website.
| webinar wrote:
| I've been using excel1040.com for the last few years. It's an
| excel spreadsheet calculator, in the same format as all the tax
| forms.
|
| You still have to know "how to do your taxes", but it takes away
| a lot of the busy work, and will flag certain things you may
| otherwise miss.
| lcuff wrote:
| In addition to being very complex, tax codes change yearly.
| Whoever might take this on would have to take on that a tax code
| change made in December needs to be interpreted: What questions
| need to be asked to fill in the new line on one or more IRS
| forms? And any of the states can likewise make last minute
| changes. It's nasty time pressure because you have weeks to
| implement, test, and ship the accommodation to new requirements.
|
| I also observe that the tax code was crazy complex before
| personal computers became popular in the eighties. Blaming Turbo
| Tax for the complexity is misplaced blame, though no argument
| they have a vested interest in keeping them complex, and they pay
| lobbyists to safeguard their interests.
| [deleted]
| [deleted]
| klmadfejno wrote:
| The article seems odd to me. Tax filing at the push of a button
| still implies a middleman. You don't need to push the button.
| moviuro wrote:
| We have the following data about you: [...] Does it look
| correct? [Y/n]
|
| That's how it's done in France for example.
| guerrilla wrote:
| and Sweden.
| kwhitefoot wrote:
| And Norway.
| dang wrote:
| This is such an ongoing theme on HN that we could maybe use a
| bibiliography. If I missed any big ones let me know.
|
| In reverse chronological order:
|
| _Show HN: ustaxes.org - open-source tax filing webapp_ -
| https://news.ycombinator.com/item?id=26138446 - Feb 2021 (219
| comments)
|
| _TurboTax Tricked You into Paying to File Your Taxes (2019)_ -
| https://news.ycombinator.com/item?id=26102695 - Feb 2021 (306
| comments)
|
| _TurboTax's 20-Year Fight to Stop Americans from Filing Taxes
| for Free (2019)_ - https://news.ycombinator.com/item?id=26060414
| - Feb 2021 (199 comments)
|
| _FTC Is Investigating Intuit over TurboTax Practices_ -
| https://news.ycombinator.com/item?id=24409093 - Sept 2020 (194
| comments)
|
| _IRS Reforms Free File Program, Drops Agreement Not to Compete
| with TurboTax_ - https://news.ycombinator.com/item?id=21923220 -
| Dec 2019 (448 comments)
|
| _IRS Tried to Hide Emails That Show Tax Industry Influence over
| Free File Program_ -
| https://news.ycombinator.com/item?id=21393758 - Oct 2019 (188
| comments)
|
| _TurboTax's 20-Year Fight to Stop Americans from Filing Taxes
| for Free_ - https://news.ycombinator.com/item?id=21281411 - Oct
| 2019 (447 comments)
|
| _TurboTax to charge more lower-income customers_ -
| https://news.ycombinator.com/item?id=20461169 - July 2019 (81
| comments)
|
| _Congress Scraps Provision to Restrict IRS from Competing with
| TurboTax_ - https://news.ycombinator.com/item?id=20119916 - June
| 2019 (18 comments)
|
| _TurboTax Uses a "Military Discount" to Trick Troops into Paying
| to File Taxes_ - https://news.ycombinator.com/item?id=19994118 -
| May 2019 (42 comments)
|
| _Listen to TurboTax Lie to Get Out of Refunding Overcharged
| Customers_ - https://news.ycombinator.com/item?id=19870242 - May
| 2019 (44 comments)
|
| _TurboTax and H &R Block Saw Free Tax Filing as a Threat_ -
| https://news.ycombinator.com/item?id=19810981 - May 2019 (143
| comments)
|
| _TurboTax Hides Its Free File Page from Search Engines_ -
| https://news.ycombinator.com/item?id=19758126 - April 2019 (262
| comments)
|
| _TurboTax Uses Dark Patterns to Trick You into Paying to File
| Your Taxes_ - https://news.ycombinator.com/item?id=19718284 -
| April 2019 (274 comments)
|
| _Congress Is About to Ban the US Government from Offering Free
| Online Tax Filing_ -
| https://news.ycombinator.com/item?id=19613725 - April 2019 (696
| comments)
|
| _How the Maker of TurboTax Fought Free, Simple Tax Filing
| (2013)_ - https://news.ycombinator.com/item?id=19392673 - March
| 2019 (253 comments)
|
| _H &R Block and Intuit Lobby Against Free and Simple Tax Filing
| (2017)_ - https://news.ycombinator.com/item?id=18956883 - Jan
| 2019 (190 comments)
|
| _Would You Let the I.R.S. Prepare Your Taxes? (2015)_ -
| https://news.ycombinator.com/item?id=17751383 - Aug 2018 (424
| comments)
|
| _Why I 'm boycotting TurboTax this year_ -
| https://news.ycombinator.com/item?id=16844458 - April 2018 (23
| comments)
|
| _H &R Block and Intuit Lobbying Against Simpler Tax Filing
| (2017)_ - https://news.ycombinator.com/item?id=16841449 - April
| 2018 (232 comments)
|
| _H &R Block and Intuit Are Lobbying Against Making Tax Filling
| Free and Easy_ - https://news.ycombinator.com/item?id=13922482 -
| March 2017 (234 comments)
|
| _How the Maker of TurboTax Fought Free, Simple Tax Filing
| (2013)_ - https://news.ycombinator.com/item?id=13853150 - March
| 2017 (439 comments)
|
| _TurboTax Takes Aim at Smaller Rival in Fight for Filers_ -
| https://news.ycombinator.com/item?id=11150694 - Feb 2016 (87
| comments)
|
| _Would You Let the I.R.S. Prepare Your Taxes?_ -
| https://news.ycombinator.com/item?id=9381437 - April 2015 (150
| comments)
|
| _Would You Let the I.R.S. Prepare Your Taxes?_ -
| https://news.ycombinator.com/item?id=9380232 - April 2015 (124
| comments)
|
| _Filing taxes: It shouldn 't be so hard_ -
| https://news.ycombinator.com/item?id=5488084 - April 2013 (56
| comments)
|
| _How the Maker of TurboTax Fought Free, Simple Tax Filing_ -
| https://news.ycombinator.com/item?id=5443203 - March 2013 (330
| comments)
| anaclet0 wrote:
| I wonder what happened to turbotaxsucksass.com, it was listing a
| bunch of free alternatives and it mysteriously expired right
| before tax season began.
| [deleted]
| vidarh wrote:
| It was set up for Hasan Minhaj's show, and the show was
| cancelled. Since it was set up right before previous "tax
| season" I'm assuming they'd just paid for a year.
|
| It's in archive.org, though, e.g. [1], and it's just a static
| site with a bunch of links.
|
| [1]
| https://web.archive.org/web/20210130180334/https://www.turbo...
| mattwad wrote:
| Try freetaxusa.com if you're looking for a free alternative that
| has an equally friendly user interface!
| throwaheyy wrote:
| Another vote for FreeTaxUSA. They are totally free for federal
| returns but I happily pay the $6 for the 'Deluxe' service level
| to support its development.
|
| Been using them for years now after getting tired of TurboTax's
| $60-100 fear racket.
| klmadfejno wrote:
| I had a lovely experience with freetaxusa this year.
|
| They're not entirely free, but they're still very cheap and
| transparent about their pricing. They don't do the login thing
| where you hook into your banks and pull in documents
| automatically, but... honestly those aren't that useful and I'm
| not sure I trust those on turbotax.
| crowf wrote:
| I don't mind paying for a service, but with a URL that includes
| the word "free" I was surprised to see at the top of the page
| "State Returns $14.99 $12.95 -- 12 more days to save on state
| filing"
| lupire wrote:
| It's FreeTaxUSA, not FreeTaxYourState.
|
| Or it's "Free as in freedom from Intuit."
| carabiner wrote:
| I just tried it. It has a good interface, but a massive
| downside in that it doesn't have any automated
| importing/parsing of W-2's, 1099's, and other forms, unlike
| TurboTax. You have to type in every single number, leaving room
| for fat finger errors that TurboTax largely eliminates. This
| removes much of the advantage of doing your taxes online in the
| first place. TurboTax will smoothly import these, sometimes
| directly from your bank's website (you don't have to download
| and upload the PDF). If FreeTaxUSA built a robust tax form PDF
| parser it would be a real TurboTax competitor. Right now, it's
| just a cleaner interface to filling out the IRS PDF's on your
| own. It's good if you don't mind a more manual approach to your
| taxes.
| lupire wrote:
| You don't have to type; you can copy&paste. Still annoying
| though
| hanniabu wrote:
| Only free for federal. Also doesn't seem to be open source so
| who knows if they're logging your social security number and
| other info.
| lupire wrote:
| Of course they are logging your info, same as Intuit and so
| many other companies. SSN isn't a secret; yours is almost
| certainly already leaked.
| williesleg wrote:
| Thank God for Trump, my taxes are a lot easier now! Just a
| 1040ez!
| somehnguy wrote:
| TurboTax is disgusting. I used them for a few years in the past
| due to their great marketing and easy to use website. But they
| pulled a bait & switch on me last year, at the last minute (after
| I had done everything) I was required to pay north of $120 to
| actually file.
|
| The problem isn't that they want money to use their software,
| it's that they're not upfront about it. Free is thrown in your
| face about 100 times during the process and then they surprise
| you right at the end after you've already invested a bunch of
| your time.
|
| My taxes are dead simple - I just don't trust myself or care
| enough to file without some software assistance. This year I'm
| using a different company who appears to be much less shady and
| will never use TurboTax again. I hope TurboTax making my money
| once was enough to lose me as a customer for life. In reality I
| hope the company ceases to exist in the near future, but that
| seems unlikely.
|
| I'm excited at the prospect of free & open source tax software -
| for next year maybe.
| orev wrote:
| Intuit (owner of TurboTax) was sued over this because they had
| some of the darkest patterns imaginable around FreeFile. They
| blocked search engines from finding it using robots.txt. They
| would show a page where only 1 tiny link brought you to the
| free site, while all others switched you back to the paid one.
|
| Pro Publica did some excellent reporting on this in 2019 and
| they seem to have made it one of their pet projects.
| agloeregrets wrote:
| Thats exactly what I got that I felt like the Article didnt
| seem to get.
|
| Turbo Tax is required to abide by the FreeFile rules. this
| means that for some customers their software is required to be
| free.
|
| By some customers I mean like 60%.
|
| So TurboTax moved to seeing their product as an upsell game,
| start at free and UHOH! You have to pay us! To that they dont
| have to be upfront because they 'Didn't know you made too
| much'.
|
| Now, this is where things get fun. How does TurboTax get you to
| pay? Three ways: 1. Have your info on file so you don't need to
| enter it. 2. Make sure to place the payment step at the VERY
| end of the process when you are deep into the system and offer
| ways to pay it via your return. 3. Agressive UI and UI dark
| patterns to make the software appear to work harder and be more
| trustworthy and to make you feel as if you put in more
| involvement. There are numarous animations stating things like
| 'Verifing your maximum money back' and such that are all false
| loading screens. It all makes the customer trust it more while
| it's just wasting their time.
|
| TurboTax is a bait and switch company that for many is free and
| makes their customer feel like they did the work. You can't
| compete with that concept by offering an automatic engine with
| no involvement becasue the customer will think it's wrong or
| they are being screwed and any upfront cost to cover
| development will make the customer think your product costs
| more.
| ndiddy wrote:
| Another way is how they have two "free" sites: One called
| "IRS Free File Program by Turbotax" and one called "Turbotax
| Free Edition". The free file version of Turbotax is only
| accessible from the IRS free file webpage (they block it from
| search engine results) and has a limit on annual income, but
| (as far as I know, I file on paper) it does not have as many
| upsells as "Turbotax Free Edition", which has a different
| (higher) annual income limit and gets advertised like crazy
| by Turbotax. This obviously creates customer confusion and
| people get tricked into using the wrong version.
| coldpie wrote:
| If your taxes are super simple, you can use the IRS's free
| fillable forms:
|
| https://www.irs.gov/e-file-providers/free-file-fillable-form...
|
| You basically type your numbers in and it does the math for
| you. Then you print it out and mail it in. It can't do anything
| complex, though.
|
| In my experience (Minnesota), state filing is even easier,
| usually just copying numbers from your federal form and doing
| one table lookup. No reason to give the shitty companies more
| money.
| zaychikk wrote:
| Also, if your income is under $72,000 you can use the
| TurboTax website completely free through the Free File
| program: https://apps.irs.gov/app/freeFile/browse-all-offers
| kristopolous wrote:
| Use another service on that page, any of them. Turbo tax is
| full of dark patterns. They're corrupt and dishonest
| swindlers.
| [deleted]
| JMTQp8lwXL wrote:
| Free File is made by Turbotax. It's likely to discourage the
| government from entering the space. dig
| freefilefillableforms.com ;; AUTHORITY SECTION:
| freefilefillableforms.com. 300 IN SOA a18-64.akam.net.
| nadmin.intuit.com. 2020102802 10800 3600 604800 86400
| lupire wrote:
| There's an actual law and legal agreement between IRS and
| tax companies to operate Free File.
| JMTQp8lwXL wrote:
| And that relationship isn't disclosed to users. You have
| to dig to find it.
| somehnguy wrote:
| Thank you, that actually appears to be much more user
| friendly than I would have imagined. When I think of
| government websites I think I'm still stuck in the mindset of
| government websites 10 years ago (aka absolutely horrible).
| I've been surprised at how good things have gotten regarding
| them a few times, so I guess I need to snap out of that
| mindset.
|
| While looking over the requirements and supported forms I
| didn't find anything about student loans (form 1098E), would
| you happen to know if that method is compatible with them?
| coldpie wrote:
| Sorry, no idea.
| crazygringo wrote:
| Free Fillable Forms supports every tax form as far as I'm
| aware.
|
| It's really no different from doing your taxes by hand on
| paper, except it does almost all the math for you.
|
| I've been using it for years (with about 15 different
| various forms) simply because I refuse to support the tax
| prep software companies out of principle.
|
| And each year I just look at the previous year's which I
| saved as PDF for reference in case I forget which number
| goes where.
| icameron wrote:
| You're not required to pay anything if your taxes are 'dead
| simple' you can fill out 1040EZ for free. And still can still
| compare turbo tax for free to see if you got the same numbers,
| and send it in for free. Nobody forces you to pay. I did that
| when I was single.
|
| Nowadays, its complicated. Mortgage deductions, rental income
| and depreciation, independent contractor, children, jointly
| filing. I could attempt to do that on my own but it would take
| hours and I likely would leave money on the table. In my use
| case I am more than happy to pay a hundred bucks. It's actually
| less if you file early too, and its deductible in your next
| years tax liability... I don't understand why everyone here
| wants to kill Turbo Tax. It makes my life easier and less
| stressful around tax season.
| retzkek wrote:
| 1040-EZ and 1040-A were eliminated in 2018, so pretty much
| everyone uses 1040 now (which was probably simplified, I
| haven't compared). There's also 1040-SR for seniors.
|
| > And still can still compare turbo tax for free to see if
| you got the same numbers, and send it in for free.
|
| That's what I do for state, since my state has a relatively
| simple tax structure and offers free online e-file. For
| federal my situation is similar, I'm happy to pay someone <
| $100 to deal with all the schedules and calculations and make
| sure things are consistent. An accountant would be much more,
| and inertia keeps me with TurboTax, for better or worse.
| goda90 wrote:
| TurboTax Deluxe comes in a version that includes a state
| filing, and one that doesn't. There is a $10 price difference,
| but if you get the Federal only one, the price to add a state
| filing is much more than $10. Last year, the listings on Amazon
| were very hard to distinguish, and my father, who is pretty
| tech savvy for his generation, bought the Federal only one by
| accident, so state filing cost him much more. It seems like the
| Amazon listings are a bit more clear this year, but the whole
| thing put a sour taste in my mouth last year, and I switched
| away from TurboTax.
| JanSolo wrote:
| This has already been done successfully in Canada. A small team
| from Vancouver built a pay-what-you-want web-based tax-filing
| system from scratch. It's called SimpleTax and it's already a
| major competitor to the Canadian version of TurboTax. In fact, it
| was so successful that it was recently acquired by Canadian
| investment group WealthSimple.
| parliament32 wrote:
| Unfortunately, the "we promise not to sell your personal data"
| disappeared from the privacy policy during the acquisition, so
| we know why they remain donationware post-acquisition.
|
| https://www.cbc.ca/radio/costofliving/the-canadian-tech-comp...
| jcun4128 wrote:
| Ooh ToS/privacy policy diffing service alerts as a service ha
| eitland wrote:
| Used to be a plain Firefox extension back in the days.
|
| It was really simple, something like:
|
| - You clicked a button in the toolbar or right clicked and
| chose menu option
|
| - a dialog showed up, you chose how often it should check
| the page and how big differences it should tolerate and
| clicked OK.
|
| - once every hour or 4 times a day or twice a day depending
| on your choice Firefox would download the page locally,
| compare it and tell me if there were changes.
|
| Yes, we oldtimers mostly complain about TST, but there were
| an entire ecosystem of brilliant extensions - so brilliant
| I figure it would habe been hard for me to believe today if
| I hadn't experienced it back then.
|
| That's what you can have when you have brilliant people
| making brilliant software to empower you :-/
|
| Edit: seriously, I would pay $20 a month for someone who
| would fix the new Firefox. If someone made a realistic
| Kickstarter I'd support it right away and then monthly if
| necessary.
| nikon wrote:
| Can't find the source, but the CRA will be bringing out their
| own free software too soon
| ehsankia wrote:
| No wonder I've been seeing so much ads about WealthSimple tax.
| It's literally every other ad on TikTok for the past 2 months.
| That and every other WealthSimple app (trade, invest, etc).
| Germanika wrote:
| I can honestly say that SimpleTax has been life changing for
| me, and is a great example of just how important UX can be. My
| partner used to have literal panic attacks trying to file
| taxes, even with TurboTax/UFile/etc. Since we've started using
| SimpleTax, it's done in one sitting and is not even a source of
| stress anymore.
| trishume wrote:
| For people who haven't used it: SimpleTax just absolutely nails
| UI quality, it's so nice and smooth that every year I've used
| them I've been done in under 15 minutes (other than time spent
| double-checking because it can't have possible been that easy)
| and come away so grateful for their existence that I gladly
| throw money at them. One year the Canadian Revenue Agency even
| introduced a new API that lets SimpleTax pre-fill most of the
| information like employment income from the stuff the CRA has
| on file.
|
| I've since moved to the US and I'm dreading doing my taxes
| using probably TurboTax for the first time this year. At least
| it probably won't be as bad as previous years when I had to
| file non-resident US taxes for internships, where you can't
| even use TurboTax and have to use Glacier or TaxAct, which were
| terrible compared to SimpleTax.
| pkoullick92 wrote:
| Hello HN! I'm the founder of Keeper Tax (keepertax.com) and
| killing TurboTax is our mission.
|
| We recently raised a large round, and we're hiring engineers,
| designers, data scientists. Ping me at paul@keepertax.com
| devoutsalsa wrote:
| What's the Keeper Tax business model?
| funkaster wrote:
| I'm Chilean. Chile doesn't have the best system by far, but the
| SII (IRS equivalent) has made a push to modernize for several
| years now. Filing taxes for 90% of the people is as easy as going
| to the website, check that everything is pre-filled correctly
| (and add anything that needs to be done manually, if for instance
| you didn't do electronic invoices). Submit. Takes about 10 min.
|
| I've been living in the US for about 10 years now, I really wish
| we had a simpler system. Today, I just pay a tax consultant
| because I don't want this to be an extra thing in my head.
| bob1029 wrote:
| "Killing TurboTax" is essentially a meme until we meaningfully
| simplify the tax code.
|
| There is no software development team on earth who could catch up
| with the full capabilities of TurboTax without some sort of
| fundamental shift in the business. I really hate to say this as
| someone who makes a living out of it, but dealing with the
| current amount of complexity in the tax code with a piece of
| software that a non-expert could use is virtually impossible.
|
| For the happy path (i.e. single individual, no dependents, no
| investments, no retirement, rents home), you could certainly
| build an application that handles these scenarios. The moment you
| factor in individuals who are bringing stock sales, multiple
| investment properties, ownerships/K1s and other complex scenarios
| to bear, its a different hellscape altogether.
|
| Also don't forget that most states have their own independent tax
| codes as well, which further complicate matters. There's
| difficulty multipliers all over this problem domain, and you can
| be certain that the lobbyists employed by Intuit, et. al. are
| encouraging this.
| [deleted]
| namdnay wrote:
| Hmmm, how does the IRS check? Purely manually? Surely there are
| some alternatives out there. Worst case scenario, the
| government buys a turbo tax competitor
| dan-robertson wrote:
| Is there some software solution that may make things easier.
| For example if rules are written in a language like prolog
| could you have the system ask you the relevant questions? Would
| the set of rules be easier to maintain?
| astura wrote:
| The IRS themselves need to provide this "auto tax" service.
| peter303 wrote:
| The tax prep industry lobbied Congress to prevent the IRS
| from auto-tax filing. The compromise was "free filing" for
| those with median incomes and below. For a majority, W2s,
| 1099s and the previous years return can provide an auto-
| filing framework. The IRS would send your their draft and you
| agree or modify. Other countries do this.
| alkonaut wrote:
| If I saw a proposal to make tax codes simpler, have people
| file taxes with a good app provided by the IRS etc and then
| I saw a politician vote _against_ it, while being funded by
| companies benefiting from the status quo...
|
| I'd just not vote for that person again.
| masklinn wrote:
| > The IRS themselves need to provide this "auto tax" service.
|
| Interestingly, they now can: under the Free File program, tax
| prep companies would offer free filing (for taxpayers below
| 72k AGI) and the IRS would not compete with their service.
|
| After a ProPublica investigation in their dark pattern
| shenanigans (leading to about 3.5% of taxpayers to use the
| program when 70% are eligible) confirmed by the HSGA Senate
| Committee and NYS DFS, the IRS both updated its rule to
| preclude e.g. hiding Free File programs for search engine,
| and removed the rule which prevented them from competing.
|
| Sadly the IRS has been hamstrung time and again by the GOP,
| both financially and politically. They can't even do their
| core jobs of collecting tax and auditing the taxpayers they
| need to, so it's unlikely they'll have the clout and funds to
| set up a free filing program any time soon, let alone one
| properly integrated with their likely antiquated and in dire
| need of updates computer systems.
| bob1029 wrote:
| As noted in other comments here, an "auto tax" service only
| really works on the happy path. There are parts of the tax
| code which are highly subjective in more complex situations
| and require explicit elections on part of the filing party.
| These elections can have consequences far beyond the
| immediate tax filing transaction.
| civilized wrote:
| There is a big gap between what tax software companies
| charge $$$ for and what is _actually_ complex and
| subjective. Like, if you have an HSA, that instantly boots
| you into the Deluxe Edition of H &R Block (about $100
| federal+state), even if your HSA situation is very
| straightforward.
|
| Tax prep software is worth every penny IMO, but they do
| nickel-and-dime you for many pretty simple situations.
| astura wrote:
| No, it can work with the complicated path too, they present
| you with what they already know about you and give you the
| opportunity to add more information that they don't yet
| know. They then calculate what you owe and tell you.
|
| At some point they are going to calculate what you owe
| based on what you provide them and what is reported to
| them, no matter what.
|
| Laws that authorize "auto tax" can also come with extra
| reporting requirements.
| robert_foss wrote:
| This is how it is done in Sweden. And after having lived
| in 2 other countries it is clearly the way to go.
|
| The tax authority sends you a summary and you just
| approve it.
| sfteus wrote:
| This always made the most sense to me. You get your
| return and review it; sign off if it's good, modify and
| return it if you have more claims, something is wrong /
| missing.
|
| I'd wager the majority of people wouldn't have a reason
| to submit a revised return. And if the federal government
| generated your return, hopefully that would give them
| reason to automatically exclude you from audit, (ideally)
| reducing the burden of auditors.
| vinkelhake wrote:
| As a Swedish expat in California I cringe everytime tax
| season comes. Both because of how annoying it is, and
| because I know how simple it _can_ be.
| dtech wrote:
| Works this way in the Netherlands too, you login on a
| website and just click through the information they have
| pre-filled in normal cases.
| [deleted]
| dave5104 wrote:
| Not to mention, I'm sure the "happy path" will
| accommodate a significant number of tax payers.
| astura wrote:
| Currently, probably >85%, given that ~90% percent of
| households took the standard deduction in 2018.
| ghaff wrote:
| The standard deduction is pretty high these days. I'll
| probably be back to not itemizing next year but my taxes
| are certainly not simple.
| sokoloff wrote:
| There is a much greater depth of detail that I provide to
| my tax preparer than I'd be willing to share with the
| IRS. I tell my tax preparer everything and have perfect
| confidence that my taxes will be prepared correctly and
| in accordance with the tax code and that nothing which is
| not required to be disclosed will be disclosed. Much of
| what I provide to my preparer is irrelevant to my tax
| obligations and anything that's irrelevant I would prefer
| not be disclosed.
|
| I'm mostly a W-2 schmo without any particularly complex
| business arrangements and with a spouse who employs
| themself in a consulting capacity, puts the statutory
| maximum into tax-deferred accounts every year, and we
| have minor kids who are required to file returns due to
| kiddie tax laws.
|
| I can imagine many people would rather pay a high three
| or low four-figure per year bill for tax prep and
| representation rather than give the IRS full access to
| their financial lives.
|
| I do support (and strongly so) the idea that the IRS
| could provide simple, default tax prep based on the
| information they receive. Where I break is what
| escalation path should exist; I think there must remain
| an effective and private escalation path for more complex
| scenarios. (In many ways, that makes it even easier to
| implement. Make the simple case automated-by-default.
| Punt all the complex cases to the current system.)
| masklinn wrote:
| > There is a much greater depth of detail that I provide
| to my tax preparer than I'd be willing to share with the
| IRS. I tell my tax preparer everything and have perfect
| confidence that my taxes will be prepared correctly and
| in accordance with the tax code and that nothing which is
| not required to be disclosed will be disclosed. Much of
| what I provide to my preparer is irrelevant to my tax
| obligations and anything that's irrelevant I would prefer
| not be disclosed.
|
| Cool beans. Literally nothing preclude you using a tax
| prep service but using the IRS's tax declaration system,
| which would double up as a simple tax prep system.
|
| That's what happens just about everywhere in Europe: you
| log in a dedicated government service, and you do your
| tax declaration. All the stuff the government knows about
| (salary, loan deductions, dependents, ...) is already
| input, but nothing precludes drilling down and updating
| details. Nothing is lost compared to a paper declaration.
| harperlee wrote:
| May I ask examples of things that you are not confident
| sharing with the IRS, that you do not have the obligation
| to share with the IRS, and that can affect the taxes you
| owe? In my (foreign) mind, whatever might affect your
| obligation final number you are legally required to do so
| (either preemptively or when asked), so I don't fully
| understand.
| sokoloff wrote:
| Many things that I tell my preparer are needed later, but
| not now. (Tax basis for RSUs that vested. Value of
| capital improvements to my property.)
|
| Other things are needed only if we elect to method A of
| calculation, but not if we use method B of calculation.
| So I give him all the data; he computes my obligations
| using method A and method B, chooses the better option,
| and reports only the data needed to support that method's
| calculations.
|
| I pay my preparer to be an expert in tax code, to
| represent me in any audits, and incidentally to prepare
| my return correctly.
|
| Part of that expertise is that I don't have to be an
| expert, so I tell him everything and he politely rolls
| his eyes and smiles when I dump irrelevant things on his
| desk.
| maxerickson wrote:
| A tax preparer could presumably still help you make the
| decision about what information to share with the IRS. I
| guess they would be something else, but you get the
| point.
| tomjakubowski wrote:
| Then let the government distribute this hypothetical
| preparation software as free software. It could therefore
| be verified that you're not telling the state more than
| you want them to know.
| Larrikin wrote:
| You are making an argument for a simplified tax code and
| reporting system.
|
| The not needed now but maybe later financials should
| already be reported by the financial institution to the
| tax agencies.
|
| There should not exist a system where there is a method
| A, B or C and if you have thousands of dollars a tax
| accountant can find all the loop holes to make you pay
| the least. You should just pay what is owed, not more or
| less.
|
| You wouldn't pay for tax preparation if the potential
| savings weren't more than what you pay him. With a
| simplified system there also wouldn't be much need for
| the audit help you are usually offered when using their
| assistant
| tylerhou wrote:
| I don't think anyone here is advocating for a system
| where you cannot prepare your tax return privately. The
| problem is that private tax preparation corporations have
| lobbied to make an IRS system illegal.
| ralphc wrote:
| Also, don't forget the IRS has a quasi-adversarial
| relationship with you. You're trying to pay as little tax
| as legally allowed, they want you to pay more. They're
| not motivated to show you ways to pay less tax.
| gamblor956 wrote:
| This is false. The IRS wants you to pay the amount
| calculated as due under the information they have
| available about your income.
|
| The IRS is not motivated to collect more income or to
| deprive taxpayers of refunds. They're motivated to do
| their jobs, whether that means issuing a notice of amount
| due, or paying out a refund check (which they do for
| millions of taxpayers without issue, every year).
| warkdarrior wrote:
| If I donate to a charity, it may reduce the tax I have to
| pay, especially my income is at the boundary between two
| tax brackets. Would IRS suggest such a donation in order
| to reduce the tax amount? Tax advisors do that all the
| time.
| loopercal wrote:
| >especially my income is at the boundary between two tax
| brackets
|
| Wait, can you explain how tax brackets work because I
| think there may be a fundamental misunderstanding here.
|
| If we have two brackets, 10% for <=$100 and 90% for
| >$100, what do you think the tax bill would be for
| someone who earned $101?
| tylerhou wrote:
| That's not how taxes work. Unless you would have donated
| to a charity anyway in a subsequent year, you never gain
| money on net from donating since your tax rate is
| marginal.
|
| Even if you have super low income and you are on the
| border for benefits (EITC, Medicare), donating to a
| charity will not make you eligible for those benefits
| because that eligibility is determined by AGI, which is
| income before deductions.
|
| The only situation which this makes sense on net is if
| you tell your tax advisor that you want to donate some
| amount of money over the next few years. Then the advisor
| might tell you to donate in high-earning years to offset
| a higher marginal rate. In the above proposed scheme, the
| IRS would only get one year's worth of data, so it cannot
| recommend you this type of tax avoidance.
| sokoloff wrote:
| There are scenarios in tax planning where expert advice
| can change the tax you owe by getting you to do something
| slightly different.
|
| If you bunch deductions, you might alternate between the
| standard deduction and itemizing deductions, meaning if
| you want to support charities with $10K per year, you're
| better off to donate in Jan and Dec of the same year
| (itemizing), then skip 13 months (taking the standard
| deduction), then donate twice in the year after that
| (itemizing), etc. With the increased standard deduction,
| this may be needed to allow your donations to become
| deductible at all.
|
| There are other planning strategies that a combined
| advisor and preparer can help with. (Using your HSA
| optimally as a retirement account. Optimizing your Roth
| conversions over the years. Modeling whether Backdoor
| Roth contributions make sense (or "what would you have to
| believe is true to have them make sense?") For business
| owners, setting the balance between your salary and
| distributions of profits.) Those are advice activities
| that overlap with a detailed understanding of your
| financial and tax situation and often mean that you have
| to change something about the structure or timing of your
| activity to accomplish your goal.
|
| The IRS is in an OK position to look back and judge
| "based on what actually happened, here's what you owe",
| but in a terrible position to offer optimization advice.
| brigade wrote:
| You do realize that $1k is about 10% of the median
| household income tax liability?
|
| I can't imagine the majority of people happily accept a
| 10% (more for half of households) tax hike, when
| companies already CC the IRS on all the forms they're
| regurgitating.
| sokoloff wrote:
| I'm actually fairly shocked that $10K is the median
| income tax liability given that a substantial percentage
| of households pay no net federal income tax.
| ska wrote:
| It's probably median for households that pay _any_ tax.
| spullara wrote:
| This statistic I think is with respect to those that owe
| tax rather than for all households (it excludes 1/3rd of
| those that file returns):
|
| "The most recent IRS data revealed that Americans who
| filed taxable returns paid an average income tax payment
| of $15,322 in 2018. This number was calculated based on
| the returns of over 153 million American households who
| filed during that period, which included just over 100
| million taxable returns."
| Larrikin wrote:
| What is an example of something legal that you would be
| afraid of the IRS seeing?
|
| I can't imagine any scenario that most people (anywhere
| close to fifty percent of tax payers) would be willing to
| lose a significant portion to all of their refund check
| by needing to pay a tax preparer potentially thousands of
| dollars.
| sokoloff wrote:
| Answered a sibling with a similar question:
| https://news.ycombinator.com/item?id=26333946
| executesorder66 wrote:
| We have this in South Africa. It was always easy to do your
| taxes before, but since last year they do what they call an
| "Auto assessment". The South African Revenue Service collects
| all the documents they need (payslips, medical aid, pension
| etc.) from the respective organizations, fills out the tax
| form for you, and lets you know it's ready.
|
| I logged in to check that they did it correctly, which they
| did, and approved it. Literally took ten minutes. Nine of
| which were just reviewing all the fields on the form.
|
| Obviously this does not work for people who have very
| complex/unusual tax situations, but for your average person
| it's great.
| zo1 wrote:
| They don't simply collect all "documents" they need. They
| hoover up the data _directly_ from various institutions.
| Your employer being one, your bank another, your medical
| aid, etc. Not only that, but they 're getting involved with
| the IRS now via FATCA. It's actually awesome that they're
| probably doing a better job than the government itself when
| it comes to having an all-encompassing view of the tax-
| cattle that they oversee.
| executesorder66 wrote:
| Oh, I am under no illusions that this was not a pursuit
| of excellence, but rather a way to make sure they get as
| much tax money as possible. Considering how 90% of all
| other government services are complete garbage.
|
| But I still believe that paying taxes is the right thing
| to do (how else do you keep a country running, even a
| corrupt one?). And as someone who really hates doing any
| kind of admin, this was a breath of fresh air, and highly
| appreciated, even if their motives are not perfect.
| SubiculumCode wrote:
| In one sense I totally agree, but in the other sense, it
| seems like it could be terribly invasive privacy wise.
| derekp7 wrote:
| To give an example of complexity that can hit "normal" people,
| something I just learned yesterday. If you are between 18 and
| 24, and a student, then if you had received unemployment income
| that income is considered "unearned income". Therefore it is
| subject to the highest marginal tax rate (tax bracket) that
| your parents fall into (which is 22% - 24% for quite a few
| people).
|
| To me, that is kind of nuts, and not something that follows
| from normal logic (i.e., it isn't something that you will "get
| right" by just filling out a standard 1040 form).
| munk-a wrote:
| I disagree that it's nonsensical for it to work this way
| since that unemployment benefit is being granted after your
| parents are claiming that they are supporting you - so
| essentially they're getting a big tax deduction on their
| income for your costs but then the unemployment benefit is
| being claimed to make sure for a lack of them covering costs
| - in a simple world one might make the other ineligible but
| that could result in some folks being put through
| unreasonable financial hardships due to poor planned or ill-
| intended returns from their parents so this allows that
| benefit to be given while also recognizing that something
| going on here is double dipping.
|
| If you are financially independent then you should make sure
| your parents aren't claiming you as a dependent, if you
| aren't then you should be receiving those covering funds from
| your parents since that's the sort of dependency the
| dependent class is all about.
| derekp7 wrote:
| The overall law had a good reason, to keep parents from
| transferring appreciating assets to their children (who
| wouldn't have any other income), in order to lessen the tax
| burden of those assets. So the tax code references any
| unearned income.
|
| It just isn't logical for most people to know that their
| unemployment income is also unearned income, and that you
| could be underpaying your taxes even after filling out the
| 1040 completely (and following the instructions in the 1040
| instruction book).
|
| Maybe this case is called out specifically, it doesn't
| apply to me so I haven't looked for it in the instructions,
| however it was just something that I ran across that made
| me scratch my head.
| mandelbrotwurst wrote:
| By "and a student" do you mean claimed as a dependent by
| someone else?
| dsr_ wrote:
| Yes, because if you aren't a dependent, it's income for
| your own return, not theirs.
| mandelbrotwurst wrote:
| Cool, yeah just wanted to clarify so the comment didn't
| confuse any non-dependent students.
| maybelsyrup wrote:
| > "Killing TurboTax" is essentially a meme until we
| meaningfully simplify the tax code. [...] There is no software
| development team on earth who could catch up with the full
| capabilities of TurboTax without some sort of fundamental shift
| in the business.
|
| So let's just nationalize TurboTax.
| kbenson wrote:
| That would a) never happen in the current US political
| climate and b) provide enough ammunition to those against
| such a mode as to be extremely counter-productive towards
| other social programs that could deal with more government
| support.
|
| In other words, think back on all the talk of Democrat being
| "socialists" over the recent years and imagine the field day
| conservatives would have if any national figure mentioned
| this as an idea out loud, and how that might be used to shift
| the balance of power such that other meaningful programs that
| could deal with additional governmental support and
| regulation (healthcare) get set back.
| azog_alone wrote:
| The reason the tax code is so complicated is BECAUSE OF
| TurboTax. They lobby heavily to keep things complex and have
| brought down potential competitors through legal means.
|
| As such, "killing TurboTax" is the correct first step.
| ghaff wrote:
| I know it's nice to have a corporate bogeyman to rail against
| but it's not that simple. For example, there have been all
| sorts of tax deductions over the years to incentivize things
| like home energy efficiency improvements, EVs, solar power,
| charitable contributions, etc. And the mortgage deduction
| was/is intended to promote home ownership. I could go on.
| Someone can disagree with some of the choices around tax
| rates and certain weirdly specific deductions. But most
| people wouldn't argue that, for example, encouraging people
| to donate to charities is a _bad_ thing.
| drdeca wrote:
| There are some people who are weirdly anti-charity, saying
| that all of it should be done through taxes? I don't
| understand their point of view.
| [deleted]
| ryandrake wrote:
| Thread drift, but my objection to encouraging charitable
| giving is that the more you rely on charity to fund the
| public good, the more you rely on (largely) millionaires
| and billionaires to decide what counts as a public good.
| In other words the average citizen doesn't get to vote on
| what good gets funded. This means givers' pet causes get
| funded rather than projects that are democratically
| chosen.
| drdeca wrote:
| It is possible (even likely) that I've misunderstood
| people who were just being hyperbolic and didn't mean to
| be taken literally, but my impression was that some were
| saying that literally no charity organizations should be
| necessary? I (somewhat..) understand the "but then the
| wealthy are determining what gets done" thing, as a
| reason to not rely too much on it, but it seems clear to
| me that there are also major inefficiencies in having to
| go through a consensus process of government democracy,
| rather than people simply acting in smaller groups,
| independent of a larger consensus, to further charitable
| causes. It seems clear that there are cases where
| charities work better than govt programs alone, and it is
| a clear error to think that all charities would be better
| handled as a govt service, even if some would be better
| handled by one.
|
| Hmm, if the government were to run a quadratic funding of
| charities thing, with only rather limited requirements
| for eligibility, perhaps that would somewhat alleviate
| the "undemocratic" complaint? (It would have to make it
| illegal to pay someone else to participate in your stead
| though.)
| zimpenfish wrote:
| > all sorts of tax deductions over the years to incentivize
| things like [...]
|
| But plenty of other countries have those too and manage to
| not have an insanely complex tax-filling regime?
|
| > but it's not that simple
|
| I think if the main difference between the US and other
| countries is the aforementioned "corporate bogeyman", it
| probably does boil down to being that simple.
| anonisko wrote:
| Basically, the tax code is used by governments as an
| incentive mechanism to manipulate entities into behaving in
| ways they want.
| briandear wrote:
| https://m.youtube.com/watch?v=TruCIPy79w8
| peter303 wrote:
| Not Turbox, but Congress. They promise new credits and
| deductions every election cycle. Every couple decades there
| are weak attempts to weed out some of these such as for the
| Reagan and Trump tax reforms.
| yunesj wrote:
| I didn't see evidence in the linked article and the cited
| article therein that Intuit tried to prevent a simplification
| of the tax code. They just tried to stop the government from
| trying to build competitor software (partially paid for by
| Intuit and others in the tax accounting industry). Frankly,
| it sounds like a PITA to have IRS calculate your taxes with
| poorly written software, and then have to challenge it.
|
| I think it's unlikely that Intuit has the power to steer the
| complexity of the tax code. States like NY and CA, for
| example, oppose a standardization of tax law for "road
| warriors" because they make so much money from non-resident
| workers who step foot in their state.
|
| US tax policy is about 70,000 pages (mostly regulations,
| bulletins, and case law). And that doesn't include state and
| local taxes.
|
| If you stop being an easy case, for example you want to claim
| FEIE within 5 years of spending > 30 days in the US, then the
| IRS tells you to get a lawyer to pay for a private letter
| ruling. This is because, where other countries don't tax
| their citizens income worldwide, the US does and then gives a
| moderate exemption. AFAIK, US tax code complexity dwarfs that
| of any other country.
|
| I find it hard to believe that it's TurboTax's fault, a day
| after reading about Sen. Warren's plan for a wealth tax and a
| $100B to the IRS to help them calculate and enforce it...
| kennywinker wrote:
| > Frankly, it sounds like a PITA to have IRS calculate your
| taxes with poorly written software, and then have to
| challenge it.
|
| That's not how the proposed systems work. The proposed
| system is: gov sends you a notice "here is your filled out
| tax return based on everything we know about you" and then
| you look over the return, make any modifications you
| believe are correct, and send it to them. You're not
| "challenging" something.
| yunesj wrote:
| > and then you look over the return, make any
| modifications you believe are correct, and send it to
| them
|
| Or more likely, they send you their estimate, based on a
| tiny fraction of the tax code, you recalculate it from
| scratch, send it to them, and then they audit you.
|
| Civil disagreements with the IRS start under the
| assumption that the IRS is correct (e.g., "your cost
| basis is zero," or "that wasn't a valid deduction"), and
| then you must prove to them that they are wrong.
| kennywinker wrote:
| Again you're describing something very different from
| what is being suggested - and this is not a weird
| experimental theory - MANY countries have deeply complex
| tax codes and have also implemented an auto-file system
| where LARGE portions of the population can file in
| minutes due to a pre-filled return.
|
| I've yet to hear any stories where anything like your
| nightmare scenario has actually happened. Perhaps you
| would not be part of the group who could rely on a pre-
| filled return - and you would still have to file
| manually, but nobody is proposing taking that option away
| or even making it harder than it already is.
| yunesj wrote:
| > Many countries have deeply complex tax codes.
|
| Can you give an example of any country whose tax code is
| more than 70k pages long?
|
| Or a country where it requires, by default, taxes paid on
| money earned while living oversees, depending on a large
| number of international treaties, case law, and expensive
| private letter rulings? Or a country that requires you to
| file a different tax return in almost every state you
| step your foot in while working remotely? Or a country
| that requires you to essentially recalculate taxes on a
| quarterly basis to determine if you should be fined for
| underpaying estimated taxes?
|
| > nightmare scenario
|
| That's not a nightmare scenario. That's just a standard
| audit. They assume, e.g., zero coat basis, or residency,
| or it wasn't used for business, or ... and you have to
| prove otherwise.
| res0nat0r wrote:
| I've been using freetaxusa.com for years as an alternative,
| it only costs maybe 10-20$ to file state taxes if I remember
| correctly, and federal is free. It is much cheaper than
| Turbotax and the UI is essentially the same.
| codegeek wrote:
| Agreed. This is primarily not a "software" problem. Unless we
| simplify our tax codes in the US, tools like turbotax will
| stay. In fact, to be honest, turbotax was great when I used it
| last in 2009ish (I know they got acquired by Intuit and have
| gone downhill due to Intuit ) but the point is that it is
| overall an excellent software that really makes it easy to
| calculate and file things based on current tax codes. I would
| love to not have that dependency but that's not possible only
| when the tax codes are simplified.
| woobar wrote:
| TurboTax was sold to Intuit in 1993. Not sure why do you
| think it would get worse under Intuit, considering you liked
| it in 2009.
| codegeek wrote:
| Oh my bad then. I guess I got confused because for some
| reason, I always they were acquired after I initially used
| them. You are correct though. So I guess the software has
| always been good.
| carabiner wrote:
| It's still excellent. I just did my taxes in FreeTaxUSA this
| year for the first time and it's not nearly as good as TT
| last year. FTU is like manually filling in the IRS PDF's
| except as webforms, whereas TT imports PDF's and parses
| everything correctly, leaving you to do a quick scan. FTU is
| free because it's just a light GUI layer over the 1040 and
| various Schedule forms.
| dragonwriter wrote:
| > This is primarily not a "software" problem.
|
| This is true.
|
| > Unless we simplify our tax codes in the US, tools like
| turbotax will stay.
|
| The two _are_ linked because a lot for he lobbying comes from
| the same place, so its unlikely that one would get changed
| without the other, but there 's less essential link other
| than shared lobbying interest than you seem to think: even
| with the complexity of the system quite a lot of the
| information is already in the IRS's hands.
| asciident wrote:
| Simplifying the tax code will require removing special
| exemptions for certain interest groups. This is often
| rephrased as "raising the taxes on [group]" which gets a lot
| of pushback. For example, raising the taxes on teachers,
| native americans, certain small businesses, public servants,
| antarctica scientists, students at for-profits, etc. It's
| hard to fight against that message.
| marshallward wrote:
| Filing taxes online in Australia is free, and I'm sure it's of
| comparable complexity.
|
| This does not exist in the US the highest levels of government
| have no incentive to provide it.
| mooreds wrote:
| > This does not exist in the US the highest levels of
| government have no incentive to provide it.
|
| This is a valuable podcast episode to listen to to learn more
| about this: https://www.npr.org/sections/money/2019/04/03/709
| 656642/epis...
| sjy wrote:
| From what I can tell, the system in the US is significantly
| more complicated for individuals (mortgage interest
| deductions, 43 different state income taxes, "alternative
| minimum tax," gift tax, estate tax...)
| marshallward wrote:
| As someone who has to file both, I found that the federal
| taxes to be comparable, perhaps I'd even say the Australian
| was more complex. The games played with real estate can be
| rather complex. But what I also saw was software doing most
| of the number crunching for me, and even fetching the
| numbers from my various employers and assets.
|
| But your point about the state income tax is well taken,
| this does make it a much harder problem here than in
| Australia.
| Cd00d wrote:
| And the full capabilities of TurboTax still aren't that great.
| I never felt _confident_ that I was interpreting every question
| properly.
|
| As soon as my tax situation got even the slightest bit complex
| I started using an accountant. They use TurboTax, I'm pretty
| sure, but they also know all the questions and what they really
| mean and can answer my questions on what the tax impact of
| various situations I encounter might be. They also go to bat
| for me if I have an audit.
|
| Not only do I consider that far more valuable than the
| $500/year it costs, but I'm also confident my tax savings more
| than cancel the expense.
|
| Just my experience, but I recommend a tax accountant to all
| adults.
| dllthomas wrote:
| Not that I expect it to succeed, but I wonder what would happen
| if you tried throwing machine translation at the raw tax code.
| bob1029 wrote:
| What if we rewrote the tax code _with_ code? There are many
| high level languages (especially functional ones) which could
| address this problem domain really well if we had the courage
| to start completely over.
|
| Imagine a legal document that is written using terminology
| that is ultimately just a series of higher-order functions. A
| human could make sense of it with some training, and a
| computer could directly execute it with determinism.
| lallysingh wrote:
| I think if there was a basic extensible system, that could grow
| into a full product. Start with 1040EZ in year 1, then grow
| with your customers' needs as they age and need more.
|
| TT has a large moat but behind it must be a ton of technical
| debt.
|
| Would an open source solution work here?
| jnwatson wrote:
| You're imagining an army of tax accountants to continually
| keep a system up to date to put themselves out of business?
| lallysingh wrote:
| They use software too. Their competition is turbotax.
| Larrikin wrote:
| There's atleast one Show HN every year that does that and
| promises support for the more complicated cases "in a few
| months".
| transfire wrote:
| Younger me would say, "Or we could actually simplify and fix the
| tax system!". Older me unfortunately knows just how corrupt the
| whole thing is, thus has no hope for such honorable dreams, and
| is sad.
| ldbooth wrote:
| This sounds like a great project once the US revises it's tax
| code. And a lot of wasted of time should it be revised to
| incorporate digital tools available today (like Mint transaction
| categorization). It's unlikely to be revised in the near term,
| but I have hope that throuh some bad economic or social upheaval,
| we may see some appetite to increase US GDP in a real way and
| decrease the wealth disparity by simplifying tax filing in a real
| way.
| totaldude87 wrote:
| Ok am curious.
|
| Why people hate TurboTax so much ? Is it because its a monopoly
| (or) does it uses any predatory practices (or) kill other
| companies that tries to compete.
|
| Disclosure: I used TurboTax to file this year's taxes and kind of
| like their UI and ease of use (for top $ of course):|
| alex_g wrote:
| All of the above. Yeah TurboTax is great because they make it
| easier to do something nearly everyone hates to do and doesn't
| understand. So most people don't care about why Intuit is a
| terrible company because TurboTax is their only option and it
| works well.
|
| Intuit has excessively lobbied the US government to prevent
| simplification of the tax code, they struck a deal to offer a
| free option in return for the IRS not developing their own
| alternative, and then deceptively hid access to the free option
| so that users are tricked into purchasing it anyway.
| frockington1 wrote:
| People don't like TurboTax becauseof their advertising and
| lobbying tactics. They target income levels that can file for
| free online and spend money 'lobbying' the government to allow
| the practice to continue. That being said, I use Turbo Tax and
| love it. The clean UI made filing take 90 minutes despite
| having several property and other transactions this year.
| alteria wrote:
| The other comments provided a great overview, but I would
| really recommend read ProPublica's reporting about them [1]
|
| Some very brief highlights:
|
| - They use dark patterns and other trickery to prevent people
| from filing for free (the vast majority of Americans can file
| for free via IRS free-file), instead directing them to the
| "free" up-sell laden product
|
| - Lobbying against literally anything that would make filing
| taxes easier or cheaper. It doesn't have to be this way (and
| it's not in many countries), but it's how they make their
| money.
|
| [1] https://www.propublica.org/series/the-turbotax-trap
| bajsejohannes wrote:
| Not only do they kill other companies, but they kill the
| government's ability to compete. As is mentioned in other
| threads, many countries don't have this tax filling non-sense
| at all. The government just says: Here's what we're basing your
| taxes on; let us know if there are any mistakes.
|
| It's absurd to spend ones time and money to file taxes only to
| have the government punish you because you didn't get the right
| answer.
| justicezyx wrote:
| People misinterpret TurboTax.
|
| Turbotax is a by-product of US tax law which gradually morphed
| into a wealth hiding and manipulation engine.
|
| Can you kill turbotax? Possibility.
|
| Can you avoid having an inherently anti human tax law, and
| therefore eliminate the soil of turbotax? Unfortunately no.
| legitster wrote:
| I just want to point out that this article is using a really bad
| definition of monopoly. There are about a dozen if not more ways
| to file taxes, and just because one is the most most popular and
| gets a bigger slice on the bell curve doesn't mean it has a
| monopoly.
|
| It bugs me a little because I keep seeing the definition of
| monopoly becoming less and less meaningful.
|
| I think the argument, if anything is the opposite: there are
| dozens of tax filing software, they all more or less do the same
| thing, and all the resources get wasted on marketing against each
| other. So I think I would prefer an _actual_ monopoly! And if the
| government won 't make it, why not make an open source one that
| can drive the for-profit ones out of business!
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