[HN Gopher] IRS Free File is now available for the 2024 filing s...
___________________________________________________________________
IRS Free File is now available for the 2024 filing season
Author : segasaturn
Score : 186 points
Date : 2024-01-24 17:01 UTC (6 hours ago)
(HTM) web link (www.irs.gov)
(TXT) w3m dump (www.irs.gov)
| photonbucket wrote:
| Why is there an income limit? There would be plenty of simple
| returns from people with a high income with just a single w2
| taking a standard deduction
| Alupis wrote:
| Also note, this is simply the Federal Tax Return.
|
| For no limit IRS Free File, just use FreeTaxUSA[1]. Not only
| will it be better quality than whatever the IRS/Gov has turned
| out, not only is it Free (as-in Beer for IRS Filing), but it
| also offers very cheap State Filing options ($15).
|
| Just use FreeTaxUSA...
|
| [1] https://www.freetaxusa.com/pricing
| whitepoplar wrote:
| The only thing keeping me from using FreeTaxUSA is its
| inability to import brokerage transactions/1099-Bs. As far as
| I'm aware, if you input 1099-B summaries (as opposed to
| individual transactions), you have to mail physical copies of
| all 1099s to the IRS.
| agrajag wrote:
| You can attach pdfs of brokerage transactions to your
| e-filed return (and FreeTaxUSA prompts you to do so in the
| filing section)
| SlavikCA wrote:
| I just completed my filing with FreeTaxUSA yesterday.
|
| Which included 1099-B, because I got RSUs and sold them.
|
| I manually entered the info about stock sale. And the end,
| the webapp told me, that IRS requires the copy of 1099-B,
| so I need to upload it. I uploaded PDF, which I got from
| Fidelity. That's it.
| quickthrowman wrote:
| IIRC, you can now attach electronic copies of your
| brokerage statements to your return instead of mailing it
| to the IRS. I believe it changed for the 2022 tax year, I
| did have to mail in my complete 1099-B with transaction
| history in 2021 and before.
| mminer237 wrote:
| You essentially only have to mail physical copies of your
| transaction histories if you had wash sales. (I'm not your
| lawyer tho)
| emchammer wrote:
| For this sort of thing, I would rather use a .gov website
| than a .com.
| teeray wrote:
| There are many folks who reflexively append .com to
| everything. Even if it redirects to .gov someday, depriving
| fraudsters of the .com is absolutely worthwhile.
| FireBeyond wrote:
| My email address is firstname@lastname.me. The amount of
| times I've dealt with customer service... "We have your
| email address as firstname@lastname.me.com" or similar is
| notable.
| jaimehrubiks wrote:
| Couldn't agree more. I used it last year and it was awesome
| (I didn't find any feature missing). In any case, it's one of
| the "IRS Free File participants" according to the OPs link.
| Alupis wrote:
| > In any case, it's one of the "IRS Free File participants"
| according to the OPs link.
|
| Indeed, but without the $79,000 AGI maximum.
| cobrabyte wrote:
| Yeah, I've used this for the past couple of years and will do
| so again this year. It's solid.
| toomuchtodo wrote:
| Using the IRS' option (Direct File) [1] [2], if able, shows
| uptake, which will be used to gauge success and continued
| operation and improvement. If you can use it, you should. It
| is how for profit tax prep gets driven to the margins, and is
| eventually sunset (except for perhaps the most complex
| returns).
|
| > Just use FreeTaxUSA...
|
| That is how the status quo remains. Hasn't served us well to
| be honest. Of course, use FreeTaxUSA to avoid paid options if
| you don't fall into the IRS pilot criteria. But if you fall
| into the criteria, please consider participating.
|
| [1] https://www.irs.gov/about-irs/strategic-plan/direct-file
|
| [2] https://www.irs.gov/about-irs/a-closer-look-at-the-irs-
| direc...
|
| (i want my tax filing provided by the IRS directly, and as
| frictionless as possible; ymmv)
| Alupis wrote:
| > Using the IRS' option, if able, shows uptake, which will
| be used to gauge success and continued operation and
| improvement. If you can use it, you should. It is how for
| profit tax prep gets driven to the margins, and is
| eventually sunset (except for perhaps the most complex
| returns).
|
| FreeTaxUSA is part of the IRS' free filing program, except
| it exceeds the IRS standards by offering free Federal
| Filing for any AGI... no maximum.
|
| FreeTaxUSA is _already_ marginalizing tax filing software.
| It cannot get cheaper than _free_. Additionally, they 're
| the cheapest/easiest State Filing system I am aware of.
|
| > > Just use FreeTaxUSA...
|
| > That is how the status quo remains. Hasn't done very well
| for us tbh.
|
| This is exactly how the status quo _is destroyed_.
| FreeTaxUSA provides the same outcome as vastly more
| expensive software and /or tax preparation services, at no
| cost to you for Federal Returns.
| toomuchtodo wrote:
| We're simply at an impasse because you prefer the non
| government option, and I expect my government to provide
| it.
| Alupis wrote:
| I don't believe you actually are aware of what you are
| talking about. There is no government option currently,
| except manually filling out forms.
|
| Furthermore, it is naive to believe the government will
| provide better service and/or usability than a private
| organization who's entire existence and purpose is to
| make submitting tax returns easy.
| khuey wrote:
| > There is no government option currently
|
| There's the IRS Direct File pilot that is being talked
| about ...
| piperswe wrote:
| IRS Direct File is tax filing software created by the IRS
| - by the government. That is the government option.
| aesh2Xa1 wrote:
| Unless they edited, they're talking about Direct File and
| not Free File. The former IS a software provided by the
| government.
|
| https://www.irs.gov/about-irs/a-closer-look-at-the-irs-
| direc...
| Alupis wrote:
| > Unless they edited
|
| Yes, they have edited their comment since my response.
|
| Even still, Direct File is a joke. Available in only 12
| states, and excludes anyone with business income, "gig
| economy" income, itemization, retirement/savings credit,
| and childcare credits.
|
| It also does not cover state filing either... so you get
| to experience the joy of doing your taxes twice.
|
| It simply does not compare with FreeTaxUSA, or even paid
| offerings.
|
| https://www.irs.gov/about-irs/strategic-plan/direct-file
| semiquaver wrote:
| It's a pilot. Nothing big can change except via
| incremental steps.
| gamblor956 wrote:
| _There is no government option currently, except manually
| filling out forms._
|
| That's weird. I've been using the government option to
| e-file returns for clients for years.
|
| Your recommendation _uses_ the free government option to
| file returns for individuals.
|
| _it is naive to believe the government will provide
| better service and /or usability than a private
| organization who's entire existence and purpose is to
| make submitting tax returns eas_
|
| Given the existence of ISPs, it is naive to believe that
| a profit-motivated company will be interested in
| providing any sort of usability or service benefit unless
| they are required to do so as a competitive edge.
|
| The existence of this new free option will make your
| preferred option _even better._ Why are you fighting
| this?
| LeifCarrotson wrote:
| From your first link:
|
| > _The Direct File pilot will be available to eligible
| participants in these states:_
|
| > Arizona
|
| > California
|
| > Florida
|
| > Massachusetts
|
| > Nevada
|
| > New Hampshire
|
| > New York
|
| > South Dakota
|
| > Tennessee
|
| > Texas
|
| > Washington state
|
| > Wyoming
|
| > _The pilot is not an option for you if you did not live
| in one of the 12 participating states in 2023._
|
| Cali, Texas, Florida, and New York are some of the biggest
| states, but most Americans aren't eligible.
| toomuchtodo wrote:
| ~145M potential taxpayers across the states you list is a
| fine pilot program population to start with (out of 331M
| people in country). Walk, then run. As your pilot moves
| into a fully operationalized state, you then have
| customer support and engineering capacity to work out
| edge cases. I don't see a problem; I see the beginning of
| success. You have to start somewhere.
|
| https://en.wikipedia.org/wiki/List_of_U.S._states_and_ter
| rit...
| FireBeyond wrote:
| I thought one of the reasons for this was more about
| state tax models, moreso than anything else.
| tomcar288 wrote:
| I've been using them for a couple of years for now and I
| think they're awesome!
| yieldcrv wrote:
| > adjusted gross income (AGI) of $79,000
|
| everything about the IRS is a hint saying learn how to read our
| regulations to take more deductions
|
| AGI is income after most deductions
|
| I've had 7 figures of revenue before and would still be able to
| use this during that year
|
| The President even sent me those one-off stimmies because my
| AGI was under the threshold
|
| get your agi lower
| criddell wrote:
| What are some deductions that many of us would be missing?
|
| I fill out my taxes and I never have enough deductions to
| itemize.
| yieldcrv wrote:
| there is very little that a W-2 employee can do if thats
| the only thing they do, aside from depreciating real estate
| and mortgage interest
|
| if your goal is to earn and park money in a bank account,
| the government is trying to tell you to do literally
| anything else by taxing that the heaviest. their aggregate
| goal is for velocity within the economy because that is
| more useful for the government than its tax revenue, and so
| that is rewarded.
|
| so its not really useful for me to write tax deductions
| that likely don't apply to you
| rurp wrote:
| Your earlier post would have been more helpful if you'd
| specified that you're only talking about a tiny minority
| of the working population. "Lower your agi" sounds like
| you're making a general recommendation.
| yieldcrv wrote:
| it is a general recommendation as the observation is that
| if more of the population educated themselves in this
| field and structured their life accordingly, more of the
| population could have the same flexibility in lowering
| their agi at their discretion
|
| right now, it is a tiny minority of the working
| population that does anything preemptively for tax
| purposes, it doesn't have to be that way.
| bombcar wrote:
| In pursuit, they can go to the 1040 schedule 1 and read
| it: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf -
| specifically look at lines 11-23, 25:
| https://www.irs.gov/pub/irs-pdf/f1040s1.pdf
|
| "Normies" can probably take advantage of 20 pretty
| easily, if you don't already.
|
| The "normal" way to adjust AGI down is to be a business
| and just not pay yourself as much and cycle everything
| back into the business.
|
| But, remember, the goal is to maximize after-tax
| gains/revenue, not minimize taxes. You can minimize taxes
| by minimizing income!
| yieldcrv wrote:
| > But, remember, the goal is to maximize after-tax
| gains/revenue, not minimize taxes.
|
| yep. most of the things I like to do will satisfy that.
| people generally don't understand that the IRS is not
| this adversary that's waiting to be offended because they
| didn't get anything, when a lot of offices of the IRS
| basically helps you not pay them. Have to know how it
| functions and that requires education.
| seadan83 wrote:
| A CPA friend of mine stated that software engineers are
| pretty screwed when it comes to taxes, they pay the highest
| effective rate. In effect, when you are in the $125k to
| $250k ballpark, you're at a high tax bracket but not making
| enough to take advantage of the things that allow (for
| example) Warren Buffet to have an effective tax rate of 11%
| [1]. So, in the shoes of a typical software engineer, their
| effective tax rate is ballpark 30~35% and their deductions
| are pretty minimal.
|
| One example my CPA friend gave was landlords getting it
| good. They can both deduct depreciation and also repair
| costs - double dipping! Further, any interest on real
| estate loans they have are also tax deductible. I don't
| know of more specifics personally, the impression my friend
| gave me was that those examples are just the beginning.
|
| [1] https://www.forbes.com/sites/janetnovack/2011/10/12/war
| ren-b...
| yieldcrv wrote:
| correction: _W-2_ software engineers that don't do
| anything else are pretty screwed
|
| 1099 software engineers have some of the best tax
| deductions, and that earnings range is the sweet spot
|
| one of my favorite things to do is contribute $66,000 to
| a 401k for that tax deduction (thats how high the employ
| _er_ match limit really is), immediately borrow $50,000
| from the 401k and donate that same money to a donor
| advised fund for a charitable donation. $116,000 tax
| deduction before looking at actual expenses. its not
| advice, its one of my favorite things to do, you have to
| pay back the 401k over time
|
| off $265,000 in earnings (number chosen because thats the
| minimum to max out a self directed 401k) the AGI would be
| $199,000 and the MAGI would be $149,000. keep going and
| get it as low as possible. I would typically try to do a
| FMV charitable deduction from my existing portfolio.
| Combined cash+asset charitable deductions can lower that
| year's earnings by 60%. if you achieve that the
| government is only looking for taxes on $106,000 and
| again this is before you look for expenses. But if there
| are pre-existing externalities like a mortgage and home
| depreciation, then you're pushing your AGI (and
| subsequently MAGI) down further and further.
|
| you can get to Warren Buffett %'s pretty easily even
| without having long term capital gains tax treatment.
| coldpie wrote:
| Oofda. I just pay my taxes and live my life. Whatever
| makes you happy, I guess.
| PopAlongKid wrote:
| >you have to pay back the 401k over time
|
| And you are also permanently out $50K of charitable
| contribution in just a single year. Pretty hard to
| justify if you have young kids who might go to college
| some day, or if your spouse doesn't wish to contribute to
| charity at that level.
|
| And somewhere in your example you seem to forget that
| charitable contributions reduce taxable income, but not
| AGI.
|
| Lastly, you forgot to take into account the deductions
| for self employed health insurance, and the deduction for
| half of self-employment (SUTA) tax, both of which reduce
| the amount available for retirement plan contributions.
| yieldcrv wrote:
| money not really out of your control if you have a donor
| advised fund or private foundation or both
|
| my comment mentions MAGI specifically for someone like
| you, I'm aware this thread started off with being able to
| use the IRS' free filing software and now is talking
| about not paying the government much or anything in taxes
| PopAlongKid wrote:
| >money not really out of your control if you have a donor
| advised fund or private foundation or both
|
| Not sure what you mean by "control", but you are not
| getting it back. In one year, you have blown a $50K hole
| in your budget that you will never be able to spend on
| anything else.
| gamblor956 wrote:
| I always find it amusing that people will give up tens of
| thousands or hundreds of thousands of dollars so they can
| save a few thousand in taxes.
| PopAlongKid wrote:
| >They can both deduct depreciation and also repair costs
| - double dipping! Further, any interest on real estate
| loans they have are also tax deductible.
|
| Either your CPA friend is ignorant (since after all not
| all CPAs specialize in income tax) or you misunderstood.
|
| Depreciation is how the cost of placing a new asset in
| service is spread over time to match the income generated
| by the asset (roughly speaking). Repairs are the cost of
| keeping existing in-service assets in normal operating
| condition. There is no double dipping.
|
| As for mortgage interest, only interest on the loans used
| to acquire or improve the property are deductible, not
| cash-out equity loans. This is basically the same rule
| that owners of their own principal residence get to use,
| although there are some temporary limits that can reduce
| the full deduction, especially for those in areas with
| expensive houses for sale.
| seadan83 wrote:
| > Either your CPA friend is ignorant (since after all not
| all CPAs specialize in income tax) or you misunderstood.
|
| I might have misunderstood, but he was keeping it simple
| for me. I'm 100% positive that he was correct though, to
| what angle - I'm not exactly sure.
|
| After doing some more research on my own, I think the
| double-dipping stands. In essence it comes down to a
| statement like this: "my property is worth less year over
| year - look, the shingles are starting to come off! Oh,
| by the way, I spent $2000 fixing the shingles."
|
| So, first, let's tackle depreciation. For rental, the
| entire property value depreciates and this is tax
| deductible. It's about 3% of the property value every
| year [2], regardless of any repairs. If there is an
| improvement made, that changes the cost basis [2, 4]
| which then changes the size of the pie where 3% is then
| taken out of that [2]. In essence, the IRS, per the tax
| code, essentially thinks that a rental property after 25
| years will be worth nothing. To some extent, this makes
| some sense, appliances wear out, buildings do need
| maintenance and eventually they are re-modeled and re-
| done.
|
| But, repairs & depreciation _are_ mutually exclusive for
| the tax code, so long as that repair does not enter the
| 'improvement' territory. So, if you fix all of things
| that are depreciating, you still get to claim the
| depreciation overall, and you get to claim the repair
| costs of those depreciating items.
|
| These are the resources I used:
|
| [1] https://www.irs.gov/businesses/small-businesses-self-
| employe...
|
| [2] https://www.investopedia.com/articles/investing/06081
| 5/how-r...
|
| [3] https://www.nolo.com/legal-encyclopedia/tips-
| maximizing-repa...
|
| [4] https://www.nolo.com/legal-encyclopedia/top-ten-tax-
| deductio...
|
| [1] is interesting and has this key quote:
|
| > You can deduct the costs of certain materials,
| supplies, repairs, and maintenance that you make to your
| rental property to keep your property in good operating
| condition
|
| Note, it does not say "or" repairs, and that list does
| not include improvements. Basically this is to say, a
| $100,000 property after one year of renting, to the IRS
| is worth $97,000 - whether or not there was actually
| $3000 worth of wear and tear is immaterial, and if you
| spent $3000 to fix that wear and tear is also immaterial,
| you get to claim the depreciation and repairs both.
|
| The [4] reference really emphasizes why land lords do not
| want to replace things, and instead will focus on
| repairs:
|
| > Landlord Tax Deduction #3: Repairs A significant tax
| break for landlords can arise when they make repairs to
| their properties: The cost of repairs to rental property
| (provided the repairs are ordinary, necessary, and
| reasonable in amount) are fully deductible in the year in
| which they are incurred. Good examples of deductible
| repairs include repainting, fixing gutters or floors,
| fixing leaks, plastering, and replacing broken windows.
|
| For some completeness, resource #4 addresses depreciation
| as the 2nd bullet point right before repairs:
|
| > Landlord Tax Deduction #2: Depreciation for Rental Real
| Property The actual cost of a house, apartment building,
| or other rental property is not fully deductible in the
| year in which you pay for it. Instead, landlords get back
| the cost of real estate through depreciation. This
| involves deducting a portion of the cost of the property
| over several years (27.5 years for residential real
| property). Landlords can reap the benefits of
| depreciation even if the property increases in value.
|
| Thus, my conclusion - if a person is fixing everything
| that is breaking and wearing out in a rental property - I
| don't see how exactly that property is depreciating by 3%
| every year. The depreciating things are getting fixed! I
| would call that double dipping. Reasonable people might
| still disagree.
|
| Though, to the larger point, resource [4] has a section
| "Other Important Tax Tips for Landlords", reading through
| that list is a whole slew of things not available to W2
| employees, eg: "A special tax rule permits some landlords
| to deduct 100% of their rental property losses every
| year, no matter how much." Taken in aggregate, tax-wise,
| it seems FAR better to be a landlord than a W2 employee.
| (A peer comment noted that 1099 get really great tax
| treatment, and that's basically the gist of it. If you
| can claim you are own your own boss - the tax breaks are
| huge, otherwise for the run-of-the-mill W2 - there are
| lot less tax breaks).
| PopAlongKid wrote:
| I assume by "double dipping" you mean, deducting the same
| expenditure twice.
|
| There still is no double dipping. If you buy a $100K
| asset, and over its depreciable life you also spend $15K
| on repairs, then you have spent $115K in total and you
| only deducted $115K, not a penny more -- so no double
| dipping. Also, FWIW, if you later sell the fully
| depreciated asset, the entire sale price is taxable
| income.
|
| >A special tax rule permits some landlords to deduct 100%
| of their rental property losses every year, no matter how
| much.
|
| Yes, if one qualifies as a "real estate professional"
| (not easy for anyone who is not a full-time landlord).
| However, a successful real estate professional is not
| going to stay in business long if they have large losses
| every year.
| PopAlongKid wrote:
| >AGI is income after most deductions
|
| No, it is not. As the name implies, it is gross income,
| adjusted for certain (but nowhere near most) deductions.
|
| Itemized (or standard) deduction is subtracted from AGI to
| arrive at taxable income. Also, a temporary provision for
| something called QBI might be deducted from AGI to arrive at
| taxable income.
| keltex wrote:
| If you just have W2 income, there's no reason you can't fill
| out the regular 1040 form yourself. Sure might take you an hour
| or so, but no software to purchase. Just costs a stamp to mail
| it in!
| tialaramex wrote:
| The _online_ forms don 't have an income limit, so you don't
| even need a stamp.
| madboston wrote:
| This is true. The thing that most people won't appreciate is
| that taxes that are not done online are processed at a very
| slow pace. Most people don't try to optimize their
| withholding in a way to get close to 0 tax returns and won't
| be willing to wait long times to get any kind of returns. We
| all are paying cost of capitalism.
| akerl_ wrote:
| It seems odd to be willing to give the government a loan
| over the course of the year, in the form of
| overwithholding, but then not be willing to wait a few more
| weeks to get the payout. If somebody is impatient to get
| their hands on that money, why not fix their W-4 so they
| get it with every paycheck?
|
| (Also, as noted in the parallel comment, the forms can be
| submitted online, separately from the Free File service)
| madboston wrote:
| Well most people are just not literate when it comes to
| finances. They are not aware of what withholding means,
| how to calculate things. I'm sure it's not simple to do
| when you are working multiple jobs, or temp jobs in
| between (well these won't be those simple W 2 scenarios
| we are talking about).
|
| We are know that the tax codes are intentionally
| complicated and big firms don't want government to fix
| them. Rules being complected allows having loopholes for
| certain people.
| akerl_ wrote:
| I think we're talking about different, related things.
|
| The tax code in the US (and the filing process) is
| overcomplicated for a variety of political, corporate,
| and cultural reasons.
|
| The average US taxpayer is under-educated on finances
| generally and tax code specifically.
|
| That said, the W-4 is one area that's actually gotten
| simpler in recent years. I simultaneously think the tax
| code needs serious simplification and that the average
| person has the capacity to read a W-4 and get reasonably
| close on their withholding. The reason many of them don't
| is because they _like_ getting a refund check once a
| year.
| moate wrote:
| Government: _creates a byzantine tax code to allow the
| richest /most competent avoiders keep their wealth while
| consistently over-targeting lower-income groups for
| audits_
|
| For profit tax-co's: _do back door deals with the
| government to prevent lower-income /competence
| individuals from working directly with the gov't while
| engaging in dark patterns to make the lower cost products
| harder to use/find_
|
| This guy: It's the citizen's fault and they get what they
| deserve for having other priorities than wealth
| management!
|
| I think it's fair to assume that all users want taxation
| to be as close to 0 overage as possible while also
| wanting all overage returned as quickly as possible.
| Anyone not working towards that sucks and is the
| universal enemy.
| akerl_ wrote:
| I'm not sure what you're talking about.
|
| I know plenty of people who do not want their tax return
| to be close to zero. They like getting a big refund check
| back. This is the kind of person being described in the
| comment I replied to.
| ghaff wrote:
| There's a whole cottage industry painting refunds and
| spending them as a windfall and a good thing.
| madboston wrote:
| I have seen some people on reddit admit that they are bad
| at managing finances month to month and would rather have
| that big refund come back that they can use to pay off
| debt or something. I know it sounds counter intuitive,
| but whatever works for individuals man.
| ghaff wrote:
| I doubt the cottage industry is focused on debt
| reduction. That said, forced savings techniques can
| certainly make a lot of sense even if they're financially
| suboptimal.
| hot_gril wrote:
| If I don't get the refund quickly, I don't trust that
| I'll get it ever. Things can fall through the cracks, and
| support dwindles for older tax returns.
| MarkSweep wrote:
| If you only have income from one W-2, two if you are
| married, yes it is easy. But if you have any variability
| in your income, it's hard to predict how much you tax you
| are going to owe. Not every income supports withholding
| (i.e. savings accounts) and the way you can set
| withholding varies by income source (W-2 supports a
| dollar amount per paycheck, RSUs often use a percentage).
| So getting the right combination of withholding settings
| to cover your tax liability across all income sources can
| be tricky.
| akerl_ wrote:
| The overwhelming majority of US taxpayers do not have
| RSUs or enough savings for a 1099-INT to impact their
| taxes.
| SamuelAdams wrote:
| Just a caveat: in 2020, processing paper returns was
| considerably more delayed than digital submissions. If you
| want your return to be processed quickly, digital is almost
| always faster.
|
| https://www.gao.gov/blog/more-delays-ahead-pandemic-
| continue...
| bombcar wrote:
| I have a form telling me about the interest the IRS sent me
| because _amendments_ to forms are almost always paper-sent,
| and it took so long to process my additional return that
| they owed interest on it.
| bluGill wrote:
| If this makes a difference to you then you should adjust
| your withholding so you get less back. There are better
| ways to save than a tax refund.
| coldpie wrote:
| I agree, but instead of paper, use the free file fillable
| forms the IRS provides to submit it digitally. Link will be
| up here in a few days: https://www.irs.gov/e-file-
| providers/free-file-fillable-form...
| shortrounddev2 wrote:
| Because the tax preparation services lobbied the federal
| government to make it illegal for the US government to offer
| its own filing service.
|
| I like 1040now.net. The UI is atrocious but it basically just
| offers an HTML version of the actual IRS forms. If all you need
| is a 1040 and a W2, then you just fill those out and skip the
| rest of the forms. I've been using it for several years. It
| costs $20 to file your federal returns if you make more than a
| certain amount, and it also offers State tax filing as well
| geor9e wrote:
| Because Intuit Turbotax lobbyists take congressmembers out on
| their yachts, and our representatives aren't interested in
| saving the country's citizens money
| jrockway wrote:
| I think it's more like that 50% of representatives think that
| taxes shouldn't exist, so by making taxes an annual pain
| point, they are increasing their own support. "If it wasn't
| for That Other Party we wouldn't have you paying $39 to
| Intuit every year, but that's all they do, subsidize Big Tech
| with your Personal Information."
| nielsbot wrote:
| Turns out it's all of the above
| naniwaduni wrote:
| It's a coalition with more support than either of you
| think!
| paxys wrote:
| Because TurboTax and H&R Block need that corporate welfare
| check from the government in order to survive.
| FuriouslyAdrift wrote:
| "Those with an AGI over the limit can still file their return
| for free using Free File Fillable Forms."
| wnevets wrote:
| > There would be plenty of simple returns from people with a
| high income with just a single w2 taking a standard deduction
|
| Probably the same reason large companies don't launch new
| features to their entire userbase all at once.
| bnabholz wrote:
| This is free filing with "trusted partners," but the IRS also
| has their Free File Fillable Forms (not open yet) which have no
| income limit. The UI is a little rough, but matches the
| official IRS forms.
|
| I got mad enough paying H&R Block a couple years ago and
| decided to download the fillable PDFs and do it manually. It
| was a good learning experience. Since I'm filling out the PDF
| forms anyway I wish I could just upload those to FFFF, instead
| of having to re-enter everything manually.
|
| Still it's better than my state (Indiana) where I can't file
| online without a third party. It does bring me some
| satisfaction that I fill out the PDF forms, print them, mail
| them to the state, and someone gets to (probably) type it all
| back in to a computer. Efficient.
| jcranmer wrote:
| AIUI, this is the result as a compromise. Instead of the IRS
| creating its own free tax prep software, the existing tax prep
| industry had to make their offerings free for people under a
| certain income threshold.
|
| Of course, the tax prep industry engaged in all sorts of dark
| patterns to make actually obtaining the legally-required-to-be-
| free software for free as difficult as possible, so the IRS is
| now working on its own free tax prep software (which is the
| Direct File system, not the Free File system).
| pshiu wrote:
| The original intent of the program seems to be a quid pro quo,
| where the IRS promises a non-compete with the tax preparation
| industry [1] in exchange for free federal tax prep for 70% of
| U.S. taxpayers [2].
|
| As of 2019-12-26, the IRS no longer promises the non-compete
| [3], perhaps so it could start the Direct File pilot [4].
|
| ---
|
| [1]: From the summary of the proposed original agreement at htt
| ps://www.federalregister.gov/documents/2002/08/08/02-1983...:
|
| > The Consortium will offer Free Services to taxpayers at no
| cost. [...] During the term of the Agreement, the IRS will not
| compete with the Consortium in providing free, online tax
| return preparation and filing services to taxpayers.
|
| [2]: "70%" source: see 4.1.3(i) of latest MOU:
| https://www.irs.gov/pub/irs-efile/ninth-memorandum-of-unders...
|
| +info: https://www.irs.gov/e-file-providers/about-the-free-
| file-all...
|
| [3]: Point (ii) of https://www.irs.gov/pub/irs-
| utl/FFI%20Signed%20MOU%20Addendu...
|
| [4]: https://www.irs.gov/about-irs/strategic-plan/direct-file
|
| see also: https://news.ycombinator.com/item?id=37920633
| glasshug wrote:
| Is this meant to reply to a different comment?
| assassinator42 wrote:
| I've used Cash App Taxes (previously owned by Credit Karma) for
| several years. No income limit and free state taxes as well:
| https://cash.app/taxes
| dawnerd wrote:
| I suspect it's more to ease into letting people file for free
| by cutting out "higher risk" filers. The income cap pretty much
| guarantees everyone filing falls into a simple class that
| doesn't need itemized returns.
| Ajay-p wrote:
| To pop up Intuit, makers of Turbo Tax. Lower income people are
| still more likely to go to a tax preparer service than to
| attempt to file their own. The idea of doing your own taxes is
| a middle class and up ideal, or those who are more likely to
| have the education and training to do their own taxes.
| jeffbee wrote:
| Having the qualification be based on AGI is an absurd usability
| problem for people on the margin. AGI is the _outcome_ of doing
| your tax filing, not the input!
| burkaman wrote:
| Yes, presumably that is intentional by the tax industry
| lobbyists. You Google "what is my agi" and the first result is
| from TurboTax, you try to read that but keep getting distracted
| by all the big buttons that say FREE, so you click one of those
| and end up getting conned into paying Intuit.
| hot_gril wrote:
| TurboTax is sometimes actually free for the federal return,
| just not very clear when that is. Kinda like IRS Free File.
| al_borland wrote:
| This is how I feel about the income limits for Roth IRA
| contributions as well.
| mzi wrote:
| That you are charged to file your taxes are the most American
| thing ever. Over here you just sign your prefilled return via
| your phone and be done with it.
| iouwhldkfjgklj wrote:
| Are you European?
|
| I'm European. I've lived in the US a couple of years.
|
| The thing is.... you're NOT charged to file your taxes. Filing
| your taxes is free. People have the _option_ to pay a company
| that helps them file their taxes.
|
| The peculiarity of the US isn't that you're charged but that
| the government's own system is shit (which is why many people
| choose to pay). This isn't uniquely American. I'm sure there's
| other countries where filing your taxes is a pain - though
| maybe not in Europe (?).
| paxys wrote:
| The complexity of these forms combined with the fact that
| getting them wrong is a felony means that filling them out
| without any help is out of reach for the vast majority of the
| population.
| antisthenes wrote:
| Getting them wrong is certainly not a felony.
|
| In the vast majority of cases the IRS will just send you a
| letter asking you to pay what you owe.
| hot_gril wrote:
| With fees, which can be steep, and you might have to
| dispute what you owe, and the return payment might get
| lost... But yes, not a felony.
| basil-rash wrote:
| Getting them wrong isn't a felony. Refusing to pay after
| they inform you you were wrong might be a felony.
|
| But they won't tell you you were wrong for a few years,
| during which time interest accrues.
|
| (Source, just paid 5k in taxes+interest for the 2021 year
| after IRS sent me a letter saying my stock selling profit
| calculations were off by 4.5k. I think they were wrong (I
| was certainly wrong too) but I can file an update and get a
| refund on my next taxes if so. Better to stop the interest
| accessing while I figure out my bases)
| Analemma_ wrote:
| > the fact that getting them wrong is a felony
|
| Why do people keep repeating this? It's so obviously wrong
| I can't believe that saying it can be anything other than
| bad faith. I have miscalculated my taxes twice now: in both
| cases, the IRS sent me a letter explaining the mistake and
| what I still owed, I wrote them a check for that amount,
| and that was it. No "felony" or even the faintest hint of
| one was in play. The letters even had an apologetic tone
| and suggestions for how to set up payment plans, as well as
| multiple ways to dispute the charges.
| ghaff wrote:
| Because it satisfies their narrative that you're
| basically forced to use tax prep (human or machine) to
| file and therefore the fact that you can actually do so
| for free is a false choice.
| wyre wrote:
| It might be similar to the inverse of xkcd.com/1043 (Ten
| Thousand), in that something has been repeated so many
| times people believe it to be true. Thinking about this
| more I'd bet the myth that miscalculating your taxes was
| an exaggeration based on anti-tax rhetoric.
| aljabear wrote:
| the government's own system is shit, because Intuit has an
| interest in keeping it shitty. If it weren't, like other
| modern countries, you wouldn't pay them to help you with it.
| So they lobby heavily to keep the government from modernizing
| its system.
|
| https://www.propublica.org/article/inside-
| turbotax-20-year-f...
| jupp0r wrote:
| Germany's system is shitty without Intuit. They don't have
| a monopoly on this.
| lotsofpulp wrote:
| I would not say it is shit. Free fillable forms is pretty
| easy for 99% of people. You start filling it out, and there
| are pdfs of all the instructions available next to the form
| you are filling out.
| michaelmior wrote:
| > the government's own system is shit (which is why many
| people choose to pay)
|
| The reason the government's system has historically been
| terrible is because of lobbying on the part of Intuit (maker
| of TurboTax) and others.
|
| There was a great episode of Patriot Act a few years ago that
| discussed this: https://www.youtube.com/watch?v=7xQQkzWhMOc
| itake wrote:
| Are capital returns taxed? if so, how?
| hervature wrote:
| I don't know why you are being downvoted. I think it is a
| very reasonable question to ask how the government can pre-
| populate capital tax forms without being notified of sales.
| If the onus is on you to send in the sales documentation
| throughout the year, then I would not say this is as simple
| as "signing on your phone". If a company handles it for you,
| then you are paying for that service. I would even to go so
| far to say that your employer being forced to maintain an
| accountant to send in your income tax forms is not free to
| you.
|
| The point being made is that anything beyond income tax is
| essentially impossible to automate since the government
| cannot (and I believe should not) track your cost side. For
| instance, the solar tax credit in the US is a scout's honor
| type form where you can put whatever cost you want to claim
| that are eligible without receipts. If you get audited, you
| better hope you can conjure those receipts. How could the
| government automate such a form?
| PaulDavisThe1st wrote:
| On the order of 10% of US taxpayers have anything beyond
| the income that is reported on a 1040.
|
| There is no need for the obvious, public, easily accessible
| tax filing system to be designed around the needs of that
| 10% (I am in that 10%, btw).
| danans wrote:
| > The point being made is that anything beyond income tax
| is essentially impossible to automate since the government
| cannot (and I believe should not) track your cost side.
|
| Since 2008, brokerage firms are required to include sales
| and their cost basis information on 1099-B forms. There's
| technically no reason these couldn't be electronically
| transmitted to the IRS in a standard format.
|
| https://www.finra.org/investors/insights/cost-basis-and-
| your...
|
| > For instance, the solar tax credit in the US is a scout's
| honor type form where you can put whatever cost you want to
| claim that are eligible without receipts.
|
| This is true, but as you say, the consequences of an audit
| and discovery of the fraud are meant to deter it.
|
| > How could the government automate such a form?
|
| Create a website where the solar installer registers the
| installation and enters the cost information of the
| project, and the taxpayer claims the record and associates
| it with their tax records. They are already doing something
| like this for car dealers for the EV tax credits:
|
| https://www.irs.gov/credits-deductions/register-your-
| dealers...
| itake wrote:
| Other examples would include selling items in garage
| sales. How will the government automatically account for
| selling of a rare watch or vehicle sales? What about
| crypto sales and airdrops?
| ghaff wrote:
| Vehicles have titles so I wouldn't count of that not
| being tracked in some way. At least in MA
| occasional/isolated sales of things "acquired for
| personal or household use."
|
| I imagine that for really expensive sales, the answer is
| consult with your accountant.
|
| And of course lots of things happen with cash as long as
| the amounts aren't too great.
| hervature wrote:
| Part of the reason I dislike giving examples is that
| people think the argument hinges on the examples. The
| point of my argument is that notifying the government of
| everything (1099-B in this example) as it happens live
| and settling at tax time with determined calculations
| sent to you by the government is the same complexity of
| maintaining your own records throughout the year then
| notifying and settling at tax time. The key part I'm
| emphasizing is that the hard part of taxes is collecting
| the information and knowing what is taxable. Not the
| calculation. If you think that taxes are hard because you
| need to multiply line 17 by 0.3 and then take the minimum
| of line 19 and 20, then we are not discussing the same
| thing. Again, pretending that businesses maintaining an
| army of accountants and filing the relevant information
| for you as part of their service is "free" and
| "automatic" then we do not see things equivalently.
|
| A segment of the population believes that the
| responsibility is on the government to prove you filed
| incorrectly. Giving them the authority to collect
| whatever information they want on you is an issue of
| privacy. Personally, I'm opposed to businesses sending
| the government all your information not because I want to
| make life harder for myself/others at tax time but
| because I don't believe the information will be used only
| for taxes. The solar example was meant to emphasize the
| point that the government can only automate the process
| if every single purchase is marked and accounted for.
| Giving them the authority to track all purchases (both
| digital and physical) or mandating others to record said
| purchases sets a dangerous precedent. Hopefully we could
| agree on that.
| danans wrote:
| > Again, pretending that businesses maintaining an army
| of accountants and filing the relevant information for
| you as part of their service is "free" and "automatic"
| then we do not see things equivalently.
|
| I'm not arguing that it's free. Nor am I arguing for
| sending information about every trade someone makes to
| the IRS. I'm arguing that since they have to generate a
| summary 1099-B anyways, why not just transmit it to the
| IRS electronically? There's no change in privacy, since
| presumably today you'd follow the law and submit the
| information from your 1099s to the IRS anyways.
| dudul wrote:
| You're only charged by a 3rd party if you hire them to handle
| your taxes. If you deal with the forms yourself and mail it
| it's free.
| anderber wrote:
| I think the issue is that our taxes are so complex that we have
| to pay a 3rd-party to do it for most of us.
| TedDoesntTalk wrote:
| This. Tax regulations are thousands of pages. And if you own
| a business, there's no way you're going to be able to run the
| business and become a tax filing expert.
| mynameisvlad wrote:
| I mean, sure, there can be complicated cases, but for the
| _vast_ majority of people doing person taxes, a 1040EZ is
| all you need and it's like 2 pages.
| ksherlock wrote:
| 1040EZ (and 1040A) were phased out in 2018, apparently
| because the standard 1040 form was simplified (and, yeah,
| it's 2 pages). But your larger point is 100% correct.
| PaulDavisThe1st wrote:
| There's no 1040EZ anymore. Just FYI.
| michaelmior wrote:
| But for most people (although perhaps not most of the HN
| crowd), taxes aren't terribly complex. And in theory, the IRS
| already has the majority (if not all) the necessary
| information needed to file taxes. But Intuit and others lobby
| to make this more difficult.
| bluGill wrote:
| Our taxes are not that complex and for most they have never
| been than complex. Reagan's tax reforms greatly decreased the
| complexity, and Trump's reforms made them massively easier
| for most people. (you can think what you want about both
| president's but they both made reforms that made taxes much
| simpler)
|
| 3rd parties convince you taxes are complex via underhanded
| tricks, but that doesn't mean they are. There is a reason tax
| software puts lots of delays in - they want to you think your
| computer needs time to do the complex calculations. There is
| a reason tax preparers interview you and then don't give you
| the taxes filled out instantly - they want you to think there
| is a lot of hard work left. Has your tax preparer ever told
| you that some tax deductible things are not worth deducting
| or did they just look at and ignore the receipt - that is a
| way to make taxes seem complex.
|
| If you own a small business your taxes might be complex.
| However most people have been fooled into thinking their
| taxes are harder than they really are.
| ghaff wrote:
| Certain aspects of the tax code for "normies" who are on
| the higher income side has probably gotten more complicated
| at various times. (Or not, see the increase in the standard
| deduction.) But I'm willing to bet that if you went back to
| the 60s or even the 70s, you'd find filling out taxes
| wasn't appreciably easier and a far smaller fraction of
| people went to accountants--and of course tax software
| wasn't even an option. Nor were home calculators.
|
| I'm guessing it's far more about the rise of shopping mall
| tax prep than Intuit lobbying.
| bluGill wrote:
| My taxes got much simpler after Trump's reforms -
| suddenly the standard deduction was large enough that I
| didn't have to itemize everything (to get the mortgage
| interest deduction) I'm not old enough to have done taxes
| before Reagan's reforms, but I'm told things got a lot
| easier then because a lot less things were deductible and
| so there was less lines to fill out.
| ghaff wrote:
| It was probably pre-Reagan that if you really wanted to
| optimize you kept track of every sales tax receipt and
| piddly charitable contribution and probably other things
| I forget. Now there's no reason for most people to do it
| and most people with big enough deductions to qualify
| probably can't be bothered with the nickels and dimes.
| slg wrote:
| One of our two political parties here has the stated goal to
| make paying taxes as difficult and manual a process as possible
| in order to turn public sentiment against the very idea of
| taxes. The belief is that if paying your taxes was automatic
| and easy, there would be little pushback to tax increases.
| hot_gril wrote:
| Where do they state that? Higher taxes aren't really more
| complicated to pay.
| bluGill wrote:
| If taxes are simple you don't realize how much they are.
| These people want everyone to write a check on April 15th
| every year for the full amount - having to come up with
| more than $10,000 on short notice is very hard for most
| people. They don't like withholding because people pay
| attention to the bottom line and so they don't notice the
| hundreds of dollars missing form each pay check.
| ghaff wrote:
| It's very unlikely that someone with a mostly salary W-2
| with even remotely sane deductions is going to get a
| $10,000 bill out of the blue.
| bluGill wrote:
| If there was no withholding that is a reasonable bill for
| a lot of people. If you made $70,000 then that is about
| what your taxes deductions like 401k)
| ghaff wrote:
| Well, yes, if there's no withholding and if withholding
| is not an option someone sort of needs to be aware of
| that fact and even be paying estimated quarterly taxes.
| It _shouldn 't_ be a surprise and there may even be a
| penalty past some point.
| bluGill wrote:
| The point is there are some people who want to make that
| the default. No withholding, no quarterly estimated
| taxes. Every April 15th you pay the IRS your full tax
| bill. it would make people aware of just how much they
| are paying.
| somekyle2 wrote:
| Grover Norquist, prominent conservative voice and head of
| Americans For Tax Reform has talked about the danger of
| government provided filing services, namely that he
| believes it leads ultimately to increased taxes. The idea
| is that if the govt is saying how much you made, how much
| you owe, and just giving you a place to click "OK", it's on
| the tax payer to do the math to disagree, and the govt has
| incentive to find you owe more. And, taxes are less visible
| and easier, so if taxes go up or policies change, all the
| americans just confirming and hitting "Pay" aren't going to
| notice or be mad. Or, something like that.
| slg wrote:
| >Where do they state that?
|
| It is a policy that goes back decades. Reagan was notably
| adamant that "Taxes should hurt" to the point that he
| opposed the very idea of withholding taxes. He was the
| reason that California was the last state with an income
| tax to start automatically withholding taxes.
|
| >Higher taxes aren't really more complicated to pay.
|
| That isn't the argument. The idea is that the more painful
| the tax paying process is, the more likely Americans will
| oppose the very idea of taxes. It is very simple form of
| Pavlovian conditioning. Preparing taxes is a painful and
| awful process and people naturally associate that with the
| very idea of taxes.
| hot_gril wrote:
| Got it, thanks
| sneeze-slayer wrote:
| Note: the fillable forms (which do some basic arithmetic for you
| but are still the general tax forms) don't seem to be available
| yet. These are the only "IRS Free File" option available if your
| AGI is over $79,000.
|
| https://www.irs.gov/e-file-providers/free-file-fillable-form...
| mkasberg wrote:
| Who's eligible for IRS Free File?
|
| > Taxpayers, including active-duty military, with an adjusted
| gross income (AGI) of $79,000 or less in 2023 can likely find an
| offer from an IRS Free File provider that matches their needs.
| Some providers also offer free state tax return preparation.
| Those with an AGI over the limit can still file their return for
| free using Free File Fillable Forms.
| jeffrogers wrote:
| So I assume these "trusted partners", who aren't charging for the
| service, are somehow in the data collection racket?
| esbranson wrote:
| Bingo! Has anyone read their terms of service?
| overstay8930 wrote:
| This is going to be useful to almost nobody, who is going to
| willingly sign up for a program that doesn't even work with their
| home state?
|
| It's going to have to be rewritten with another billion dollars
| spent so it can "integrate" with state systems, which will be so
| broken and insecure the IRS will probably discontinue it and then
| just partner with turbotax or something after it gets breached
| for the 5th or 6th time.
|
| Most people here have never seen how government software is made
| and it shows. There is a reason the NWS does not make a weather
| app, and it is because it was too obvious how much of a scam
| government software was when it came out to be in the millions to
| make.
| uticus wrote:
| As someone who files with the IRS, I would prefer an easy tax
| code over an easy way to file.
|
| Messy tax code = +time/money required, +scared will be prosecuted
| for messing up something unintentionally, +loopholes available,
| +hire some more IRS staff & police
|
| Easy & clear tax code = -time/money required, -scared will be
| prosecuted for messing up something unintentionally, -loopholes
| available, -hire some more IRS staff & police
|
| (apologies for those who make their living via our complicated
| tax system. If you're in the IRS, I appreciate those who have
| been helpful but like cancer treatment centers I wish there
| wasn't a need for you)
| bigfryo wrote:
| Yeah I agree but obviously the Congress is taking all sorts of
| bribes from the tax return lobby in order to make the code
| increasingly more and more complicated every year and thereby
| extort more money from us every year, the worst part is the
| psychological fear generated by this torturous tax return
| extortion system
| semiquaver wrote:
| > scared will be prosecuted for messing up something
| unintentionally
|
| Just to provide a data point on this, I have screwed up my
| taxes twice and been contacted a year later or so by the IRS
| with a letter informing me about the discrepancy and how much
| they thought I owed. In both cases (each time due to options
| cost basis issues) I hired a pro to refile and paid the extra
| tax plus a small penalty.
|
| The IRS has pretty good customer support and gives people
| plenty of opportunity to correct mistakes. No one is getting
| prosecuted unless they are willfully and persistently evading
| taxes.
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