[HN Gopher] Claiming high user satisfaction, IRS will decide on ...
___________________________________________________________________
Claiming high user satisfaction, IRS will decide on renewing free
tax site
Author : wslack
Score : 155 points
Date : 2024-04-27 18:30 UTC (4 hours ago)
(HTM) web link (www.washingtonpost.com)
(TXT) w3m dump (www.washingtonpost.com)
| nneonneo wrote:
| I did my Canadian taxes for me and my spouse on a free filing
| site last night, in less than two hours, for $0. Everything was
| prefilled; practically the only thing I had to fix was to convert
| an imported investment statement from USD to CAD, and double
| check that everything was accurate.
|
| I welcome the Americans to the delightful convenience of hassle-
| free taxes!
| balls187 wrote:
| It is bonkers that the IRS cannot prefill information for the
| majority of Taxpayers.
| idle_zealot wrote:
| This last year when filing my taxes with a paid turbotax
| product some value was auto-filled and looked about right.
| After submission I was notified that the IRS rejected my form
| because the field was wrong. They did not correct the field
| or otherwise communicate what they believed the value should
| have been. Tracking down what number they actually wanted
| there was a hassle. So... they have on file what they expect
| your taxes to be, will reject your filing if you get it
| wrong... but won't just use their gathered values to do your
| taxes. Very frustrating.
| majormajor wrote:
| Huh, I've never had my filing rejected but I've had the IRS
| send me letters a couple times. Once a year or two later,
| the other time (last year) a few weeks later or so before I
| got the refund: each time they told me exactly what they
| thought I'd missed.
|
| Which still highlights the absurdity of making me re-enter
| the stuff they already know.
| sokoloff wrote:
| In most cases, you know the information (and may have to
| file) before they've processed it. Request your tax
| account transcript (what they know about your account) on
| April 15 and again on August 15. I can pretty well
| guarantee they'll be different for the prior calendar
| year.
|
| It might be stuff they'll eventually know, but it's not
| necessarily stuff they already know at the relevant time.
| ghaff wrote:
| I don't typically get 1099s until in February. I suspect
| wouldn't get you pre-filled tax forms until late March.
| loeg wrote:
| They'll send you a letter with the wrong value and the
| value they think is correct. And if you agree, you usually
| don't have to take any action (beyond maybe paying more).
| ITB wrote:
| They could. They just want you to confess the things that are
| harder for them to track. So they pretend they know more than
| they do.
| loeg wrote:
| Well, they can; that's the service the article is discussing?
| kernal wrote:
| So this free site was not run by the government of Canada. Are
| you concerned that you just gave all of your personal and
| financial data to a third party site? If you're not paying
| anything they're likely data mining your data and selling it.
| And we haven't even talked about the security implications of
| trusting your data to these companies.
| kanbara wrote:
| that's how free file works in the us....
| web3-is-a-scam wrote:
| My employer submitted all my T4 information to the CRA. My
| investment services submitted all my tax forms to the CRA.
|
| UFile downloaded everything for me, autofilled my return,
| submitted it online back to the CRA and charged me $30 for the
| privilege. LMAO
| willcipriano wrote:
| > less than two hours
|
| > hassle-free taxes
|
| That's still a crazy demand on the time of someone paying for
| everything. My bank, my employer and my brokerage all report on
| me, the IRS should be able to just mail a check or a bill most
| of the time.
| klyrs wrote:
| "Less than two hours" does sound like a lot. I'm also in
| Canada and spend about 10 minutes per year on my Canadian
| taxes.
|
| Settling with the US government as an expat, on the other
| hand... I pay handomely for somebody to handle that.
| nneonneo wrote:
| I have a bunch of USD-denominated stuff for which my
| brokerage doesn't always issue complete tax slips for, so it
| required going over my statements to double check that
| everything was being accounted correctly.
|
| My wife's (uncomplicated) taxes basically took 15 minutes.
| You do always want to check to make sure that you've hit
| every tax deduction you can - for example, work-from-home
| deductions, donation deductions, even things like paying for
| news subscriptions gets a tax credit. That's the sort of
| thing that doesn't get reported to the CRA, but which you can
| claim tax deductions on.
| kelthuzad wrote:
| wait until turbo tax comes in hot with their lobbying efforts -
| didn't they manage to prevent or diminish a free tax filing
| service already a few years ago?
| lolinder wrote:
| As I understand it, this system exists largely because
| ProPublica shined a light on how corrupt the TurboTax deals
| were and the IRS couldn't pretend they thought everything was
| okay anymore. I'm hopeful that the IRS knows that we're on to
| it and doesn't get cozy with them again.
| dsr_ wrote:
| The IRS is not 'cozy' with Intuit, HRB, etc. The IRS is
| underfunded by political design. All of this crap is the
| fault of corporate lobbyists and the politicians who take
| their money.
| saulrh wrote:
| For people who aren't aware of this, the IRS is so
| underfunded right now that funding IRS enforcement has an
| ROI of between five and nine, that is, for every dollar we
| put into funding the IRS it would be able to claw back _up
| to ten dollars_ in unpaid taxes. That 's the kind of number
| that you usually only see on "the next Google" type unicorn
| startups. It would take eighty billion dollars, invested
| over ten years, to fund the IRS to the point where
| diminishing returns bring the ROI back down to reasonable
| levels; those eighty billion dollars would return almost
| 200 billion dollars in newly collected taxes. Almost all of
| that would come from high-wealth taxpayers, large
| corporations, and partnerships, which are currently very
| under-audited due to lack of resources - the audit rate is
| currently lower for high-wealth entities than it is for
| random poor people simply because auditing people with a
| lot of money is complicated. The current audit rate is
| currently _dramatically_ below where it was twenty years
| ago.
|
| Source: https://www.cbo.gov/publication/57444
| tootie wrote:
| I think that was a bit oversimplified, the Free File program
| was problematic in a lot of ways, but it's not like the US
| government was just sitting on their own free file system
| that was locked behind a vault. They had to actually make the
| thing and it was never a given that they'd be able to do it.
| When the private companies said they'd offer their services
| for free to prevent the government from taking on the expense
| and hassle, it was sensible trade off. When the tax prep
| industry got greedy and overplayed their hand, they got
| bitten and are now in deep trouble.
| jimbob45 wrote:
| I like TurboTax. It just works, year after year. The fee is
| worth the peace of mind that I wouldn't have by letting a
| government program lose my submission accidentally.
| loeg wrote:
| I switched from TurboTax to FreeTaxUSA this year and it was
| almost exactly the same (in some ways easier). The amount
| owed was identical. The IRS doesn't lose submissions and
| provides a very clear system for tracking the status of
| eFiled taxes.
| ryandrake wrote:
| I did the same thing, but from TaxAct instead of from
| TurboTax. The big tax prep software companies have squeezed
| their last dollar out of me. I'm done with them.
|
| For reference, here's what I paid for tax preparation over
| the years:
|
| 2010: $9.99
|
| ...
|
| 2017: $48.00
|
| 2018: $66.95
|
| 2019: $97.90
|
| 2020: $67.91
|
| 2021: $93.67
|
| 2022: $124.90
|
| 2023: $133.95 (at this point I said "Fuck this")
|
| So from $48 to $134 (or +280%) over the course of 6 years
| and +1344%(!!!) over the course of 13 years. All to simply
| pre-fill some standard IRS forms and submit them for me. It
| doesn't make sense to pay for this.
| delfinom wrote:
| "That's the secret"
|
| Those tax prep companies like TurboTax spent a lot of
| marketing dollars on making it seem they are finding you
| secret deductions and other crap. There isn't. It's all
| pretty straight forward.
|
| Some of it comes from the pre-online era where tax
| accountants did and still do commit fraud by falsely
| claiming deductions for individuals. And you eventually
| hear of a hundred million dollar IRS fraud arrest.
| hiddencost wrote:
| Gotta be honest, the "government is unreliable" crowd are not
| people I think of as honest. Government works fine, and for
| less money, if you actually try to make it work.
| j33zusjuice wrote:
| They're not. They take all the funding away, push for our
| tax money to go toward things that don't help the
| overwhelming majority of citizens (and probably a similar
| number actively disagree with where taxes go, like bombing
| other countries), and then they create businesses to
| extract money from private individuals. They use it to
| create completely absurd and wasteful private industries
| for the soul purpose of making money. They aren't solving
| problems, they're exploiting problems they've created by
| undermining the government.
| latency-guy2 wrote:
| How unquantifiable.
|
| The standard that government organizations run off of is
| "use up all the budget, or else your budget gets cut the
| next year". Are you going to lie and say that is not the
| case?
|
| Be honest.
| matwood wrote:
| I assume TT is doing the same efile process that any other
| program does. My CPA even uses efile.
| CogitoCogito wrote:
| Currently Turbotax is electronically submitting the
| government and you're okay with that, but you think that if
| you electronically submitted to the government in a system
| specifically designed by the government for the government
| that it would be a higher likelihood of the submission
| getting lost? The system with using the government is only
| removing one of the independent pieces here. How can you not
| conclude that the likelihood of problems wouldn't decrease?
| sn9 wrote:
| I hated giving my money to Intuit so they could lobby for our
| complicated and unnecessary tax filing system.
|
| I qualified for using the IRS free option this year and I'm
| so happy and I hope I never go back.
| 2four2 wrote:
| I didn't qualify to use the site, but it's definitely a step in
| the right direction. Everyone agrees that doing taxes should be
| free and easy, like nearly every other country...
| tmountain wrote:
| It's amazing that 54% of adults in the United States have a
| literacy below 6th grade level, but it is expected for the same
| population to have the financial literacy to file their taxes
| accurately. Going further, the IRS already knows the details of
| most people's taxes before they file, yet everyone is expected to
| complete what amounts to a complex task for many people. I cannot
| fathom why it is still done this way.
| jrockway wrote:
| > it is expected for the same population to have the financial
| literacy to file their taxes accurately
|
| I assume most people have too much money taken out of their
| paycheck for taxes, so the net result is that the government
| takes in extra money.
| SV_BubbleTime wrote:
| Agreed, this is not a problem they want to solve.
| tomrod wrote:
| Sure "they" do.
| tadfisher wrote:
| Withholding too much is literally required under the law. If
| you don't withhold enough, at tax time you could be liable
| for penalties unless you also pay quarterly to make up the
| difference. This counts for _all_ of your income, not just
| the income from a W-2 job.
|
| Fixing the withholding system to account for the real world
| would go a long way toward simplifying reporting and would
| improve compliance.
| boolemancer wrote:
| > Withholding too much is literally required under the law.
| If you don't withhold enough, at tax time you could be
| liable for penalties unless you also pay quarterly to make
| up the difference.
|
| You only need to withhold 90% of the taxes you owe to avoid
| an underpayment penalty, so you don't need to withhold too
| much.
| thegrim33 wrote:
| I guess it was originally done this way because in the past
| people actually had some semblance of privacy and the
| government didn't actually know a great deal about people's
| income.
|
| Eventually, privacy was eroded away year after year to the
| point where the government now knows an extreme amount about
| each citizen.
|
| I guess I'd refrain the question - instead of asking why do we
| need to do taxes when the government knows everything about us
| that they could do it for us, should we really have that little
| privacy? Maybe instead of changing the way we file taxes, we
| change the way the government is intimately entangled with our
| lives?
|
| Of course, those ideas, liberty and privacy, small government,
| etc., isn't really fashionable with the latest generations and
| most people would gladly give up their freedom and privacy to
| save having to fill out some paperwork.
| janalsncm wrote:
| Liberty and privacy are fashionable. The problem is that our
| Congress passes hundreds of pages of domestic spying
| legislation in the middle of the night. It's not exactly the
| School House Rock democratic process we learned about in 4th
| grade.
|
| But that's really beside the point. If you are like millions
| of other Americans filing W2s, the fact that you work for
| your employer isn't a secret. Your salary isn't a secret.
| Most people will take the standard deduction. There's no
| reason why that can't be the default. It's not a privacy
| violation for the IRS to use that info to make peoples lives
| easier.
| akira2501 wrote:
| > the fact that you work for your employer isn't a secret
|
| I would prefer if it was. It's even worse than that, the
| government has entitled itself to be a party to every
| transaction over $600, so even the self employed have to
| shoulder this unseemly burden.
|
| > Your salary isn't a secret
|
| It is. It's a shared secret. Again, I would prefer if I
| didn't have to do this. My salary is not at all the same as
| my "taxable income." It puts me in a position to have to
| justify my filings after the fact to an entity that only
| has access to half my relevant information.
| markofzen wrote:
| It's not a secret if your company uses any of the large
| payroll services due the Equifax "The Work Number".
| anamexis wrote:
| Don't you need to specifically authorize someone to use
| that to get your salary?
| philistine wrote:
| There never was a point in the period of time when people
| filed taxes in the US that the government wasn't entitled
| to know your salary. It used to take more time and effort
| to get the info, but better technology doesn't change the
| game, it highlights that it wasn't a << shared secret >>.
| Your employer has a ton of paperwork to file related to
| your pay.
| whatwhaaaaat wrote:
| Did you not just explain how the game changed from
| technology in your own post?
|
| Before all of this unconstitutional collection of
| Americans information the government had to have a target
| and go out and collect and tabulate the information.
|
| Now it's a select where citizen does thing x over y
| threshold. How is this not changing the game?
| pessimizer wrote:
| Only if you're defining "filed taxes in the US" as "filed
| income taxes in the US," which would make your statement
| redundant. The first income tax in the US wasn't until
| the Civil War, and only existed for the length of it. The
| "first peacetime income tax" didn't come until 1894, only
| applied to income over $4000 (2023: $126,000), and thus
| only to the top 10% of the population.
|
| Even the _constitutionality_ of an income tax was in
| question until 1913 and the 16th Amendment.
|
| People today assume the past was a lot more surveilled
| than it was. The government (at any level) often didn't
| even have a record of people's births until they needed
| to interact with the government for some reason, even in
| the early 20th century. That was largely changed by
| _Social Security,_ and people at the time and since
| complained that its foothold would begin a slippery slope
| of government intrusion into every aspect of their lives.
|
| https://en.wikipedia.org/wiki/Income_tax_in_the_United_St
| ate...
| maxrecursion wrote:
| If they got rid of all the deductions and loopholes most
| people wouldn't need to file as the only thing they'd have
| to put on their taxes is their W2 income.
|
| I believe the IRS is even informed of things like 401k
| disbursement and stock sales. Meaning most people wouldn't
| have to submit for those either.
|
| The gains of simplify the tax code are gargantuan, but
| unfortunately, the wealthy and powerful organizations
| benefit from the current system, and would be hurt
| financially by simplifying it. So, it will never be
| simplified.
| guntars wrote:
| It was the older generations that gave up freedom and privacy
| for convenience, making that choice for everyone.
| kayson wrote:
| > I guess it was originally done this way because in the past
| people actually had some semblance of privacy and the
| government didn't actually know a great deal about people's
| income.
|
| You still had to file taxes, though, so they would know about
| your income, if only a year behind. I read somewhere that tax
| withholding only started during WWII (and it was supposed to
| be temporary). It's really the withholding that would give
| the IRS the information needed to file your taxes in advance,
| so it's only a fairly recent possibility.
| nilamo wrote:
| It's not just withholding. Cost basis info on all stock
| market transactions are also provided to the IRS by your
| brokerage...
| altdataseller wrote:
| What about expenses for those that are self employed?
|
| What about rental income?
|
| What about expenses related to rental properties?
|
| Lots of things the government doesn't know...
| alistairSH wrote:
| None of which apply to the vast majority of filers.
|
| Nobody is saying filing taxes should never be necessary.
| Only that it shouldn't be necessary for most people.
|
| The flow should be... Employer and financial institutions
| send info to IRS (they mostly do already). Then, in
| January, IRS sends a "Is this correct?" notice to
| residents. If correct, no action is needed. If not
| correct, then make adjustments.
| nilamo wrote:
| 100% agree. These conversations always seem to end with
| lots of "what about"s, as if being easy for the average
| case was somehow undesirable.
| bobthepanda wrote:
| free-file is entirely voluntary. You can still submit the
| forms yourself if you want.
|
| free-file is estimated to cover 47% of Americans. we fund
| public schools even though a significantly smaller
| proportion of Americans are children. you would have a
| hard time finding any government service that applies to
| 100% of people
| troupo wrote:
| This is solved by:
|
| - IRS pre-fills all it knows about you
|
| - you log into to IRS web site to check if everything is
| correct, and provide additional data or correct invalid
| data
|
| - submit
|
| Oh look. By implementing this you may join Sweden and a
| bunch of other countries in the 21st century.
| Barrin92 wrote:
| >we change the way the government is intimately entangled
| with our lives?
|
| I've lived in Sweden where taxes are not just automatically
| filed but _every_ citizen can trivially look up anyone 's tax
| returns and nobody ever saw it as the government being
| intimately entangled with anyone's life.
|
| Privacy violation would be to look into how and on what you
| spend your money, not that everyone pays their share of
| taxes. That tells you nothing about what people spend their
| money on. Merely that they aren't avoiding paying their part.
| I don't see the problem with the government automatically
| doing my taxes or anyone being able to see that.
| RiceRichardJ wrote:
| Swedish views on privacy don't necessarily apply outside of
| Sweden.
|
| Are income levels not deserving of privacy?
| bedobi wrote:
| Is your address? Your ssn? Your phone number? In Sweden,
| anyone can look it up.
|
| https://ratsit.se
| dantheman wrote:
| of course your address, phone number, income, etc should
| all be private just because the phone companies shared
| this didn't mean it's a good idea; and they always
| provided a way to be unlisted
| ForHackernews wrote:
| > Are income levels not deserving of privacy?
|
| ... No? I don't think so, anyway. Maybe if people
| understood how obscenely unequal our society is, it would
| go part of the way toward fixing that.
| VS1999 wrote:
| That you've "lived in sweden" implies you have the luxury
| of hopping to whatever country suits you most. Nobody wants
| to hear a cosmopolitan's take on how we have too much
| privacy and how the government should be more involved in
| our lives. If the government mistreats you, you can just go
| to a nicer country.
| xu_ituairo wrote:
| Your reply feels unkind. They just said they lived in
| Sweden for a time. I don't think it implies luxury or
| that they're a wealthy jet-setting cosmopolitan. It could
| be for one of many reasons.
|
| I also don't know what's wrong with hearing the opinion
| of a jet-setting cosmopolitan anyhow.
| noodlesUK wrote:
| Around 500 million people living in the EU have that
| privilege. It's pretty common for people to exercise it
| and in no way makes you part of the jet set.
| bedobi wrote:
| Uh plenty of Sweden see that as a huge invasion of privacy
|
| Sweden also doesn't have secret ballot
|
| In Sweden, anyone can look up your address, phone number,
| social security number, your car registration etc etc
|
| This is not cool or desirable
| ghaff wrote:
| If you own property in the US, I can look up your
| address, your landline if you still have one, probably
| not that hard to find SSN, etc.
| bananskalhalk wrote:
| Secret ballot was introduced 1866 in Sweden. I think we
| were the third country in the world to do so.
| bedobi wrote:
| Sweden has never had secret ballot. The "Valmyndigheten"
| election authority themselves have criticized the lack of
| secrecy and general chaos with Sweden's ballots. But what
| do they know? They only administer the elections.
|
| Swedes have a highly developed superiority complex and
| ability to perform mental gymnastics about the flaws of
| their country and ways of doing things. No sane person
| from any other country in the world would consider a
| system where voters must, in public and under the active
| scrutiny of other voters and local election officials
| (who are themselves politicians and party members) pick
| ballots for the party you intend to vote for and then
| bring it into the "secret" booth. Any child or idiot can
| see that's not secret other than in the most distorted
| and disingenuous sense of the word.
| AshamedCaptain wrote:
| Can't you just pick ballots for more than one party
| before going into the "secret" booth?
| bedobi wrote:
| This is the most common counter, but it doesn't change
| the fact that the ballot is not secret. Again, you're
| picking ballots in public and under the active scrutiny
| of other voters and election officials, and there is a
| _strong_ and _palpable_ disincentive to pick ballots from
| the "wrong" parties, and a strong and palpable incentive
| for showing your neighbors and friends you pick only the
| correct ballots before going into the booth. Smaller
| parties have to come up with nationwide ballots
| themselves, which is often impossible. People can and do
| also vandalize, hide, throw away and illegally modify the
| ballots such that voters who show up can not vote
| according to their wishes. I have personally experienced
| TWICE having to ask the election officials out loud to
| restock the ballots for the party I intended to vote for,
| and so have countless others. I could go on. These are
| all known problems that the election authority themselves
| have pointed out should be rectified, but they never will
| be, because the system is working as intended.
| (discouraging votes for the wrong parties)
| noodlesUK wrote:
| Party affiliation, which is mandatory in some U.S. states
| for voters (e.g. Oregon) is available to anyone who wants
| to access the registration dataset from the Secretary of
| State.
| ghaff wrote:
| I assume you can also be independent though maybe there
| are implication for voting in primaries. At least in MA
| being on voting lists puts your address in the available
| registration dataset.
|
| It takes very little to deanonymize things like
| healthcare records with this information as was
| demonstrated going back to the 1990s.
| noodlesUK wrote:
| You can be unaffiliated (or a member of the confusingly
| named Independent Party) but you're right, you then can't
| vote in any primary elections.
| rufus_foreman wrote:
| >> nobody ever saw it as the government being intimately
| entangled with anyone's life
|
| Is that true? There's no one, not one person in Sweden, who
| sees that as government overreach?
|
| Scary if true.
| pembrook wrote:
| Except in Sweden, what this means in practice, is that you
| only see the income/cap gains taxes paid of ordinary middle
| class people.
|
| Rich people in the Nordics hold their wealth in foreign
| companies as retained earnings, and thus that wealth
| accrues gains/dividends tax free and remains invisible
| until they sell off a small portion for the purpose of
| buying something.
|
| It's "transparency" only for the plebs. Americans cannot do
| this, as they are subject to global tax and extra punitive
| taxation on foreign withheld earnings.
|
| Also, Swedes don't have the same level of real estate
| transparency that there is in America (property tax
| assessments put a public value on everyone's holdings in
| the US). Wealthy folks holding real estate between
| different countries in Europe makes the whole situation
| more shadowy than you might think.
| __s wrote:
| The two aren't really related. A implies B does not mean B
| implies A, ie negating B won't negate A, ie not having
| automatic tax filing won't remove the loss of privacy
|
| Might as well say "Maybe instead of changing the way we file
| taxes, we solve world hunger"
|
| (I say this while voting for small government & making
| efforts to preserve my privacy)
| Gibbon1 wrote:
| Up until WWII most working class people didn't pay federal
| income taxes.
| II2II wrote:
| > instead of asking why do we need to do taxes when the
| government knows everything about us that they could do it
| for us
|
| They cannot do everyone's taxes since what they know about
| many individuals is incomplete.
|
| > should we really have that little privacy?
|
| Put that way, the answer is no. On the other hand, virtually
| everyone demands services from their government and very few
| people want those services to be transactional (e.g. most
| people demand roads, few people want to pay based upon their
| usage of those roads). That means the government needs some
| form of revenue. For various reasons, it has been decided
| that a person's income should be a portion of those revenues.
| In order to ensure that people are paying their dues, the
| government needs to collect some information. Are there other
| ways the government could get revenues? Sure, but all of them
| are going to be problematic in some form or other.
|
| > Of course, those ideas, liberty and privacy, small
| government, etc., isn't really fashionable with the latest
| generations and most people would gladly give up their
| freedom and privacy to save having to fill out some
| paperwork.
|
| One has to be careful about generalizations. Even though a
| desire for liberty and privacy may be universally appealing,
| we would find that people's views on _what those terms mean
| varies_ from generation to generation and from individual to
| individual. Note that I said the meaning changes, not a
| person 's desire for it. As for the desire for small
| government, well, some people want small government and other
| people don't. It is a far less universal ideal.
| bobthepanda wrote:
| The anti tax republicans believe that if Americans had an
| easier time filling their taxes then they would have less
| objections to the same or higher level of taxation.
|
| https://www.npr.org/2013/03/26/175332655/what-would-the-u-s-...
| loeg wrote:
| They're probably right about that?
| yongjik wrote:
| Well, as a non-citizen US resident, having to do my own
| taxes definitely makes me think "They can't even build a
| tax filing system? What the fuck are they doing with all
| that money?"
|
| I guess the difference is that my mind immediately goes to
| "Who are those people who think government not doing its
| job properly is a Good Thing(TM), and why do Americans keep
| electing them?"
|
| It's as if a wannabe entrepreneur claiming "Capitalism does
| not work! Make me your CEO and I'll prove it to you!" - and
| then the board keeps falling for those guys.
| eastbound wrote:
| > They can't even build a tax filing system? What the
| fuck are they doing with all that money?
|
| More like "They can't even solve poverty? What are they
| doing with 2/3rd of my income?" France here. Cities have
| to build 40% of poverty housing, by law, because, well,
| we've determined that 40% people are poor.
|
| The benefit of not declaring income is not only taxes,
| but lower-rent housing as well.
| mikestew wrote:
| I've paid no tax and I've paid lots of tax. I did not care
| in either case how much I was paying in taxes (it is what
| it is). What I did care about is how much of a pain in the
| as it is. Mail me a goddamn postcard telling me how much I
| owe and be done with it.
|
| And then to find out one political party would prefer that
| I suffer so I'll vote the way they want? Yeah, fuck those
| guys, I'm voting for the other ones.
| loeg wrote:
| Yeah, to be clear, I'm not saying I agree with their
| goals. Just that making taxes more painful to file likely
| increases their salience.
| tadfisher wrote:
| The vast majority of working adults have to file a W-4,
| receive paystubs that shw exactly how much they're
| withholding for state and federal taxes, and get a W-2
| every year with the totals. The 1099 is just busywork that
| doesn't give the taxpayer any extra information. I fail to
| see how prefilled forms would fail to alert taxpayers to
| the amount of taxes they pay.
| bobthepanda wrote:
| i'm not saying that they're wrong. i'm just saying that's a
| lot of the logic.
|
| it is pretty cynical to say "i don't want to make people's
| lives easier so they better align with my political goals"
| nox101 wrote:
| Why wouldn't that be the case? People put up with raises in
| all kinds of expenses without really noticing or complaining.
| Why would it be any different with taxes?
| bobthepanda wrote:
| it is just a bit hypocritical that the anti-tax people, who
| cloak in words about small government, are opposed to a
| less intrusive form of government services that would also
| generally cost taxpayers less (since Turbotax et. al. are
| always steering users of their products into higher tiers
| they probably don't need)
|
| "we want to make your life worse so that you align with our
| political goals" is generally a terrible thing to admit to
| out loud
| nkrisc wrote:
| It's amazing how much of an idiot I felt like when we hired a
| babysitter for two days a week for about a year and then it
| came time to do things properly regarding taxes and her wages.
|
| I understand why it's important to do it properly (for the
| employee's benefit) but when I tried to look into what we had
| to do, as technically her employer, and it was nearly
| impossible for me to figure out what we had to do and then how
| to even do it (federal and state). I understand why many people
| just want to pay cash under the table. It really made me feel
| like a complete moron.
|
| If we ever do it again we'll have to just hire a payroll
| service and factor that cost into what wages we can offer, or
| structure it so that total payments remain under the threshold
| required for filing.
| loeg wrote:
| Highly recommend a payroll service for this, like Poppins. It
| costs like $50/mo for a single employee, which is rounding
| error on nanny wages, and they do all the withholding and
| state tax filing for you. Then give you instructions on how
| to fill out federal tax Schedule H on your personal taxes
| (1040).
|
| I did it manually the first time around and it was a pain in
| the ass.
| nkrisc wrote:
| Yes, I wish I had known about this before. In our case we
| weren't hiring a full-time nanny, but a regular part-time
| babysitter (16 hrs/week) just often enough that we met the
| criteria for needing to file and all that, so payroll
| services would be a more significant part of the total we
| ended up paying for wages.
| neltnerb wrote:
| Out of curiosity, what made it difficult?
|
| Not knowing what was required for sure? Figuring out how to
| fill out the 1099-MISC? Knowing how to file it with the
| IRS/state?
|
| I remember it being a bit tricky at first but once I knew the
| right form it only took a few minutes. The hard part for me
| is keeping track of rule changes.
|
| Payroll service works though =)
| sveiss wrote:
| If they're trying to follow the rules, then they can't just
| fill out a 1099-MISC.
|
| A babysitter one of the examples specifically called out as
| a household employee in the IRS guidance[1], so if you're
| doing it right you should be running payroll. That's pretty
| tricky to DIY properly.
|
| [1] https://www.irs.gov/taxtopics/tc756
| sbrother wrote:
| I can see doing this for a nanny, but surely no one is
| jumping through all these hoops for ad-hoc, hourly
| babysitting? Any of the random highschoolers or college
| kids I've used would look at me like I was crazy if I
| tried to set them up on payroll lol.
| nkrisc wrote:
| It depends on if your yearly payments to them exceed some
| threshold. There may be more to it than that, of course.
| Don't listen to me, I'm the idiot who couldn't figure it
| out.
| neltnerb wrote:
| Gotcha, thanks for the explanation. Sounds like too much
| hassle to DIY for sure, I guess their classification
| logic makes sense.
| int_19h wrote:
| Yes, most people don't comply with the law in this
| regard.
|
| Which tells you volumes about the practicality of said
| law.
| itronitron wrote:
| The complexity will vary by state. But basically you have
| to create a small business with a unique tax id, then pay
| into your employee's social security benefits.
| nkrisc wrote:
| No 1099, it needed to be a W2.
|
| What made it difficult was: finding out we needed to do
| anything at all, finding out what that "anything" even was,
| finding instructions for doing it, parsing the instructions
| and figuring out if we were reading the correct
| instructions, figuring out if the various exceptions and
| other special clauses applied, researching those, then
| figuring out how to actually do any of this, and so on, and
| then again a second time for state taxes.
|
| Nevermind going down the rabbit whole of trying to figure
| out if we need an EIN and then repeating the same discovery
| and learning process for just that small part of the whole
| entire thing.
|
| Honestly it would have been a full time job for me to
| successfully navigate it all. I don't see how it's possible
| to do without already being a CPA or accountant of some
| sort. It's an entire domain of knowledge and I had almost
| none of that knowledge. There's too much else going on in
| my life to begin to delve into all that.
|
| All this for a baby sitter 16 hours a week.
| kanbara wrote:
| > "all this for..." -- you're employing someone for 40% a
| full time duration. of course you need to do the right
| thing, ensure they get the right wage, if you need to pay
| benefis, etc.
|
| this is such a privileged position and you think you
| should've just been able to pay cash and potentially
| screw someone over?
| nkrisc wrote:
| That's not even remotely close to what I said.
|
| I went through all the trouble because I thought it was
| the right thing to do and I wanted to do right by the
| babysitter. It's why I ended up paying an accountant a
| larger lump of money than I would have liked to in order
| to get it all sorted out.
|
| Im complaining how difficult it is to do the right thing.
| Tempest1981 wrote:
| Yep, there's a thriving industry around nanny payroll
| services, if you don't want to become an accountant. Wish the
| common use-cases were streamlined for DIYers.
|
| Maybe Congress can work on this next.
| static_motion wrote:
| Non-US citizen here: you have to declare what you paid the
| nanny to the IRS? Where I'm from, only the receiving end of
| the money needs to declare how much they earned. The only
| reason we file expenses is for tax deductions. The US tax
| system has always seemed so hostilely complex to me.
| nkrisc wrote:
| It's worse than that. For example we were also supposed to
| withhold 50% of the social security tax that the employee
| is responsible for, or if we pay the full amount for them
| (which we did because we didn't know we were supposed to
| withold that), then we have to declare that as additional
| income for the employee, and more I'm sure I'm forgetting
| because I started to lose it at that point.
| headsman771 wrote:
| You don't have to do any of that. Its their job to report
| income and pay taxes. Withholdings are a "convenience"
| not a requirement. Furthermore you weren't their
| employer, they provided a service to you.
| toast0 wrote:
| The IRS seems to think a babysitter is a household
| employee [1], which makes mkrisc a household employer and
| subject to various requirements. Withholding for federal
| income tax is voluntary, but employment tax isn't
| assuming the total pay is over the thresholds.
|
| [1] https://www.irs.gov/publications/p926#en_US_2024_publ
| ink1000...
| nkrisc wrote:
| They were my employee per tax law. Domestic workers such
| as nannies are considered employees.
|
| I eventually got everything sorted with the help of an
| accountant and they confirmed this.
| worik wrote:
| > It's amazing that 54% of adults in the United States have a
| literacy below 6th grade level, but...
|
| Stop there! Really? "6th grade" is age eleven?
|
| That is mind blowing!
| LoganDark wrote:
| I wonder if they went through school and just didn't retain
| it, or if they were simply not educated at all.
| itronitron wrote:
| At this point I think of it as a jobs program. Every year we
| calculate our taxes by reading the manuals and instructions,
| fill out our tax return and submit it. I like to think that my
| literacy is above 6th grade level but every year it gets
| corrected by the IRS, and sometimes more than once.
| dlachausse wrote:
| The real issue is that taxes are unreasonably and unnecessarily
| complicated to allow politicians to pander to specific voting
| blocks (both rich and poor) at the expense of the middle class.
|
| There is no reason every legitimate employer can't send tax
| information to the IRS and the self employed can't simply self-
| report our taxable incomes. No more deductions, for anything,
| just simple graduated tax brackets. Easy for the IRS to
| calculate quickly and either send a bill or a refund by April.
| They would need a fraction of the staff they currently employ
| and we could apply the savings to the national debt.
| pompino wrote:
| The tax code is also designed to incentivize behavior that we
| wish to promote as a society. for example, directly reducing
| the tax versus tax benefits of a 401(k) and other such
| mechanisms. ultimately, the government is there to serve the
| interests of the people and society.
| dlachausse wrote:
| I understand the noble intent behind much of the tax code,
| but it has grown into a gnarly beast full of loopholes for
| the rich, and the wrong kind of societal incentives for the
| poor.
| pompino wrote:
| Is there a specific country's tax system that you look up
| to as the ideal?
|
| I see often people claim that the US tax code sucks
| (nobody is going to defend it with the rising
| inequality), but there isn't any proposal about how
| exactly to enact the changes while still keeping the
| benefits of the tax code that apply to the disadvantaged.
|
| Also, I'd like to point out that the tax code has every
| type of federal tax, administrative elements, and isn't
| just about income tax, and I'd argue that most of the
| federal tax code has nothing to do with "loopholes for
| the rich".
|
| https://www.law.cornell.edu/uscode/text/26
| dlachausse wrote:
| I would propose that we enact a graduated income tax
| system starting at 0% for the economically disadvantaged.
| It is not the job of the tax code to do anything else for
| them. We already have a plethora of state, federal, and
| non-profit agencies and organizations that provide
| targeted aid to them and are far more effective than the
| IRS could ever hope to be. The money saved by simplifying
| the tax code and thus the IRS could be better used by
| them instead.
| pompino wrote:
| I hope you realize that these federal agencies are funded
| through revenue collection - i.e tax code.
|
| Unfortunately, Your simplification isn't really a
| simplification.
| dlachausse wrote:
| Yes, the purpose of the IRS is revenue collection via
| federal income tax for funding the government with. Said
| funding can then be given to the agencies and
| organizations I mentioned in my previous comment.
|
| Simplified tax code means less tax money is spent on
| administration overhead of the IRS itself and more money
| that can go to programs like WIC, SNAP, TANF, and other
| targeted programs that are more effective aid to the
| economically disadvantaged.
| pompino wrote:
| that's a common talking point, but that is not exactly true.
| they don't know how many dependents you have, if you are
| eligible for certain tax credits, whether you use your home as
| a work location, etc., etc.
| deprecative wrote:
| If only there were a way for you to tell the IRS how many
| dependents you have. Seems like we should just scrap the
| ability for folks to fill out anything and let Daddy Intuit
| do it for us since we're all so helpless with our taxy
| waxies.
| pompino wrote:
| You're barking up the wrong tree. More than a third of
| people file their own taxes.
| binkHN wrote:
| The fact of the matter is the tax code is stupidly complex for
| no good reason. It's used to promote policy and benefits the
| wealthy (Warren Buffett has noted this numerous times). That's
| it. If the focus was on collecting taxes it would be stupidly
| simple.
| bigstrat2003 wrote:
| What's sad to me is the level of apprehension people have
| towards doing taxes. It's not that hard! The first few years of
| my adult life I did it by hand, using the paper forms. It is
| very easy to do if you can follow basic instructions, yet
| people act as if it's super difficult and requires an expert.
| wredue wrote:
| >I cannot fathom why it is still done this way
|
| *intuit has left the chat
| anon291 wrote:
| Following tax forms is so braindead simple, I honestly can't
| see how anyone can be that incapable without being mentally
| deficient enough to be under conservatorship. It's literally
| step by step "Add this" or "subtract that". If you have a
| calculator and a 3rd grade level understanding of English, I
| can't see how you'd have a problem.
| llukas wrote:
| We can have a problem with forms being on paper and not doing
| "add this" or "subtract that" automatically? It was available
| in other countries 10+ years AGO ;)
| username135 wrote:
| Why is it done this way? Capitalism bby!
|
| If you can make a market out of it, someone will.
| nox101 wrote:
| > It's amazing that 54% of adults in the United States have a
| literacy below 6th grade level,
|
| AFAICT this is a mis-interpretation. IIUC the actual study says
| "54% of adults in the United States have a literacy IN ENGLISH
| below 6th grade level". They might be highly literate in some
| other language but that wasn't tested.
| zamadatix wrote:
| This may be a misinterpretation in the study but even if
| every single multilingual person in the US was counted as not
| being proficient the number would not meaningfully change in
| context of the conversation (i.e. still above 1/3 in the
| extreme case).
| throwup238 wrote:
| Only 14% of the US is foreign born according to the last
| census so that's not enough to make up the difference.
|
| The functional literacy statistics are bad no matter how you
| dice them.
| yorwba wrote:
| How about dicing them this way: "Sixth-graders already read
| about as well as the median adult." Sounds pretty good to
| me.
|
| The shock value of the original statement derives from the
| idea that sixth-graders are basically illiterates who can
| barely function in society, but what if that's not the case
| and six years in school are actually enough to learn
| reading and writing? It's a pretty long time already. What
| further improvements are to be expected from another six
| years?
| shepherdjerred wrote:
| Someone can be US born but still have a higher fluency in
| another language.
|
| Many on the US/Mexico border fall into this category where
| they were born here but speak Spanish better than English.
| flandish wrote:
| > cannot fathom
|
| Yes you can. It's capitalism. The owners of the current system
| lobby and advertise and "manufacture consent" in keeping the
| current system because it is wildly profitable.
|
| That's really all there is to it.
| deadbabe wrote:
| If the IRS takes responsibility for filing everyone's tax
| forms, then it could potentially shift liability to them if
| they were to make a mistake. Whereas if people are filing their
| own forms, the blame can be put on the taxpayer for any errors.
| monero-xmr wrote:
| Most Americans don't do their own taxes. They go to H&R Block or
| Jackson Hewitt, and if your family makes under $60k you are
| almost certainly paying no income taxes and are receiving a
| refund via the EITC, getting a check back. So people think tax
| preparers are voodoo priests that do their incantations to get
| free money because the average person can't understand the
| jargon, can't handle forms, and the whole endeavor is
| purposefully opaque.
|
| I support free file for most people. I also support radically
| simplifying the tax code, which would make the Byzantines blush.
| bradley13 wrote:
| Just a minor comment, but: why does EITC exist? Just a hidden
| welfare payment?
|
| That out if the way, I agree with the earlier comment: why does
| the government automatically know all your financial details?
| Where is the privacy? Where is the requirement for a warrant,
| to access your private information?
| PopAlongKid wrote:
| >why does EITC exist?
|
| To relieve the regressive payroll tax (FICA) on low-income
| families.
| loeg wrote:
| FICA taxes aren't regressive.
| latency-guy2 wrote:
| "Regressive" in this context really doesn't mean
| anything, it's a label that is reached for when
| politically convenient.
|
| So I agree.
| collinmcnulty wrote:
| Regressive has a specific meaning regarding taxes. It
| means that the rate of the tax decreases with income.
| Whether a tax is regressive or not is a factual question.
| loeg wrote:
| I don't think EITC is hidden? It's just a subsidy for
| families.
| gensym wrote:
| I wouldn't describe it as hidden. It's a pretty
| straightforward form of income distribution. Compared to most
| government programs for the poor, it's refreshingly simple.
|
| If you ever work with poor families to help them navigate the
| government resources available to them, you develop a strong
| appreciation for the EITC as opposed to, say, SNAP (food
| stamps)
| int_19h wrote:
| Your income is not considered private information.
|
| One can argue whether this is desirable, but there's
| basically no way to enforce income taxes if the government is
| not aware of how much people earn.
| 0x457 wrote:
| Hilarious that the government makes some of us think that
| portion of someone's money returned to that person is a
| "welfare payment"
| LoganDark wrote:
| > if your family makes under $60k you are almost certainly
| paying no income taxes
|
| How is this possible? Where I live, you can expect to pay
| around 30% of your income as tax almost regardless of how much
| money you actually make (as long as it's above something like
| $600 a year).
| alright2565 wrote:
| Pretty easy, assuming 2 kids filing jointly. Standard
| deduction is $29,200, so effectively only $30k of taxable
| income. Of that, 23k is taxed at 10%, 7k @ 12%, or
| $3.14k/10.5% effective.
|
| Then $1.6k/kid gets subtracted due to the Child Tax Credit,
| for a net -$700 in taxes paid.
|
| Keep in mind the cost of living in the USA is higher than
| many other countries. 60k for a family of four is doable in
| most places, but it is not a life of luxury.
|
| edit: the family will also end up paying 7.65%/$4.6k in a
| separate tax for a mandatory retirement scheme (FICA)
| valicord wrote:
| -$70, not -$700, assuming the rest of your numbers are
| correct
| asadotzler wrote:
| Yes. If you and your spouse both make minimum wage and not a
| cent more, and you have two children or more, you can come
| out about even. How many two child families do you know with
| both parents earning absolute minimum wage?
| throwaway173738 wrote:
| Where do you live? In the US federal taxes are capped if
| you're below the standard deduction. You still have to pay
| social security and medicare taxes but those are about 6%.
| Some states have an income tax but most do not. Do you live
| somewhere where there is an income tax?
| ThePowerOfFuet wrote:
| https://archive.ph/caerI
| janalsncm wrote:
| Listening to Congress "debate" this made me unreasonably upset.
| If you as a sitting politician have received monetary benefits
| from a tax filing service you should not be allowed to speak.
| pydry wrote:
| That's standard behavior. The US is more plutocracy than
| democracy at this point.
|
| You can help choose the _brand_ of oligarchy that runs the
| United States but you can 't vote against it.
| klyrs wrote:
| Technically, you can vote for anybody you like, including
| yourself or Santa Claus. But no, LaRouche was never going to
| make it.
| porphyra wrote:
| Voting for one of two parties compresses the will of the
| people to a single bit.
| tlb wrote:
| And, to be fair to both sides, politicians who have received
| money from taxpayers should not be allowed to speak.
| nilamo wrote:
| Isn't that all politicians? Or is their paycheck not counted?
| oivey wrote:
| Surely the system will be better if we make it so only the
| wealthy have roles in government.
| wheelerwj wrote:
| You forgot the /s
| alemanek wrote:
| Both sides? There should be just one side; the citizens they
| are supposed to be representing. This comment kind of sums up
| how far gone we are in America.
| nathanappere wrote:
| You're mistaking corporations for people.
| rufus_foreman wrote:
| >> If you as a sitting politician have received monetary
| benefits from a tax filing service you should not be allowed to
| speak
|
| Should people who are receiving welfare benefits be allowed to
| vote?
| nathanappere wrote:
| So for you it's the same than being paid by a private
| corporation?
| rufus_foreman wrote:
| It's a conflict of interest.
| cess11 wrote:
| Right, so anyone using roads or having gone to school
| shouldn't vote?
| rufus_foreman wrote:
| I didn't say whether anyone should or shouldn't vote. I
| asked a question regarding whether people with conflicts
| of interest should be prevented from participating in a
| democratic society, through voting, or as a politician.
|
| So should that be allowed or not?
|
| I think people using roads, or schools, or getting
| welfare should be able to vote, I believe politicians
| getting monetary benefits from tax filing services should
| be allowed to speak.
|
| I mean that's a pretty harsh decision, deciding that the
| government determines who is allowed to speak. That's
| what I was responding to.
| oivey wrote:
| More or less of a conflict of interest than members of
| Congress lowering their own taxes?
| micromacrofoot wrote:
| I'm sorry are you implying that congresspeople are receiving
| monetary compensation because they live in poverty
| dotnet00 wrote:
| With voting to elect a representative, the point is to choose
| whoever you feel best represents your interests. A conflict
| of interest does not matter because the self interest is kind
| of the point.
|
| With voting on passing legislation, the point is to choose
| what best represents the interests of your constituents,
| conflicts of interest matter because they may cause you to
| not properly represent the interests of your constituents.
| Self interest is not supposed to be the point.
| Y_Y wrote:
| Yes
| int_19h wrote:
| Yes, because the laws that get passed apply to them.
| rufus_foreman wrote:
| But the laws that get passed apply to politicians also.
| int_19h wrote:
| When it comes to taxes, the problem is that politicians
| tend to be already rich enough that they need some kind
| of professional help doing taxes, so passing legislation
| that effectively forces the same onto others doesn't
| directly affect them in that sense, while it does affect
| the campaign contributions they receive from the
| companies that sell this kind of software.
| dwaltrip wrote:
| This is the entire point of a representative government.
| orthoxerox wrote:
| No, and neither should people on federal payroll.
| sublinear wrote:
| I really hope this does not affect the Free File Fillable Forms.
|
| I do not want to be forced to mail in paper forms just so I can
| do my taxes for real.
| krashidov wrote:
| Stupid question but what is the point of taxation if we don't
| care about deficits anymore?
| jrajav wrote:
| I couldn't say stupid but I could say there's a whiff of bad-
| faith arguments in the air...
|
| But of course the direct answer is that throwing the full faith
| and credit of the US (that is, in showing earnest and steady
| effort to pay off its debts, something that worldwide investors
| count on) straight out the window would immediately tank the
| value of the dollar, which wouldn't be good for anyone paid in
| dollars.
|
| If the implication is that we should not bother to run our
| finances honestly and responsibly because of some idea that the
| checks written by lawmakers aren't for things we all agree on,
| then it seems like a bit of a non sequitur. The time to decide
| on that is when we decide who writes those checks, but we have
| every incentive to commit and honor our debts after that.
| cess11 wrote:
| "Experts say a nationwide rollout could someday disrupt the
| multibillion-dollar tax preparation industry; Americans spend
| more than $200 a year, on average, to file a return using
| software or a tax preparer."
|
| This year it took me five minutes and cost whatever I pay for my
| bank account, which I used for identification. $30 maybe? I could
| have waited a bit for papers through the mail and approved with a
| SMS.
|
| Might be an OK goal for US:ian lawmakers.
| colonwqbang wrote:
| > The Biden administration announced Friday that its first-of-
| its-kind free tax filing website...
|
| In the rest of the world in many places we have been filling
| taxes directly online for many years. Sorry Americans, you did
| not invent free electronic tax filing. You are at least twenty
| years late to the party.
| asadotzler wrote:
| We've had electronic filing for probably as long as any
| country, but in the US, no corporation gets left behind so
| financial services companies get to rip us off when we
| electronically file.
| ndriscoll wrote:
| There's been a free e-file since 2009 according to
| archive.org. Looks like this was the selection of forms at
| the time:
|
| https://web.archive.org/web/20090418011703/http://www.irs.go.
| ..
|
| I've used it for years. It's just the paper forms with some
| auto-calculation built in. I've never had a company do my
| taxes for me so it's a little hard for me to even imagine the
| value-add for simple taxes. Presumably they ask for the same
| information that's on the form.
|
| I imagine Intuit is still ripping us off behind the scenes
| even if it's free at point of use, but maybe they don't get a
| good deal and are happy to do it free/cheap as long as they
| can make it have a scary enough UX to get you to pay them
| instead.
| deadlydose wrote:
| You understand context, right?
| bigstrat2003 wrote:
| One thing that the article didn't mention, which I think needs to
| be considered, is the savings if we can get rid of paper tax
| forms. Right now, the IRS has to have the staff to be able to
| process those. How much will they save there, and does it offset
| the ongoing costs of running the website?
| exegete wrote:
| Not available in my state but am looking forward to if/when it
| becomes available. I do my own taxes with the free fillable forms
| site. I would rather use this direct file service if possible.
| State of NJ has a free online site but NY does not for non-
| residents so I end up mailing in a return for them. It's silly
| really.
| MaintenanceMode wrote:
| I used this for taxes this year. It spotted three errors, fairly
| complex errors actually, and spit it back for me to fix. After
| the third submission, it was error free and my return was
| accepted. I found it pretty amazing that it caught all of that
| and so, so, so, happy I gave no money to the tax industrial
| complex for a change. The IRS should definitely continue this as
| a thing.
| egberts1 wrote:
| Really? A website under Montengro country domain?
| id.me
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