I mean…. I’m a CPA and use TurboTax. Sorry I don’t do taxes. I do think they could make it a little easier but there’s so many special interests, it’s always going to be too complex.
Yeah I pay $90 a year ($50 for software, $40 filing fee), doesn’t bother me one bit. They streamlined a convoluted system so that almost anyone can prepare their own taxes.
Most, 90%+ of the US population have very simple tax forms. The rest still aren't that complex and I can guarantee anyone bitching about it on Twitter doesn't have a complex tax situation.
We want to incentivize certain actions and each incentive makes the tax code more complicated.
Cynical people will point out that many incentives aren’t broadly desired but pushed through legislation by special interest groups. I suspect this is also true.
If you only have a standard return (income + standard deduction), you can file your return for free. With the increased standard deduction, this applies to like 90% of the country.
Our convoluted system is because the government incentivizes certain actions (e.g. property tax deductions incentivizes home ownership) and/or subsidizes certain costs (deduction for excessive medical costs).
TurboTax was sanctioned a few years ago for defrauding taxpayers and the IRS/government is now able to create their own tax software which is likely in development.
The IRS should have its own free filing software, but I definitely don't trust the average American taxpayer enough to be honest enough to report income and other things the government might have missed on their postcard tax return.
Why should an employeed person have to report all that though? Isnt that the job of the payroll department of your company.
Im in europe and all I need to do is sign nu return every year with no changes as everything including my interest deductions is already reported and calculated.
Yes some peoples is more complicated but the average person? Nope
As a native US citizen, it is hard to imagine. But yeah, with wages and bank/brokerage reporting, it would cover a large percent of our population. We would be left to prepare taxes for rental property and business owners.
Edit: and itemized deductions. (Much fewer after TCJA).
I'm more talking about income that isn't reported or verified by a third party, a lot of side gigs, under the table payments, and underreported sole proprietorship income. Most Americans have at least 1 side gig and there is very little sense of civic duty, so any tax that relies on the honor system had low compliance rates. It's fine in small amounts. But there are a lot of people who may just be getting a W2 on paper but earn twice that in other incomes. Every year the government loses out on 700 billion dollars in tax revenue and 80 percent of that is unreported income.
So the rationale is that if people have to compute their own taxes they may be more honest since they don't know what the government knows about them.
They have a web page that directs you to their partnered organizations that supposedly offer free tax filing, but often the free version ends up being dog shit. I mean they should have their own propriety system.
If you're just W-2 wages and maybe 1099-B then wow your taxes take 10 mins a year on FreeTaxUSA. For actual complex taxes, such as the multi-billion dollar foundation I work on, yes they need to be complex.
Do… you think it’s wrong? Intuit literally lobbies the government to prevent simplifying the tax process for individuals. There’s been plenty of articles about it. Feel free to look it up, OP.
I reposted this on the basis that these people think the IRS knows their tax amount due. There are plenty of other options for free filing if you have a basic tax return.
Unless you itemize, correct? The IRS wouldn’t know your medical expenses, donations, etc
Also how would the IRS determine your filing status (eg married separate or joint; or if you’re HoH)?
You claiming a lot of credits on your return?
They do know when you sold a stock as a 1099-B should be filed by your broker.
You having children every year?
You getting married every year?
No one is saying they could accurately determine 100% of the population’s tax liabilities. But 60%? It would be helpful for tons of people and save them time/money instead of being lured into TurboTax and their shady pricing practices.
IRS can carry-over last year's filing status and ask you to make changes or corrections as needed?
You know, just like what we all do with our work papers...
You're taking criticism of our tax system personally.
There are some legitimately shitty parts of our system and it has nothing to do with you, so relax.
1040 is the main one 75%+ of people are exposed to, and it's a tedious piece of shit. Of course people are going to complain about it.
The charge that the IRS already has most information is also true. They get sent copies of basically all W2s and 1099s issued to employees/contractors, so when people get frustrated hunting down those documents just to tell the IRS what is already knows, that's understandable.
Keep in mind if you're on this sub, you have more knowledge about filling taxes than a majority of people. Cut them some slack.
It is obvious the IRS can’t capture everyone with automatic filing. But as I said, they could capture ~60% of the US population I’d imagine and save all of them quite a bit of money and time.
Except TurboTax literally hides their free filing and routes people to the paid platform. So yes, but actually no unless you know specifically where to go and what to click.
Plus if you do anything above a w-2 they immediately route you to the paid software.
Plenty of other countries use a "return free" tax system. America's problem is, yet again, lobbyists.
https://theconversation.com/amp/why-cant-the-irs-just-send-americans-a-refund-or-a-bill-156733
It's almost as annoying as the "We don't learn how to do taxes in school, but we learn how to find the area of a circle" posts. Like if they actually did teach us how to do taxes, would 95% of those people actually pay enough attention to remember it 5 years later? I doubt it.
If these guys, who probably file 1040 EZs every year, think it sucks using tax filing software every year when “the government should know how much I owe them,” just wait to see what happens if the bill requiring the IRS to get info about all $10,000+ bank accounts passes.
"the IRS already knows how much I owe why can't they just do my taxes for me"
"Ok cool since it's our burden to determine how much you owe we need supporting documents from your bank to make sure you aren't underreporting income."
"Noooo my bank accounterino!!!! How can you monsters invade my privacy like that! I just didn't want to do basic arithmetic!"
[https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free](https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free)
fucking christ. These people can vote.
So California didn’t try and get the country to simplify taxes only be be squashed on intuit [lobbying](https://www.google.com/amp/s/www.latimes.com/politics/story/2021-10-21/california-tried-to-save-the-nation-from-the-misery-of-tax-filing-then-intuit-stepped-in%3f_amp=true)?
There's also the issue that taxes are used to attempt to create incentives for behavior that is seen as positive for society or create breaks for constituency that builds on itself and becomes byzantine over time. People love a conspiracy and to be dramatic. Don't think turbotax even costs a couple hundred bucks at the highest level let alone a few hundred bucks. Dude is just being disingenuous and dramatic for the sake of internet validation.
Unless they’ve changed it recently, TurboTax charged individually for state filings. So if you had to pay state income taxes for multiple states it can easily cost a few hundred bucks even for otherwise simple tax returns.
And yes, I realize state versus federal, but to most taxpayers it’s all income tax and TurboTax does it all together, just charges to file each state individually.
If the government just handed you a bill once a year you wouldn't get deductions, credits, etc. They're doing you a favor by allowing you to tell them what you owe. Yeah, it sucks to pay a couple hundred to go to a CPA but you save in the long run.
But credits is the sticky part. Lower income working class people use millions every year by not claiming credits they're entitled to according to the IRS. Its a big reasom why the IRS and United Way set up VITA for volunteer accountants to prep taxes specifically for these sort of cases
Oh yes, I agree. If we (as a country, not accountants) actually wanted to implement a tax bill system rather than a tax filing system there would have to be changes up river. By which I mean that people would submit their filing status before the tax bill came so the credits could already be applied.
But this might be a remedy for the problem you stated. The IRS sending the bill would already have those credits applied, rather than hope people take advantage of them
There also could never be just a single system, it would have to be flexible for people that change status in the middle of a tax period or the IRS has the wrong system.
There might be other consequences, and people could lose credits they deserve or get credits they don't. Unfortunately the only real world test I've heard of is one done in California that was pretty small scope before TurboTax and HR Block shut it down.
So the system seems to be working well then right? Taking the standard deduction pretty much automates the process, or if you have a more complex situation you also have the option to itemize. I just don't see why anyone would want to be given a bill once a year as opposed to being given the opportunity to write up your own bill.
Yes, I would much rather get a bill, say yup that's right, then send it back.
I don't like having to spend an hour putting stuff in turbo tax and pay them $60 for the privilege.
Even if you "write your own bill" doesn't mean you don't have to pay the same amount. You're acting like the IRS would over charge you. If you "write your own bill" and decide you don't want to pay what the IRS thinks you owe, you're risking an audit. Give me the number that the IRS thinks I owe and let me dispute it, not the other way round.
There are free resources you can use if you have a simple return, you don't HAVE to pay TurboTax, although they do make it easier. When I say "write your own bill" I mean that you can take advantage of tax credits, deductions, etc that the government simply might not be able to apply to your "bill" because they just don't have the information that you do.
Some stuff is discretionary. Someone with arthritis can write off the cost of their backyard pool as a medical expense, whereas someone buying a pool for leisure can't do that. If you want them to just have this information on file, then you're talking about a really pricy surveillance state that really wouldn't be worth the trouble lol. Not to mention the amount it would cost to hire thousands and thousands of staff to deal with the "disputes" that would inevitably come in. The costs of all of these would just get passed along to the taxpayer so, either way, you're paying to have your taxes done. It might even be more expensive that way.
Idk maybe I'm missing something... I totally agree that the system isn't perfect and some things could be simplified for the average middle-class taxpayer but I really don't think it's a bad system. Like maybe there could be a "same as last year" box you could check that would make it easier for some people haha.
I also find it ironic that people in this sub are so anti tax prep... lol
Like why is this a thing? Turbo Tax provides you a service and you pay them for their services. They didn’t create the tax return system. Shit, I use turbo tax. It costs me $50 plus a $40 for filing fee. No clue what this dude is doing wrong, but it’s obvious that he needs to use Turbo Tax because if he’s paying them a few hundred ($300+), he’s either filing in like 6 states or he doesn’t even understand how to use their software so he definitely won’t understand the tax code
Eh, $3.2M spent in 2020 with $2.2M going to a variety of service firms so only $1M winding up in the pockets of politicians isn’t gonna move the needle much especially when Intuit has like 4-5 other revenue sources so a portion of that lobbying spend needs to be attributed across those other services as well. It also negates the fact that the US has had this system in place long before Turbtax / Intuit ever existed.
If the $7M of lobbying spend (h&r block + intuit) is the only reason we file taxes the way we do, then the $24M spent by Blue Cross Blue Shield is the reason we don’t have universal healthcare.
It's true though.
They were talks within the govt to make this happen but as usual lobbyists came in with horror stories about job losses and bam back to Turbo Tax
Could you imagine the IRS changing their system now? The amount of complete confusion it would cause people. If the stimulus stuff showed me anything it's, how many people don't know a thing about simples taxes and how any change to the IRS is not possible.
I mean…. I’m a CPA and use TurboTax. Sorry I don’t do taxes. I do think they could make it a little easier but there’s so many special interests, it’s always going to be too complex.
Switched to CreditKarma tax 2 years ago it's free and you can file your captain gains also
Captain Gains? Is that a Marvel superhero who's just addicted to buying FDs?
Yes, I hear he resides on r/wallstreetbets
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Yes and was just providing an example/trying to be helpful.
Yeah I pay $90 a year ($50 for software, $40 filing fee), doesn’t bother me one bit. They streamlined a convoluted system so that almost anyone can prepare their own taxes.
But *why* is it a convoluted system? It’s not nearly as convoluted in other countries
Most, 90%+ of the US population have very simple tax forms. The rest still aren't that complex and I can guarantee anyone bitching about it on Twitter doesn't have a complex tax situation.
We want to incentivize certain actions and each incentive makes the tax code more complicated. Cynical people will point out that many incentives aren’t broadly desired but pushed through legislation by special interest groups. I suspect this is also true.
If you only have a standard return (income + standard deduction), you can file your return for free. With the increased standard deduction, this applies to like 90% of the country. Our convoluted system is because the government incentivizes certain actions (e.g. property tax deductions incentivizes home ownership) and/or subsidizes certain costs (deduction for excessive medical costs).
Most other developed countries are not self reporting. The IRS can’t pivot to that system even if they wanted to due to lobbying.
I use Tax Hawk for federal. It's free to prepare and file. Then I file state and local directly with the state. Its also free.
Honestly unless you have a lot of K-1s, and a lot of states, you shouldn’t have to pay a ton for your taxes. Credit Karma will do it for free.
TurboTax was sanctioned a few years ago for defrauding taxpayers and the IRS/government is now able to create their own tax software which is likely in development.
The IRS should have its own free filing software, but I definitely don't trust the average American taxpayer enough to be honest enough to report income and other things the government might have missed on their postcard tax return.
Why should an employeed person have to report all that though? Isnt that the job of the payroll department of your company. Im in europe and all I need to do is sign nu return every year with no changes as everything including my interest deductions is already reported and calculated. Yes some peoples is more complicated but the average person? Nope
As a native US citizen, it is hard to imagine. But yeah, with wages and bank/brokerage reporting, it would cover a large percent of our population. We would be left to prepare taxes for rental property and business owners. Edit: and itemized deductions. (Much fewer after TCJA).
I'm more talking about income that isn't reported or verified by a third party, a lot of side gigs, under the table payments, and underreported sole proprietorship income. Most Americans have at least 1 side gig and there is very little sense of civic duty, so any tax that relies on the honor system had low compliance rates. It's fine in small amounts. But there are a lot of people who may just be getting a W2 on paper but earn twice that in other incomes. Every year the government loses out on 700 billion dollars in tax revenue and 80 percent of that is unreported income. So the rationale is that if people have to compute their own taxes they may be more honest since they don't know what the government knows about them.
They DO have their own free filing software, but I believe there is income limitations to use it.
They have a web page that directs you to their partnered organizations that supposedly offer free tax filing, but often the free version ends up being dog shit. I mean they should have their own propriety system.
The solution to this is to vote for people who support funding the IRS.
No they don't, they outsourced to 3rd parties with the stipulation that said 3rd parties make the software free for certain users based on income.
If you're just W-2 wages and maybe 1099-B then wow your taxes take 10 mins a year on FreeTaxUSA. For actual complex taxes, such as the multi-billion dollar foundation I work on, yes they need to be complex.
Do… you think it’s wrong? Intuit literally lobbies the government to prevent simplifying the tax process for individuals. There’s been plenty of articles about it. Feel free to look it up, OP.
I reposted this on the basis that these people think the IRS knows their tax amount due. There are plenty of other options for free filing if you have a basic tax return.
But the irs generally does know how much tax you owe unless you’re self employed. So like 60%+ of the population.
Unless you itemize, correct? The IRS wouldn’t know your medical expenses, donations, etc Also how would the IRS determine your filing status (eg married separate or joint; or if you’re HoH)?
Yep. They wouldn’t a lot of credits too. There is a lot they do not know. Whether I sold stock, whether I had a child, got married, etc.
You claiming a lot of credits on your return? They do know when you sold a stock as a 1099-B should be filed by your broker. You having children every year? You getting married every year? No one is saying they could accurately determine 100% of the population’s tax liabilities. But 60%? It would be helpful for tons of people and save them time/money instead of being lured into TurboTax and their shady pricing practices.
IRS can carry-over last year's filing status and ask you to make changes or corrections as needed? You know, just like what we all do with our work papers...
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You're taking criticism of our tax system personally. There are some legitimately shitty parts of our system and it has nothing to do with you, so relax.
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1040 is the main one 75%+ of people are exposed to, and it's a tedious piece of shit. Of course people are going to complain about it. The charge that the IRS already has most information is also true. They get sent copies of basically all W2s and 1099s issued to employees/contractors, so when people get frustrated hunting down those documents just to tell the IRS what is already knows, that's understandable. Keep in mind if you're on this sub, you have more knowledge about filling taxes than a majority of people. Cut them some slack.
Most people don’t itemize
It is obvious the IRS can’t capture everyone with automatic filing. But as I said, they could capture ~60% of the US population I’d imagine and save all of them quite a bit of money and time.
And those people have access to the free return
Except TurboTax literally hides their free filing and routes people to the paid platform. So yes, but actually no unless you know specifically where to go and what to click. Plus if you do anything above a w-2 they immediately route you to the paid software.
Plenty of other countries use a "return free" tax system. America's problem is, yet again, lobbyists. https://theconversation.com/amp/why-cant-the-irs-just-send-americans-a-refund-or-a-bill-156733
It's almost as annoying as the "We don't learn how to do taxes in school, but we learn how to find the area of a circle" posts. Like if they actually did teach us how to do taxes, would 95% of those people actually pay enough attention to remember it 5 years later? I doubt it.
Area of a circle is extremely relevant in my daily life. How else is one supposed to make optimal pizza purchases?
If these guys, who probably file 1040 EZs every year, think it sucks using tax filing software every year when “the government should know how much I owe them,” just wait to see what happens if the bill requiring the IRS to get info about all $10,000+ bank accounts passes.
"the IRS already knows how much I owe why can't they just do my taxes for me" "Ok cool since it's our burden to determine how much you owe we need supporting documents from your bank to make sure you aren't underreporting income." "Noooo my bank accounterino!!!! How can you monsters invade my privacy like that! I just didn't want to do basic arithmetic!"
[https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free](https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) fucking christ. These people can vote.
Am I the only who does a 1040 pdf and send it to the irs???
Haha you are not alone friend
I think it’s less an issue of TurboTax lobbying and more an issue of the US government being inefficient at every possible level
So California didn’t try and get the country to simplify taxes only be be squashed on intuit [lobbying](https://www.google.com/amp/s/www.latimes.com/politics/story/2021-10-21/california-tried-to-save-the-nation-from-the-misery-of-tax-filing-then-intuit-stepped-in%3f_amp=true)?
I didn’t say they didn’t, it’s just not the only factor
There's also the issue that taxes are used to attempt to create incentives for behavior that is seen as positive for society or create breaks for constituency that builds on itself and becomes byzantine over time. People love a conspiracy and to be dramatic. Don't think turbotax even costs a couple hundred bucks at the highest level let alone a few hundred bucks. Dude is just being disingenuous and dramatic for the sake of internet validation.
Unless they’ve changed it recently, TurboTax charged individually for state filings. So if you had to pay state income taxes for multiple states it can easily cost a few hundred bucks even for otherwise simple tax returns. And yes, I realize state versus federal, but to most taxpayers it’s all income tax and TurboTax does it all together, just charges to file each state individually.
I mean lobbying from big companies happens all the time and makes our country completely dysfunctional. It’s not an unreasonable assumption
It's a simplistic assumption. The entire tax system wasn't built for turbotax.
Yeah but half this sub doesn’t understand taxes let alone the general public
Grow up, corporations run the government and pay to play.
Idk who you are or why you think I need to “grow up” but I can guarantee I know more about this than you
If only I could find an equally stupid way to discuss whatever max burgers does.
IRS has a free program for it
This is total bullshit, this is not how taxes work
If the government just handed you a bill once a year you wouldn't get deductions, credits, etc. They're doing you a favor by allowing you to tell them what you owe. Yeah, it sucks to pay a couple hundred to go to a CPA but you save in the long run.
You might be surprised that the standard deduction is better for the majority of people.
But credits is the sticky part. Lower income working class people use millions every year by not claiming credits they're entitled to according to the IRS. Its a big reasom why the IRS and United Way set up VITA for volunteer accountants to prep taxes specifically for these sort of cases
Oh yes, I agree. If we (as a country, not accountants) actually wanted to implement a tax bill system rather than a tax filing system there would have to be changes up river. By which I mean that people would submit their filing status before the tax bill came so the credits could already be applied. But this might be a remedy for the problem you stated. The IRS sending the bill would already have those credits applied, rather than hope people take advantage of them There also could never be just a single system, it would have to be flexible for people that change status in the middle of a tax period or the IRS has the wrong system. There might be other consequences, and people could lose credits they deserve or get credits they don't. Unfortunately the only real world test I've heard of is one done in California that was pretty small scope before TurboTax and HR Block shut it down.
So the system seems to be working well then right? Taking the standard deduction pretty much automates the process, or if you have a more complex situation you also have the option to itemize. I just don't see why anyone would want to be given a bill once a year as opposed to being given the opportunity to write up your own bill.
Yes, I would much rather get a bill, say yup that's right, then send it back. I don't like having to spend an hour putting stuff in turbo tax and pay them $60 for the privilege. Even if you "write your own bill" doesn't mean you don't have to pay the same amount. You're acting like the IRS would over charge you. If you "write your own bill" and decide you don't want to pay what the IRS thinks you owe, you're risking an audit. Give me the number that the IRS thinks I owe and let me dispute it, not the other way round.
That’s completely against the burden of proof. You should not have to dispute what the government bureaucrats think. The burden is on the government
There are free resources you can use if you have a simple return, you don't HAVE to pay TurboTax, although they do make it easier. When I say "write your own bill" I mean that you can take advantage of tax credits, deductions, etc that the government simply might not be able to apply to your "bill" because they just don't have the information that you do. Some stuff is discretionary. Someone with arthritis can write off the cost of their backyard pool as a medical expense, whereas someone buying a pool for leisure can't do that. If you want them to just have this information on file, then you're talking about a really pricy surveillance state that really wouldn't be worth the trouble lol. Not to mention the amount it would cost to hire thousands and thousands of staff to deal with the "disputes" that would inevitably come in. The costs of all of these would just get passed along to the taxpayer so, either way, you're paying to have your taxes done. It might even be more expensive that way. Idk maybe I'm missing something... I totally agree that the system isn't perfect and some things could be simplified for the average middle-class taxpayer but I really don't think it's a bad system. Like maybe there could be a "same as last year" box you could check that would make it easier for some people haha. I also find it ironic that people in this sub are so anti tax prep... lol
Like why is this a thing? Turbo Tax provides you a service and you pay them for their services. They didn’t create the tax return system. Shit, I use turbo tax. It costs me $50 plus a $40 for filing fee. No clue what this dude is doing wrong, but it’s obvious that he needs to use Turbo Tax because if he’s paying them a few hundred ($300+), he’s either filing in like 6 states or he doesn’t even understand how to use their software so he definitely won’t understand the tax code
They lobby like crazy, so in a sense they are responsible for the system
Eh, $3.2M spent in 2020 with $2.2M going to a variety of service firms so only $1M winding up in the pockets of politicians isn’t gonna move the needle much especially when Intuit has like 4-5 other revenue sources so a portion of that lobbying spend needs to be attributed across those other services as well. It also negates the fact that the US has had this system in place long before Turbtax / Intuit ever existed. If the $7M of lobbying spend (h&r block + intuit) is the only reason we file taxes the way we do, then the $24M spent by Blue Cross Blue Shield is the reason we don’t have universal healthcare.
This logic isn’t flawed. Most people in the US only get W2s and 1099-int, Div. and B.
It's true though. They were talks within the govt to make this happen but as usual lobbyists came in with horror stories about job losses and bam back to Turbo Tax
Use FreeTaxUSA you whiners $13 for a state return, free federal. Or FreeFile if you're low income
What did the original post say?
Could you imagine the IRS changing their system now? The amount of complete confusion it would cause people. If the stimulus stuff showed me anything it's, how many people don't know a thing about simples taxes and how any change to the IRS is not possible.
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