I used to say turbo tax wasn't that bad, and that free filing was easy if you just ignored their promises to save you money if you upgraded.
Last year however I got all the way to the end of the process where they revealed I made too much and had to pay. That felt extremely unethical, as the information required to come to that conclusion was available far earlier in the process.
And yet what am I going to do but use turbo tax again. The perceived risk and effort of using a non-automated system to fill them out doesn't seem worth the cost.
>And yet what am I going to do but use turbo tax again. The perceived risk and effort of using a non-automated system to fill them out doesn't seem worth the cost.
I'd suggest FreeTaxUSA.com as an alternative. Federal is always free, and state taxes are ~12/state. I don't have anything obscure about my taxes, and their forms indicate they can handle much more complicated situations than I have. I've used them for 3 years now, with no issues.
I will say their system is a bit clunky. I feel like I get in loops sometimes where I go through already filled in information and wish I could just jump to the next section. I wish they would give me more questions on each page so I can better understand how a response to one question filters through down the line.
Here in Sweden I go to the tax office website, log in, have a brief look at that all my salary has been correctly entered (I have yet to encounter that it hasn't) add if I possibly want to deduct some extra things (also very uncomplicated), go to file and click send (the whole thing can even be done on mobile) . The process typically takes 20min max, Australia was quite similar. I'm always amazed by tax systems which seem to be so complicated that you almost always need an accountant (I know my parents in Germany always had one, even though their job did not imply more complex taxes than mine)
If all your taxes are just wages then you just fill out a two page form (1040). Literally just copy a couple of numbers from your w2 and you’re good. The problem is if you have non-salary sources of income (eg stock, non-employee compensation, etc) then things can rapidly become very complicated.
You're right, but I think cycomanic has a point. Why do you even have to fill out the 1040? Why isn't there a default option where you can review tax forms that have already been filled out with the the information the IRS has already received?
That has been proposed. But has been shot down by powerful lobbying groups. One being the tax prep software companies, but another being a conservative group that objects to making paying tax easier because then it will become too easy for the government to just keep raising taxes. The idea is that if you have to file your taxes every year, you have to acknowledge how much you are paying.
You don't have to file taxes in Germany except if you and your spouse are filing together or if you are self employed. Everything else is being handled by your employer.
If you want to get some of your pre-paid taxes back, you will have to file but the tax office doesn't care if you don't.
To be honest I don't know how it is now, but I remember my parents always having an accountant because it was just so much easier to deal with this, and they were a teacher and psychologist (not self employed), without any significant additional income.
Having an accountant do it in that situation is so not worth it. I know my parents also used one for way too long. So easy with tax software and with the government software you don't even have to pay for the software any longer.
Fun fact, they called the government provided tax software ELSTER which in German is also the name of a bird (Eurasian magpie) which is also known as the "thieving magpie". Who said the government didn't have a sense of humor!
What makes you say that? You know they are intentionally difficult in the US?
For instance, there's been legislation where the IRS would simply tell you how much you owe and you pay it or dispute it. The IRS already know this amount, because this is what eventually happens.
Turbotax successfully lobbied for its defeat. It explicitly spends large amounts of money to complicate and convolute the system and structure it like a classroom quiz.
One of the major challenges with the US system is that the central authorities do not have much of the individual tax information all submitted and processed in advance of the individual taxes. The individual then has to to incorporate this information and file it. Sometimes individuals get amended taxTax information from their income sources and then have to re-file. The central authorities cross check on the backend (in theory).
It is incredibly arcane, and in some cases individuals holding publicly traded assets are legally required to file income tax in all 50 states.
California piloted a pre-filled tax return system (similar to Sweden and Australias, that the OP was talking about) called ReadyReturn in 2005 with 51,000 people.
Intuit then spent $3 million to smash it. They lobbied and then sued the state to stop the program. They are also profoundly incompetent technologists. There's an entire subreddit dedicated to how broken their stuff is (https://www.reddit.com/r/TurboTax/top/?t=all)
What did the participants of ReadyReturn, the pre-fille forms, think of the government program that Intuit killed?
"99% stated they were satisfied with ReadyReturn, 97% stated this is the type of service government should provide, 96% stated it was more convenient than how they filed in the past, 95% stated it saved them time, and 98% stated they would use it again"
Once again private interests sabotage and destroy the public will.
The line of "the reason taxes are so difficult..." is from sheer propaganda shills. Tax simplification has happened, it worked, and Intuit killed it every time. The reason is Intuit. They are the buggy whip industry that won. Shameless grifters that intentionally disrupt people's lives for profit.
I hear what you are saying about the problems with the current system being fraught with problems, and there being a total gap in a government provided service.
That said, there are a lot of challenges to such a program.
Ready return was limited to people who were single, no-dependents, standard-deduction, only-wage-income, one-employer, with a maximum adjusted gross income of $139,917
This is great for a number of people and should exist!
That said, if you fall into this category, your 1040 should take 15 minutes to file by paper.
Where automated systems break down is handling more complex scenarios. Selection of deductions, pass through business income and losses, charitable donations, corporate investment vehicles, ect.
Many of this things require individuals to make choices at the time of filing. This is challenging to automate.
It's not challenging at all. I did taxes in NZ for a contract once. You do make a few choices if you want add some exemptions to save money, but it doesn't amount to much either way.
1040ez is quite easy. I still believe that IRS could just accept you signing that you made a certain amount and these are your deductions. They have the same information that I do, I seriously think they like auditing people.
Yes especially the ones who still had to file in the US as well.
That's one of the things I never understood, the US is only country im aware of where you have to file if you're a citizen, even if you're a resident overseas.
My understanding is that if your personal taxes are moderately complicated (income from self employment and investment/property, some possible deductions) they're a lot harder in the US though.
HMRC's website in the UK is far from perfect, but its tax form covering all UK personal taxes has the features people appear to be paying for with TurboTax (Q&A format, most sections being optional, references to industry specific deductions, guidance notes) baked in.
If your taxes are "easy" in the UK they come out of your payroll without you filing a return.
I'm using freetaxusa.com for the first time this year. I got fed up with TurboTax after being hit with a similar anti-pattern as the ones described above. Got almost to the end and was told I had to pay $80 to file. This was after spending hours on my taxes because there are some things that can't simply be updated.. no you have to completely start the process over from the beginning. This felt intentional so that I would just accept the cost to be done with it.
After learning about how TurboTax lobbies to make filing more difficult, I swore I would not use them any longer. I also take everything opportunity to let people know about TurboTax's lobbying.
So far freetaxusa.com seems better than TurboTax IMO. It's cleaner and to the point. No unnecessary animations or any of that nonsense.
Every year I internally gripe about the UI improvements I'd prefer, but fully recognize it is better than TurboTax, and is approachable to people with a wide range of computer literacy.
Let me add my recommendation for FreeTaxUSA.com. I am a newly married grad student on fellowship, which implies juggling estimated taxes, confusing withholding rules, scholarship income, a name change, and first-time joint filing. Needless to say, I am not a "simple" case. After TurboTax failed to prepare my forms correctly (!) and wanted to charge me for the displeasure, I went looking for an alternative. FreeTaxUSA.com is where I landed.
The interface is fairly minimal. The workflow mirrors the questions/boxes on the IRS forms/instructions, a very helpful feature in my situation since I could easily cross-reference the relevant IRS publications when necessary. They provide excerpts from the documents as you go, which is all I needed in many instances. Unlike TurboTax, the prepared forms were actually correct (to the best of my knowledge, I am not a tax lawyer).
Simple, cheap, reliable. Would and do recommend.
EDIT: Story is related to last year, I plan to use them again this year.
I also like their bookmark feature. I commonly realize I need a bit of information and can add a note about my questions I need to research more, or what form I'm waiting on.
Once my bookmarks are clear, I know I'm good to submit.
I tried Free File Fillable Forms last year on principal, but I ran into issues in two areas:
1. reporting scholarship income (goes on the line beside box 1 and nowhere else), and
2. state taxes are not supported, and my state does not have an equivalent service.
It's really frustrating that states have not adopted an equivalent service. I actually filed paper forms for mine because their free service is a simplified approximation of the full form and leaves out certain workflows that limit its scope of complexity.
I find it more approachable to use the question/answer format compared to reading all of the instructions on detail, determining if that particular section applies to me, and wondering if I found every form to cover every situation from the last year.
An example is figuring out whether I would owe taxes on the gain from the sale of a primary residence I owned for less than 2 years. Figuring that out manually took some googling, finding an IRS guide, reading multiple pages of regulations along with exceptions and determining where I stood.
Another is determining HSA contribution limits when my wife and I were in individual HDHP plans part of the year, and a family plan the remainder.
If your tax situation doesn't change from year to year you don't need to scour the instructions. Just work through the forms using last year's return as a guide.
And there have been a lot of tax changes recently. Although my personal situation didn't change significantly, the filing experience changed more during the past administration than in the 10 years I'd been filing taxes before that, even though those previous 10 years included multiple moves and changes of jobs, and the purchase of a house.
They did, but the line instruction verbiage is easy enough to trace where it went in the end if you search certain keywords and phrases you can hook into the right places more or less.
I did in college. If your tax situation is nontrival it can take a very long time and has lots of room for error. I made a mistake and owed a $200 penalty for it back then. Software walks you through it and automates all of the arithmetic, number copying, and prevents fat finger errors.
The IRS site gives that impression, but I believe that's not the case. There is "IRS Free File" which is income limited as you mention, but there is also "Free File Fillable Forms" which appears to not be income limited. Intentionally misleading if you ask me.
The wording is confusing (I think this is an IRS requirement having read the documentation for many years now) but what it is saying is that if you make under $72,000/year there are a ton of free options available. If you make more than $72,000 this is supposedly the only free e-file option available.
The whole thing is a mess because TurboTax and H&R Block and the like want to stay in business. If the process is too easy then the middlemen won't survive.
When my tax situation was very simple I was happy to do my taxes on paper, often using form 1040-EZ, which only took about 10 minutes. Now that they are complicated (lots of different 1099s and business income) I very much prefer to use software to guide me questions and answers style.
Does the IRS allow direct e-filing? At least as of last year, it seemed that you still had to go through someone else to file electronically (although the forms are freely available).
Yes, I’ve been using IRS free fillable forms for over 10 years, I think, with no middleman between me and the IRS. Similar with my state taxes on my state’s revenue website.
Sorry, so, just to be clear: you've been filing your forms electronically with the IRS, not printing out the filled forms and mailing them? How? I swear I've looked, and been unable to find a way to file electronically (although I agree it's easy to find the form), except if you fall into certain income categories. I've even been told that it's intentionally legally impossible, as a way for the IRS to avoid competing with private providers.
(State taxes are a different matter; I've paid Illinois and Michigan taxes recently, and they do provide an easy and obvious way to e-file directly with the state.)
https://www.freefilefillableforms.com/ is the site. It is technically not an IRS service, but one provided by the free file alliance as part of the IRS agreement not to build their own software.
There are no income exclusions or anything. It is possible you will be unable to use it if you have to use some really obscure forms, but it does have all the forms that paid Turbo Tax can file for you. You also might not be able to use it if you have one of those weird tax situations where the IRS instructs you to write a message across the top of your 1040.
Another recommendation for FreeTaxUsa. Used it last year for filing and for an amended return. I am happy to pay the small cost (about $7) for unlimited support (didn't need any). Using it again this year.
They are great! Use them every year. TurboTax is a scam in comparison. Use code FREETAXUSA10 to get 10% off that already-cheap state filing (federal is free).
No, but it’s not hard to fill in the few boxes of information from the 1099-B. I have 1099-B, Section 1256 contracts, and regulated futures statements and they’re all easy to input.
+1 for them. I live in one of the few states with no state tax, so its totally free to file. They do ask if you want to pay, its only if you want some audit protection, and live support.
Credit Karma is free. Works great, and has no discernable dark patterns. They even have import features from major payroll companies like ADP.
I had to quit turbotax because one year I was a 1099 worker and every year since, it pushes me to go with their "small business edition." Each year it got harder to avoid "upgrading."
Seriously, just do it. Quitting TT is so much easier than quitting anything else.
Having used Credit Karma in the past, you should know that it can be...dangerously confusing...for anything other than the happy path.
Things like backdoor Roth contributions (which aren't that exotic, tbh) were very confusing in credit karma, to the point where I actually did my taxes with another service just to verify that the calculations were correct, then submitted with CK. I found several mistakes in the CK results that were due to bad/confusing UI.
You likely won't hit this problem if you're just doing a 1040EZ or 1040 with standard deduction, no stock sales, etc. But if you have any complications...sometimes there's a reason to pay for software.
Yeah, I'm normally pretty cheap with this stuff, but this is painful enough that I just decided to pay for some software this year. At some point, "cheaper than an accountant" becomes the guiding principle...
(definitely not defending Intuit here, though. Tricking people into paying is not cool.)
I got an email from Credit Karma advertising for TurboTax. This plus the glitch that exposed into [1] leaves me very little confidence in CK.
[1]: https://news.ycombinator.com/item?id=20699410
I thought I remembered TurboTax purchased CreditKarma, but googled,and now I'm confused...
> Intuit Inc., owner of the popular TurboTax DIY tax preparation service, has moved forward with its $8.1 billion acquisition of Credit Karma, Inc., after satisfying the government’s requirement that Credit Karma divest its tax preparation business.
Divest their tax prep business? I just did my taxes on creditkarma, and it was the same website that was trying to market me credit cards that i prepared the taxes on.
AHA, that article has a date "January 3, 2021", so I guess still in progress?
But ok, divest their tax prep business... the WAY CK was providing free tax prep was by funding it with the rest of their portfolio, the credit card marketing and such. The tax prep got people into their system (and possibly got their data into their system, I'm not sure how much was opt-in or opt-out).
Divest their tax prep business? Into it's own business? It won't possibly be able to provide the service for free anymore right? They will probably quickly go out of business.
I don't know how the heck anti-trust regulators think this did anything positive. Intuit one way or another succesfully eliminated the competition from free creditkarma tax prep. Gah.
Credit Karma got a lot more snoopy about personal details after Intuit acquired them. They won't get anything else from me until after that merger goes through, because I see no reason to give Intuit any more data than they already have. I moved to H & R Block's Tax Cut more than a decade ago thanks to Intuit doing something horrible I no longer remember.
In several years of using it, they've never emailed me advertising anything, and while they're obviously sharing my info with credit card companies and banks, I haven't gotten any marketing from them either. If you don't care about the recommendations, as I don't, you can use it for your taxes and never think about it the rest of the year.
They use your data (income, financial situation (do you have a mortgage, etc.)) to determine what financial products (which credit cards, personal loans, mortgages, etc.) to offer you.
This would all be in addition to what they knew about your credit score or anything else you input on the other parts of their platform.
But as others pointed out, that part of CK got split off when Intuit bought them.
When I did my taxes through them, at the start they offered to transfer my data into Cash App. The wording was a bit shady as it wasn't clear what Cash App is or if it was part of the tax prep process or not. I already knew what Cash App is so I declined but I could see some people getting confused. At the end it also offered to load my refund into a Cash App account "in days instead of weeks", making it essentially a refund anticipation loan. The wording on that one was much more clear and I declined.
I got snagged in one of their dark patterns. American living abroad, start with turbotax, include foreign bank information and schedule 2555. Get all the way to then end. "we see you're filing income from abroad. You will need to upgrade to TT Deluxe for $60"
After that been using CreditKarmaTax; no shenanigans.
> And yet what am I going to do but use turbo tax again.
At least look into the options. Credit Karma Tax, FreeTaxUSA, 1040.com - there's a bunch of stuff out there made by companies that don't actively try to make the IRS less functional.
I ran into that this year. After declining all of the mid return attempts to get me to upgrade to the paid service, when I got to the very end it told me that since I had purchased health insurance on the government marketplace for part of the year that I'd have to pay extra for that form. I went with Credit Karma instead. Turns out that my taxes weren't affected at all by my health insurance situation. Between the cost of the Deluxe version and now being required to pay for state filing, they wanted $67. I know they think these "free" offerings are a way to dissuade Congress from having the IRS offer tax filing directly but these games aren't helping their cause any.
Credit Karma was free for filing both state and federal though they did make two attempts to get me to install Cash App, both of which I declined.
The fact that Turbo tax has at least 2 totally different free products, only one of which is part of FreeFile[1], and the other of which has a whole slew of exclusion criteria, mainly tied to which tax forms you will need to file is completely absurd. The IRS should really tell the FFA members that their advertised free product must be the same as or a superset of their FreeFile offering.
I always hear this, but what does "simple" mean? Do you recommend a professional if you have rental income? Stuent loan interest? Stock sales? Stock options? Convert a 401(k) to an IRA? Inherit money? Own a small business?
I've done all these things painlessly with regular tax software. I've also tried a professional CPA once, and he was useless. Just sat there asking me every question that the software normally would, and then typing my answers into his software. Nice guy, but not worth $400 compared to $50 software.
> Do you recommend a professional if you have rental income?
Unless you know exactly what your cost basis is, yes. It gets complicated with construction loans, HELOCs, refinances, having lived in a property for quite a while before renting, etc.
Even as a full-time college student, I've used a professional, and I'm glad I did. He did things as straightforward as claiming relevant education credits to more esoteric such as maximizing refunds around housing stipends for summer internships. I didn't have to do much else other than reach out to my accountant and provide a W2.
It's fully within the bounds of tax law, something which I (and my accountant) made very clear I want to stay within. Our tax code is a joke, yes, and in need of actual reform, but this itself doesn't put me in any legal grey area whatsoever.
I would hope anyone who made it through A US K-12 education would be able to do their own taxes if all they have is W-2. Even 1099/student loan interest deductions/etc is pretty easy.
I would say it only gets really complicated once you venture into dealing with equity and AMT and stuff.
It’s funny though that people will scour the web and clip coupons to save money, but they won’t research how their biggest expense (tax) is calculated.
Researching how taxes are calculated takes up valuable time and mental capacity, and you have to reeducate yourself every couple years on whatever new tweaks to the tax system happened.
> Researching how taxes are calculated takes up valuable time and mental capacity
So does deal finding and coupon clipping, which is what the parent was comparing to.
If you have just a salary, no mortgage, and no stock/equity transactions, nothing has changed in 20 years, and it takes all of 10 minutes to fill the Federal form out (and I'm being generous). Every once in a while there is some extra credit, but it's usually prominently advertised. A simple hack is to look at the previous year's tax form and compare to see if anything has changed, and look up the guide related to those entries.
If you do basic stock transactions (RSU, SPP, buy and sell), then it's a bit more pain, but still easy.
Deductions are things one can easily miss, but even then, once you figure it out, you just have to keep an eye out for changes to deductions. The recent tax changes screwed it all up (although they also made taxes overall easier for those not in high COL states), but the usual deductions to watch out for are mortgage interest, state taxes, property taxes, and charitable donations.
If you have other things going on (side business, etc), then I would suggest paying for a CPA.
Worst case, just plug the numbers into TT and see if what you get is the same. If they imply you can get more, then pay someone to do it for you.
I know people like to think it will take a lot of effort, but at least for my salary, if I count the hours it takes for me to do all this, it's always cheaper than paying a CPA.
My experience has been the opposite. Unless I'm prepared to spend literally thousands of dollars, tax preparers don't seem to be able to do any better than I can. They largely make me do the hard stuff (splitting RSUs by state, fixing incorrect 1098Ts) myself anyway.
Unless you own a small business your taxes are really simple though and it isn't money well spent. The pros try to tell you they are doing something hard, but your situation isn't unique or hard.
I've dealt with the IRS. It was a major pain. Ridiculous pain. They were contesting some education credits some years after graduation. Showed proof of payments to the university, but they responded with "Well how do we know you were paying for education - you could have been paying for things like parking?"
They kept saying "Send us this doc and you'll be good." We'd get the doc, send it to them, and they'd say it's not enough.
Called the university. They said they'd never heard the IRS contest the form that universities provide (1098 or whatever it is). I had to beg them to find my actual bill for that year, so I could show them that what I paid match what was billed. Finally the IRS relented.
Jokes on them, though. I found some unused deductions, amended my tax form, and got back an additional $400.
Having said all that, I still do all my taxes myself. Neither Turbotax nor a CPA would have spared me this headache - they would have filed it exactly as I did - just slap on the form the university provides. My wife used to use a CPA in the past - relatively cheap ($150 for both federal and state). I found issues with his work - he didn't take as many deductions as he could. I amended and got back extra money. He also messed something up which the IRS (rightly) contested. We contacted the CPA so he could fix it and he went AWOL. We had to deal with it.
If your financial situation doesn't change from year to year, I suggest paying a CPA once to do your taxes, figure out everything he/she did, and just do it yourself next year.
Also had to deal with the IRS over education credits and capital gains. It is a pain, and can be stressful, but ultimately I found that the IRS was fair, bureaucratic, and professional.
I think that the most important thing to remember when dealing with any government or financial institution is to keep paper records of everything. For our education credit dispute, we had my wife's transcript and receipt for tuition paid in the tax folder; we sent that in and the matter was closed. Same goes for capital gains: it's really handy to have detailed records of the cost basis for anything you sell. Same goes for identity theft, bank fraud, stolen credit cards, contractors that don't do what you pay them to do, etc. Know what you have agreed to pay, keep a paper trail of it, hold up your end of the bargain, and then insist anyone you do business with hold up theirs.
Well, I had a record that I had paid the university, just not the receipt that said that the payment was for tuition and not parking.
I generally do keep paper records. For this case, both the university and a tax accountant told me what I had submitted is all that is needed. There's a reason the university gives you a tax form every year. Saying I should keep more records is like the IRS coming to you and not accepting your employer's W-2 form and wanting additional proof of your wages. Did you happen to save your biweekly payslips?
For standard deductions/credits (of which education is a common one), I do think it is the responsibility of the IRS to come up with a simple system to show it, like they already do for the W-2. The tax statement the university provides should suffice - what else is it for?
As for professionalism: They were calm and courteous, but I do not think being told "If you can show X it will be sufficient", and then not accepting X when I provide it to them is professional. This happened twice for the education credit issue. X wasn't some vague general idea, but a very specific document. They literally said "If you can show a bank statement showing payments to the university that will be enough" and then refused to accept it when I provided it to them (switching to "Yes, but how do we know it wasn't for parking?"). It should have been obvious at the outset that the bank statement would not have this information.
I don't know how long ago this was, but in the past couple decades the likelihood of a regular Joe getting audited has plummeted.
IRS enforcement has pretty much been gutted by Congress. For everyone but high earners, it all comes down to automated checks that run at file time. If you don't have any obvious flags (e.g. not reporting income that was on a W2), then the IRS doesn't have time for you.
> That’s so cute how everyone is afraid of the IRS boogeyman
Its so cute how everyone is afraid of a government agency that is opaque and can charge you fines or jail time for not correctly filling out their documents :)
I have no source. Idk if it actually happens that "ordinary" people go to jail for being bad at filling out taxes. But people think it happens, people worry it happens and that's completely fair.
I'm aware that in my current state I just take the standard deduction and call it a day. But the time and chance of having to go back to it due to a mess up is more than $80 imo.
We're sorry the answer to "why can't we have nice things" wasn't [political party], it was lobbyists. Lobbyists is the answer to, "why can't we have nice things"!
Honest question, how is lobbying different from bribery? Lobbyists go to Washington, spend fortunes on taking lawmakers to fancy dinners and then get away with what they want. Maybe I don't understand the process and am oversimplifying it, but that's how I see it.
I'll flip the question around...
How is lobbying different than random voter talking to their representative in person?
It isn't really - a lobbyist is just exercising the free speech available to all individuals - they just happen to be doing it on behalf of a group of individuals.
I'm purposefully ignoring the whole "corporations are people" aspect because that's a different discussion. But, what you seem to be arguing is that I cannot gather with my neighbors, select a person from the group, and send them to DC to talk to our Congressperson about whatever topic interests us. Instead, we all have to go individually?
Edit - I actually do find the current lobbying situation to be problematic, but it mostly relates to campaign donations. It's not as simple as lobbying (by itself) is bad.
Something I don’t see anyone else talking about: power. They don’t just come in and offer you a fat campaign contribution check on behalf of those they represent while strongly encouraging you to vote a certain way on that one bill that would really move the needle for them. They’re also offering executive / board positions in the companies they represent and related entities. Do your own research on EO 13770 and how that whole deal works, but it’s a lot more networking / relationship building than just a free lunch.
I'm free to donate directly to a campaign.
I'm also free to pool my resources with my neighbors and donate as a block.
Like I said (in the edit), the problem is campaign financing, not lobbying. The two are related in the US, but we can probably fix financing without impeding free speech.
I don't know if you're confusing 'lobbying' with 'bribing'? Lobbying doesn't have to involve money. It just means talking to people and trying to persuade them to your point of view, which isn't inherently dishonest or problematic.
> lobbying + firehosing campaign cash = federal power on demand
Right... but only one side of that operation is the problem!
It's like saying 'a glass of milk + cyanide capsule = death' and blaming the glass of milk!
Lobbying is a neccesary and healthy part of a functioning democracy. Do you want decisions about you and your life taken with no input from you apart from voting once every few years?
How often has a single (non-rich) constituents money been the cause of policy change?
This is comparing a gun to a nuke. Yes, you could kill just as many people with a gun, but the nuke is hyper efficient at the job. They're not the same.
Lobbyists may be akin to a policy nuke. They have an arsenal of tools from influence, to money, to unethical and sometimes illegal behavior. Their positions have become so effective that it drowns out most others.
edit: Another way to think about it is that Lobbyists have changed, i think, from the voice of a group of people to a voice instead of a group of people. Leaving many people voiceless in the face of insane capital and influence.
Another way to think about it is that Lobbyists have changed, i think, from the voice of a group of people to a voice instead of a group of people. Leaving many people voiceless in the face of insane capital and influence.
I'm not convinced this is true. If a lobbyist is not speaking on behalf of people, who are they speaking for? After all, corporations are just legal entities composed of people - with stockholders/owners, a BoD, employees, and customers.
The simple act of Joe Lobbyist meeting Congresswoman Schmidt for a coffee and chat about some topic isn't a problem. The problem is that with that cup of coffee comes an implied donation on behalf of the people Joe represents. The problem is campaign finance, not talking to our representatives.
A corporation benefits a few, is wealthy, and controls the means of production. They can make material threats and promises that ordinary people cannot by virtue of owning little except their labor.
A corporation benefits all of its owners (and hopefully its employees too, though that's not a given, sadly). In the case of Apple or Dow or Boeing, that's millions of people.
Ordinary people are free to combine their voice via unions or their own lobbyists.
Communicating with your representatives is protected speech. The problem is campaign finance.
Unfortunately, millions of people is still less than 4% of the US population generously.
Employees are a cost center. The idea is to get as much as possible for as low a cost as possible. That's business and why employees can only win if they band together because they'd like to get as much as possible for as little work as possible. Those are diametrically opposed interests. You can change that equation a lot if the employees are the owners.
Do you have your senator's personal cell phone number? Does your senator recognize you by face? Will he remember whatever question you're talking about even if you secure a f2f meeting?
The lobbyist, who used to be that senator's chief of staff definitely does......
The lobbyist is taking the representative out to fancy dinners, golf courses, family vacations. It just so happens that they’ve known each other for years.
There's also the implication that at election time their clients will help fundraise. It's a lot easier to fundraise from rich people at thousands per pop than $20 or less from ordinary people by a factor of over 100.
Because lobbyists aren't advocating for something that the constituents the representative supposedly works for. They're advocating something that a corporation, likely not even within the district or state wants.
As an example why can't I who don't live in your state go to your representative and get him to act in my best interests? Why would it be wrong for your representative to act in my interest instead of yours?
It's completely different. A random voter is that representative's constituent. The representative is beholden to that person. A lobbyist is merely a random person who donates to political campaigns and secures other favors. The representative is not beholden to this person.
the problem has been is the lobbying in Washington and even at state and city levels has become a friends and family thing and even a parking place for politicians who are down and out.
hence the amount of wealth that politicians, their family which usually means children, gain while they are in office is phenomenal and can lead to positions at state and city levels. the real one percent are these upper end politicians and bureaucrats who just operate with near impunity because its basically impossible to follow all the trails or because much of it has been made legal; usually by making laws that say one thing and do another.
That stuff is all just part of the game. The real issue with lobbyists is they appear to subject matter experts to the politicians. politicians who are not subject matter experts at almost anything generally find themselves believing what lobbyists say. The fact that they're whined and dined and made their time getting lectured enjoyable isn't really the problem so much as they are only getting half truths. The article has a perfect example where politicians say that it won't tie the hands of the IRS I'm sure they honestly believe that. The problem is that real subject matter experts tax lawyers say it will. but it doesn't matter The politicians have already believed something different. and it's much easier to con a man than convince he's been conned.
People only hear about lobbying in a bad light but the truth is they are vitally essential - not all lobbying is back room dealing - the vast majority of it is basically advising. When you call your senator you would be lobbying on behalf of a cause.
If the government wanted to put a back door in encryption, who is it that tells them why that’s a bad idea? Quite often, lobbyists (in this case on Behalf of companies whose security would be compromised). Industries organize lobbyists to advocate for themselves because politicians can’t possibly understand all the ramifications of the laws they pass.
There are definitely issues with organized lobbying but the alternatives are lacking.
And tell me again why lobbying is legal and people are marching to protest 100 yo statues but NOT lobbyinng? People in the US dumbfound me at how willing they are to accept public corruption while they claim the moral high ground over social issues that are trending
Congress shall make no law [...] abridging [...] the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
This is the core idea, but obviously the concept of "lobbying" embodies a lot more than just assembly and petitioning in current usage.
I do think it is important to realize that we do have a right to advocate for change. Laws that regulate or curtain "lobbying" need to be carefully crafted to avoid infringing on these rights.
Giving money or paying for a dinner doesn't seem like "assembly and petitioning".
It is illegal to bribe a cop. It doesn't seem like "a clever loophole" to buy the police department new equipment - it still seems like a bribe to me.
There's no legal reason we can't craft law to be different than it currently is, closing these "loopholes". Campaign finance reform (publicly financing campaigns and limiting campaign spending) would be a great step.
> There's no legal reason we can't craft law to be different than it currently is,
Of course. I didn't say differently. But lots of people don't understand the conceptual relationship to "lobbying" and the 1st amendment and I thought it was worth pointing that out.
Politicians rarely know when there is a problem, someone has to tell them there is one. There's where a lobby group comes into play. The danger becomes which one do you believe? You can hear both sides and make a carefully thought out decisions, and then do that for the 10,000 other groups coming to you, but it's a time consuming process.
Let me add to this. The process of legislation has gotten too big and complicated. Congress is passing fewer, larger bills, that include hundreds of small things that get passed without review or agreement, because there is an overriding interest in getting the big things done. Lobbyists don't need to buy a majority of votes, just find a couple people who may already be aligned them, who are willing to continually try to attach changes to bills.
There is a counter-argument, though I'll leave it's plausibility up to the reader.
There are a lot of deductions a taxpayer can use that the IRS doesn't know about. Charity donations are probably the most common, but also business expenses and medical expenses. Teachers who spend their own money to buy class supplies could and should be able to submit those receipts and get a deduction.
That can't be easily simplified. The IRS could eliminate those deductions which would make a lot of people unhappy, or there could be some kind of complete retail overhaul where a teacher would be able to tag items as 'deductions' at the time of purchase, and the vendor would send all those tags to the IRS.
The IRS could just send out bills assuming no deductions, and teachers could then add supplemental information on business expense, but ( the argument goes ) teachers might not know they can, or they might not feel it's worth their effort, and so the end result is that a lot of taxpayers overpay.
Disclaimer - I have worked on tax software, but I wouldn't shed any tears if the industry went down. I'm relaying opinions I've gotten from coworkers at the time.
> Teachers who spend their own money to buy class supplies could and should be able to submit those receipts and get a deduction.
No, they shouldn’t. The class supplies should be paid for by the government, not the teacher.
Deductions need to be completely removed, and replaced with cash. Government should have to account for whatever it wants to incentivize.
Also, I think few teachers probably get past the standard deduction amounts in order to make sense for them to itemize everything in order to get a deduction for classroom supplies.
I think you are right, my point more that until we have revamped our school systems so that teachers do not have to purchase extra expenses, the tax code remains unfortunately complicated.
A lot of the blame goes ( justifiably ) at private companies and their lobbyists, but even without these vested interests there's a lot of complexity that cannot be easily removed
>A lot of the blame goes ( justifiably ) at private companies and their lobbyists, but even without these vested interests there's a lot of complexity that cannot be easily removed
There's nothing logistically difficult about removing the complexity of deductions/exemptions/credits, it's a few sentences typed into a law voted in by the legislature.
The difficult is all in the politics since costs of various subsidies and incentives granted via deductions/exemptions/credits become transparent and part of the government budget.
I'd be interested to see those few sentences. If they are "no more deductions/exemptions/credits" that is (relatively) simple but would upset a whole lot of taxpayers.
That whole argument of the teachers need a complicated tax code is cancerous. There's an easy way I'm happy to solve it with. If you're a public school teacher, you can skip paying taxes. You already aren't paid well enough, this ones on us.
I think they meant "simple" as in the filing process, not the tax code. Agree tax codes get complicated for good as well as bad reasons. It could clearly be simplified, but only so much.
A turbo-tax like interface that covered say, 80% of the working public perfectly well and was free or really cheap is certainly in the realm of possibility.
That's a cute little example, but it's really not at all convincing. How many hundreds of thousands of people have to pay some tax company to file their taxes just so a few teachers who have more deductions than the standard deduction can pay for the privilege of some software to make it a tiny bit easier?
Then, why wouldn't the IRS be able to offer that same functionality? The whole idea that "the IRS can't know" about this type of deduction feels like a lie to me, but I don't know enough to be sure.
>Lobbyists is the answer to, "why can't we have nice things"!
It's also the answer to why we have a lot of nice things. It's how experts can get their voices heard over popular beliefs when laws are created. Without this lobbying bills on complex issues would have little chance of being useful, since without experts lobbying for nuances those crafting the laws would not have the expertise to create good laws.
Lobbying groups include electoral reform groups, small business groups, human rights groups, child healthcare groups, and on and on.
The second biggest lobbiest by spending in 2019 [1] was lobbying for immigration, foreign relations, and disaster planning. These seems like reasonably good things for society.
Lumping all lobbying into one simple basket is terribly shortsighted.
This is a massive waste of time, if you use TaxHawk/FreeTaxUSA (same company/software different website) you can just e-file your federal return for free without copying information to another place. Yes, it's actually free, you don't have to pay anything or even give out your credit card number.
If your state doesn't have income tax you're done, you pay nothing. If you want to continue on to e-file your state, it's only $15 (currently on sale for $13). If you want to do your state's taxes any other way (their website?), no problem, just stop after e-filing your federal return, you still pay nothing.
Taxhawk is a company that has been around for 20 years, they are authorized to e-file with the IRS, and their software is (in my subjective opinion) excellent. Been using them for a decade. I am not affiliated with the company, but I advocate for TaxHawk on HN all the time, because I'm extremely satisfied with it and apparently not many people know it's an option. My taxes are not straightforward either. (multiple W2s, 1099-INTs, 1099-DIVs, 1099-Bs, and business income)
I do my taxes manually entirely on paper and send them in. I don't want H&R Block, Intuit, Taxhawk, or anyone else to have that information that they will then turn around and monitize. I also like the painful yearly reminder of the unnecessary burden the government is placing upon its citizens. For the majority of W2 income earners, the IRS already has everything it needs to compute your taxes and send you a refund or a bill in mid-February.
Okay, but if you're going to go enter all your info onto a for-profit company's website anyways it's a massive waste of time to then go copy all the numbers to a different place. That was my point.
Basic federal (1040EZ) is free (they all have a free tier thanks to whatever legislation prevented the IRS from having a solution back in the day). State costs money.
Using their fillable forms or through tax-prep software?
I used the online form a couple years ago and the process was so annoying compared to freetaxusa that I will gladly pay the $12 to avoid dealing with the Oregon.gov site.
For some reason, the TurboTax version of FreeFile is now limited to below $33000 AGI. It wasn't last year. The FreeFile from other companies has the limit of $72000, which is what I thought the law said it has to be. I am not sure how that is possible, but I'm sure it took some extensive lawyering and lobbying by Intuit.
This is what I used this year after watching the show and it worked great. I recommend this link to all my friends now. It also seems like they keep it up to date which is nice.
I am a chump who uses TurboTax every year. Having seen a few cases of the IRS going after someone I knew, I just pay the danegeld.
Perhaps I do not need TurboTax, but I know that the laws at the state and federal level change every year and that I have no real ability to track any of this, but the penalties can be high for failure. I rarely understand tax jargon, in any case; I always feel like I am on the back foot of some "clever" debate team tactic of convenient definitions.
So, aside from just the lobbying aspect -- which is not trivial -- I would say that the general terror of the IRS (Al Capone, after all, fell to them), the shifting territories of tax law, and the jargon barriers also contribute to keeping TurboTax in business.
This used to be me. Here's the problem: I never understood how my tax was calculated. And thus, I could never be in real control of my own finance. "How much tax would I need to pay if I sell these stocks now?", "How much should I put into retirement this year, and why?" These were the questions I constantly asked myself and never had good answers to, due to my lack of understanding of the tax code. Never again.
What does "IRS going after" mean here? I've been filling my taxes by hand, and back when I used some "free" online thing, I had problems multiple times and the IRS basically just sent me a bill saying what I owed and I payed it. (Doing it myself has proven more reliable.) Contrary to popular belief, it's not a crime to make a mistake on your taxes. So what happened that you're so concerned about?
An example, from this year: a friend received a letter from the IRS. They were about to levy something in the order of ten thousand dollars. I will mention that the tax return that year had been prepared by a family friend of theirs who worked for the IRS. I have no further details at the moment.
Perhaps you are not fussed by the prospect, but I do not ever want to get a letter from the IRS telling me I need to pay them ten thousand dollars.
Of course I don't, but I guess the question is: would they have owed that much anyway? My thought was that the IRS just billed you what you should have payed already plus maybe some interest. So if you get a $10k bill, it's an unpleasant surprise but doesn't that mean they just messed up and should have payed that 10k (less some interest) a few months earlier?
The answer is I don't. Even tax experts seem to make mistakes, as pointed out. Faced with that, I tread lightly. Remember, the IRS has worked very, very hard to get a certain kind of reputation and there are knock-on effects from that.
Also, as one of two full-time working parents, with a nanny, and some other income, I do not have time for this crap. Yes, I'm getting shafted by Intuit and their lobbying, and I know it. I hate myself every year that I pay for TurboTax but then I have a glass of wine in the evening and forget about it.
Also, we buy it at Costco for a 5-seat license and split it amongst family. That takes the cost down to something much more edible.
Funny anecdote, I've been using TurboTax installable for a decade or so (having given up on doing them completely by hand).
Been considering hiring a professional because you always hear that they are worth their weight in gold. (Our tax situation is not particularly complicated though, typical Silicon Valley married homeowners).
Well, last year, did everything in turbotax, said we were short by like 15k. Believable, BTDT before, but didn't want to believe it. Hired an accountant on a recommendation. She did all our stuff, came up with a bill, turned out we owned $500 more than TurboTax said.
Okay, paid it.
2 months later, get a check from the IRS, we overpaid by $500. Yup, TurboTax had it right all along!
> Been considering hiring a professional because you always hear that they are worth their weight in gold. (Our tax situation is not particularly complicated though, typical Silicon Valley married homeowners).
Tax professionals may be worth their weight in gold if you can rearrange your finances to do things they recommend to reduce your taxes. If you're just a regular person (perhaps highly compensated), there's not that much to do. Especially with the cap on State and Local Tax deduction, there's not much room for a professional to ask about deductable things you might have forgotten, because even if you have them, they will likely not add up to the standard deduction.
Now, if you own a business that makes a lot of profit, a professional should be able to advise you on how to reduce or delay tax on that. There's lots of options there, and they might not be apparent.
Similar boat, except also with a kid and a nanny. The year we had to deal with employer taxes for the nanny we tableflipped and stopped doing taxes by hand, going to HR Block instead. Was tempted to try an accountant but the HRB product seemed solid enough to just go with it every year after. Anecdotally it finds credits/refunds that I know I would never have found on a manual tax return. It's not a ton of money but it saves a lot of work.
I had this misconception for a long time, that a tax expert can somehow magically reduce my tax bill. Turns out, I had it backwards. Once the tax year is behind me, everything is said and done. You pay what you owe, doesn't matter if the number comes from TurboTax or a CPA. It's the planning part that's important. And to plan better, you either talk to an accountant before the year starts, or you learn to do tax yourself.
For all Canadians reading this, try WealthSimple Tax (previously SimpleTax). It's pay what you want, and it's a solid product. Nonetheless, tax software should be provided for free by the tax organization (IRS, CRA, etc), it's so stupid to pay for doing your taxes, unless you really need an accountant...
Thanks for the update, I'll have to plunge back into research this year for a decent software. That's too bad, I was happy using their service and always donated.
I've mostly used StudioTax, which is a client run locally: in the past it's been donation-supported, but starting this year you will have to pay CA$ 15 to upload your data. The 2020 version is currently available (but not yet officially certified). It allows you to log into your CRA account and fetch all the available T3/4/5 data that has been uploaded by financial institutions.
1. You can file your taxes for free in the US. You only have to pay if you want to do so through a tax preparation service or software.
2. It's actually pretty easy to use the electronic forms or just use paper.
3. Tax software is good, and a competent tax preparer is even better.
Why we have a tax system which creates so much work there is an entire set of industries (tech, tax preparers, etc) built around it just to pay the government is kind of loony...
You can thank Grover Norquist[1] for that. The Taxpayer Protection Pledge [2] that he promulgates to US republican lawmakers is the primary mechanism though which those legislators justify blocking simplification and streamlining of tax filing. If it's easier for people to pay taxes the government will probably ask for more cash if we implement those systems, right? Therefore it must be blocked according to the pledge! The logic is airtight!
Ironically in reality this is actually pretty much the opposite of taxpayer protection and amounts to additional tax paid to private corporations on TOP of our existing taxes.
Theoretically, the ideas he's talking about make sense. If say, you're a single person w/ no dependents who doesn't itemize making the process much simpler is attractive.
However - as Ted Cruz showed everyone - being able to do your taxes on something the size of a postcard is only possible if just about every specific deduction is cut out.
Once people saw that, it was DoA.
Also, while I'm here, can someone explain what was supposed to replace the IRS in Cruz's plan? (State Governments?) I mean, somebody has to administer and manage this process, however simple it might be.
Even then 90% of the 1040-EZ is instructions on how to actually use the form. If you cut all that out and just have the boxes to fill with labels it's not much bigger than the post card it's just needlessly hard to file.
I recall seeing recently (somewhere in Europe, I think) the idea that because the government tracks this information anyway as people get paid throughout the year, all that is required is basically you (the taxpayer) attesting that the information being submitted is correct.
At that point, you just sign the form and send it back.
Yeah, the only place it really breaks down is where you're on the line between the standard deduction and any itemized deductions and finding out requires going through the whole process with itemized to see if you come out better. I've been right on that line since buying a house and it's annoying every year.
It's also unlikely to happen because a dedicated faction in the GOP specifically want taxes to be as annoying as possible to make people resent it more.
> Also, while I'm here, can someone explain what was supposed to replace the IRS in Cruz's plan?
It wasn't meant to be good government, or even tenable government. It was an idea designed to appeal to stupid people. That is all.
(The failure of such a stupid idea to actually work or be implementable could be spun politically. The spin wouldn't have to be especially plausible, either, because, you know... stupid people)
I assumed PUN was referring to the parts of Norquist's ideas that should actually be taken seriously - spoiler, there are few - as opposed to those which are grounded in antigovernment paranoia and veiled xenophobia.
Part of the reason is because tax software companies pay legislators to make and keep taxes complicated. There is no reason, with the advent of internet and databases, that 90% of people’s taxes can’t be completely automated.
Part of the reason is because more tax rules means more loopholes to take advantage of.
"There is no reason, with the advent of internet and databases, that 90% of people’s taxes can’t be completely automated."
This is an area where there could be a lot of improvement. Many people work at least partially as a contractor and have to self-report and make payments. The self-reporting and making payments is where a lot of the problems start with automation. Employees? Mostly solved except for where people do stuff that isn't paid with employment wages.
"Part of the reason is because more tax rules means more loopholes to take advantage of."
Loopholes are often deliberate ways of encouraging behavior with money. For example, an exemption on mortgage interest lets people avoid paying tax on most of their spend on their mortgage. Why? To encourage people to buy homes. Guess what, people with big, expensive homes with large mortgage payments benefit the most. Another was the infamous Hummer credit in the 90s and 00s where if you bought a big SUV or truck, you could take 100% depreciation on it in the first year. So people bought lots of Ford Excursions, Hummer H2s and other gigantic gas guzzlers. It did help the US auto industry.
> Loopholes are often deliberate ways of encouraging behavior with money.
I don’t buy this. There is an easy way to encourage behavior with money. Give people money in exchange for the behavior.
If the goal is to encourage someone to buy a house, then pay them to buy a house.
The reason politicians don’t do this is because this lays bare all the costs associated with the incentive. Whereas with tax loopholes, they can understate it using whatever assumptions they want.
The tax deduction method allows for loopholes to open up, as well as discrimination by way of making it complicated, and understatement of costs. A straight cash incentive, on the other hand, reduces the avenues of corruption, has a transparent cost, and does the job just as well.
Two thoughts without getting into the morality or ethics of existing law: The legal standard for giving money is different than taking money. A tax incentive that is legal (i.e. mortgage interest deduction) would be illegal as a giveaway (giving money to only taxpayers with mortgages) as it would fail equal protection under the law. Second, often times tax incentives help avoid having the government use taxpayers as the bank. For example, if I take deductions for my dependents on my w-2, I have less money taken out of my paycheck. The other way around, no loopholes, would a) discourage having dependents and b) would force me to act as the bank for the government.
> A tax incentive that is legal (i.e. mortgage interest deduction) would be illegal as a giveaway (giving money to only taxpayers with mortgages) as it would fail equal protection under the law.
This is a good thing, exactly the type of corruption that needs to be eliminated.
>For example, if I take deductions for my dependents on my w-2, I have less money taken out of my paycheck. The other way around, no loopholes, would a) discourage having dependents
The other way around would be to pay you for having dependents. I do not see how that would discourage having dependents.
>and b) would force me to act as the bank for the government.
I do not understand what acting as a bank for the government means.
"This is a good thing, exactly the type of corruption that needs to be eliminated."
I'm not sure this is corruption. Encouraging people to buy a home instead of rent is largely viewed as a positive thing. Helping people afford to have kids is a good thing. Encouraging people to favor green energy is a good thing. Encouraging people to buy a giant SUV like we did in the 90s and 00s? Not as good.
"I do not understand what acting as a bank for the government means."
I would pay more in tax (no deduction) and have to wait for the government to pay me for the kids. They would be taking a loan out of every paycheck. Incidentally, the current income tax system where employers withhold and you get a refund for overpayment is a form of banking on taxpayers. Allowing people with dependents to declare them and reduce the amount withheld is very helpful to lots of not-so-wealthy people's personal cash flow.
>I'm not sure this is corruption. Encouraging people to buy a home instead of rent is largely viewed as a positive thing.
A mortgage interest tax deduction rewards people who purchase a home by borrowing money. The more you borrow, the more you are rewarded. It does not reward purchasing a home. It also disproportionately rewards people who are able to borrow money for a home, and punishes those who cannot, such as descendants of slaves who may not have grown up with the necessary resources to establish the necessary income and credit in order to borrow. Or get past the redlining. And last, but not least, it's a handout to the mortgage banking industry who now has a subsidy for the product they sell.
This simple example shows how easily deductions are corrupted. It's not even really encouraging people to buy a home, as that would have been a simple deduction for a home's purchase price. It's encouraging people to borrow to buy a home.
That's all leaving aside the separate debate of whether or not the government should be rewarding home purchases or not.
>Helping people afford to have kids is a good thing.
How is a deduction/credit on taxes anywhere near the optimal way to achieve this? The government can simply give people cash if it wanted to. The government could provide better parental leave if it wanted to. The government could provide healthcare if it wanted to. A $2k tax credit and a $3k deduction for childcare is far down the list of things that make kids affordable.
>Encouraging people to favor green energy is a good thing.
Or we could be more straightforward and tax fossil fuels for the externalities they cause, thereby raising the price of fossil fuels and making green energy a more sensible option to choose. But that would be bad for our resource consumption driven economy that depends on increasing consumption to meet the budgeted increases in revenues to pay for the ever accumulating debt.
>I would pay more in tax (no deduction) and have to wait for the government to pay me for the kids. They would be taking a loan out of every paycheck. Incidentally, the current income tax system where employers withhold and you get a refund for overpayment is a form of banking on taxpayers. Allowing people with dependents to declare them and reduce the amount withheld is very helpful to lots of not-so-wealthy people's personal cash flow.
This is all clerical. There's no reason the government can't electronically deposit money into your account every week or 2 weeks.
I really don't see any value in debating ethics here. Tax policy is no different than spending policy - it's a tool and can be wielded for better or worse. Sometimes, government gets it right. Other times not. Governments, democracies especially, are made of humans.
interesting project. It never showed up on my searches. thank you for sharing.
Curious tech choices. Coded in C. Deal with raw column numbers as the paper form instead of meaningful aliases. guess it makes it easier to implement at first from the forms but might make it harder when the form updates/add lines.
uses a special format raw text file as input. this is a pragmatic as it can get i guess.
It's good that people are drawing attention to the dark patterns, but not enough outrage is directed at Intuit's lobbying efforts. For most people, the tax situation is simple enough and the IRS has enough info from informational returns to estimate your tax liability. Intuit among others have been fighting against the simplification of the system.
So in the Netherlands, I can file my taxes for free, it takes me less than an hour for me and my wife. It’s also auto populated with all relevant figures. The hardest part is remembering your password for the nationwide single-sign-on service. Some problems are best solved by governments.
If you are an employee in France, your salary is pre-populated in the website of the fiscal administration. My gains from my savings are pre-filed by my bank. During the year, I record my charity donations in a spreadsheet so I don't forget them, and I double-check with the declaration of the previous year to be sure I don't forget anything. Sometimes some categories are changed, but it's not that often. It's more complicated if you are a landlord.
Frankly, the US' overly complicated tax code ends up backfiring. It's of course compounded by Intuit lobbying against simplified filing.
For starters, there's so much complexity to it that unless you use software like this or a CPA it's almost certainly the case you're leaving money on the table. And it also means that if you're a very high net worth individual there are a lot of loopholes that allow you to defer or significantly reduce your tax burden.
Why do you need $50k to work on this? It sounds like you're a developer and you rewards say it'll be ready in April which is only a couple months of work.
It seems that tax law would be something that lends itself well to open source. After all, what is the law but a system of logical rules not unlike software?
It would be great to get an open-source tax library, split into two parts. One can be the library which does the calculations, the other can be any graphical interface for users to use.
I've been using the same non-free service for filing because it saves my info from the previous year and that simplifies the whole process. Filing the federal is free, and they charge something like $30 for filing state. I'm ok with paying it for the time-savings.
I'm okay with paying for tax services as well, I'm not okay with the lies deceit and technological restrictions to prevent people who would benefit from free tax filing from accessing it.
I routinely recommend folks use https://www.freetaxusa.com/ for federal taxes. That being said, that this isn't a not-for-profit and/or government service is pretty ridiculous.
I used that one for years and kept paying for their state filing service, until I finally realized other services also do state for free (if you meet the requirements).. and have actually used TurboTax free service for my state returns since then.
TurboTax hasn't tricked me into doing anything. I am fully aware that all the forms can be completed manually. I can still remember my Dad sitting at the kitchen table for several nights with all the forms and a calculator every year.
The fees TurboTax charges are worth it to me because I don't want to have to sit at the kitchen table every year and hope that I understand the instructions well enough to fill out all the necessary forms. I can't Unit Test my tax forms. But TurboTax can (and does) and thus it's worth it to me to pay a yearly fee for the convenience. They keep up with all the tax code changes and I complete a 45-minute survey once a year. Boom. Done.
Even on TurboTax they're required to provide the basic 1040-EZ form for free all the way to filing, they hide that fact below a LOT of bullshit though to make it hard to find the actually free version of the service.
Knowing the federal government, I can easily imagine it costing MORE than $50/taxpayer. Just we don't pay for something directly doesn't mean it's free.
This is an ideological knee jerk response, it’s not true that only the private sector can create software systems. There are 143 million taxpayers in the United States. If each one pays 50 dollars then that’s seven billion, 150 million dollars per year. I think they probably come with some way to do it a bit cheaper than that.
Are there other services that allow for such easy import of other account data? I have a handful of investment accounts scattered like Wealthfront and Robinhood and the one-click imports from each service feel really seamless.
I don't like coughing up the few hundred dollars every year but I'm also lucky enough to not have to think about it much other than on whatever weekend afternoon I choose to slog through the endless prompts.
Yes. I use tax act which imports my data from most banks and my w-2s from my job. I believe this is a IRS standard protocol to get the data, they don't import from wealthfront, they tell the IRS to give you the wealthfront import data.
I have used this for many years to prepare and file online. It is FREE and uses the IRS forms. No annoying wizards or questions. Anyone can use it, no limitations.
This is why I gave up on online tax filing back in the mid 2000s. There is always some reason you can’t do it for free and you don’t find out till the last step. I’ll just mail in the paper forms, thanks. Only takes a few minutes if you follow the simple instructions.
The Patriot Act (the show) had an episode about this issue, and they debuted a website at the end that has links to multiple free file services: https://www.turbotaxsucksass.com/
Imagine if the USA was like most other developed nations where the government just sends you a receipt for you to verify and your taxes are otherwise taken care of for you. Instead we have Intuit lobbying to make it as difficult as possible, aided by Republicans who want the process to be as unpleasant as possible so people begin to loathe the very concept of taxation (This isn't hyperbole, Grover Norquist and his numerous disciples freely admit this).
Agreed. Living in a functioning society, in the "western" world, is pretty nice and I'm happy to pay for it.
But, having to spend a day or more every March, or pay a CPA a few hundred dollars, is infuriating. My taxes aren't that complicated - two upper middle class salaries, a normal (for dense suburb) mortgage, and no kid at home any more (he flew the coop 3 years ago).
Outside of the years we were impacted by AMT (a whole other rant), the IRS knows exactly what we earn, what we've paid to date, and determining our mortgage obligation should be trivial (submission from bank to IRS or similar). They should just mail me an index card that says "your good!" or "you still owe $1200" or similar and that's that.
Exactly. I am more than happy to pay my fair share, which is considerable. But I am extremely not happy to have to fight through arcane, barely understandable accounting homework each year - and as a small business owner to boot, shell out a few hundred to a tax service to make sure I don't screw it up doing it myself.
It gets even worse if you are a US citizen abroad. The amount of financial clout means the US can bully other countries into bending to their laws (FATCA) and citizenship-based (global) taxation means I have to shill out several hundred bucks to some specialized accountant just to avoid spending several weekends tabulating things and staying up-to-date on the law changes of the US and my current country :(
If the US wants to improve its image abroad, joining the rest of the world (well, except Eritrea....) and doing residency-based taxation would mean that whenever a US expat is asked what they think about the US (e.g. by someone looking to go there for work opportunity, education), they wouldn't unleash a littany of dire warnings about the pesky taxation issues. My answer is always "yeah if it'll help your career I guess get in the H1B lottery, but be very careful to not pick up that green card or you'll be royally screwed for a looong time to come".
It speaks poorly of some on HN that you would be downvoted for making this argument, which is based on well-known, documented facts. Are there Intuit shills lurking this site?
I've lived and paid taxes in three of the G7 countries, including the US.
For what it's worth, I've had to fill out tax assessment forms of greater-or-lesser complexity in all of them. The US is certainly the worst, but the trope that "all other major economies just take care of the tax for you" isn't exactly right.
So long as you're equally critical of all statements that "aren't exactly right" even when they come from groups that advocate for your political preferences, this is a totally fine and reasonable comment.
My comment is totally fine and reasonable because it's based on me sharing my personal experiences with others on HN, who may not have similar experience. The insinuation that this somehow comes from a viewpoint of political bias in uncalled for.
It's because his comment is essentially "Republicans are evil and the US should be more like Europe." Even if you agree with that, by now you're probably tired of seeing it on every single thread everywhere.
If there are any republican commentators willing to defend this policy I'd love to hear their reasoning. This one does seem, almost objectively, evil imo.
Its a predominantly republican politician led position. Likely not mainstream among actual constituents, just corruption among the politicians. But if there are any who can defend the practice, I'm interested to hear.
I think his comment is more like "Lobbying is evil, and is the same as bribery, and has the same outcomes". (i.e. Rich people and companies get laws that are favourable to them)
Bribery (lobbying) should be banned - for all political parties.
I mean, if you're referring to the Taxpayer First Act (which specifically had stories around Intuit benefitting from the Free File provision https://www.esquire.com/news-politics/a27091346/democrats-tu...) this was bipartisan and it's disingenuous to blame a single party.
Given all the importing it does from the variety of finance places, what they charge is reasonable. It all depends on your opportunity cost and value of your time.
I do agree that most people really don't need it, and they need to simply report their wages and submit an 1040EZ.
It's about their unethical reneging on the agreement they made, where they agreed to provide a free product in exchange for the government not providing one - but it's a free product carefully hidden with the darkest of dark patterns.
I totally agree that making you pay to file when it should be free is scummy, but the linked article completely ignores that the first non-ad result is from the IRS page on how to file your taxes for free.
No, they talk about it in-depth about half-way down.
> The fifth link, a government site, looked like it would take us to the actual Free File program.
>
> But not so fast! When we clicked, and then clicked through to a second page, we found a whole new set of choices and restrictions. Each of the 12 companies that have signed on to the deal with the IRS offer their own Free File product. But they all have different requirements based on age, income and location.
They do, but perhaps the IRS has since changed things, since what I see on that link is not what is pictured in the article. (Ok, I see the article is from 2019, which is why it's so different)
I was confused by this too.... I've never filed my own taxes; I've always paid a tax preparer. I've always thought that I could file them myself for free if I wanted to, but just felt more comfortable paying someone who does it professionally and knows more ins-and-outs of tax law. Is that not true - can I not file myself for free if I make more than $66k/yr? I looked here [1], and it looks like I can? It's still not entirely clear to me...
You definitely can, you'll just have to fill out a bunch of complicated forms (accessible via the "Use Free File Fillable Forms" button on the page you linked), which is what you pay your accountant to do, and that anyone has the option to purchase TurboTax software to assist with.
The article leaves this out.
Yes, it would be great if the IRS were able to provide software as slick as Intuit's to assist with this, and it would also be nice if Intuit didn't use so many dark patterns, and at the same time they've built a product that makes self-filing far easier to do correctly than any other option out there.
Maybe, but if you're in the over $72k category (I guess the article is from 2019 and the threshold has changed) it's literally just electronic versions of the paper forms which I consider a huge waste of my time and mental energy. Intuit doesn't charge you _and_ make you do the work. Intuit charges you _instead_ of making you do the work, just like you'd pay an accountant for. The IRS doesn't even offer guidance on which forms you need.
> If you choose Free File Fillable Forms as your Free File option, you should be comfortable doing your own taxes. Limitations with Free File Fillable Forms include:
> It won't give you guidance about which forms to use or help with your tax situation
> It only performs basic calculations and doesn't provide extensive error checking
> It will only file your federal return for the current tax year
> No state tax return option is available
I don't want to "do my own taxes". That's the whole point of paying for a service that makes it easier. And also it's not even available right now:
> Free File Fillable Forms reopens Feb. 12, 2021 at noon ET.
I am not sure if you got that quote from the paywalled article, but I was just looking at TurboTax this year, and they have removed the income requirement. But having experience with others dealing with Turbotax; I have nearing zero expectation that they will not be immensely unethical or at the very least be intentionally grey in their ethics.
What I mean by that is that even for people who were eligible for doing their taxes for free last year, they offered additional services like e-file (literally sending a file akin to the effort and cost of sending an email) at some ridiculous price, and then for those having to do state taxes both charging for the state return software (understandible) and the state e-file … but at rates that ended up tallying up to higher than if the "free" filer had just bought Trubotax with state and free e-file at some discounter or in some cases even at higher rates than the full price.
What a lot of people are not aware of is just how utterly evil that these "tax preparer" companies are in their practices, they aren't just unethical or even corrupt, they are deliberately evil and even criminal in their methods. The leaked emails from TurboTax illustrate that. They actively sabotage efforts to, e.g., make it possible for citizens to simply upload the tax return or even just the tax form output from the software so that the utter nonsense e-file has to be used that the companies have a gate around.
It's just one of the many ways and things that are modern forms of company stores, traps that are intentionally and deliberately constructed to ensnare and entrap and pilfer from people for little to no value. It's quite literally BILLIIONS of dollars that are drained from the middle and lower classes to file taxes … information the IRS already has.
The reason we have complicated taxes in the US is because US politicians make it complicated. Trump actually did a good job to simplify by increasing the standard deduction and effectively removing AMT. Still its complicated because every politician wants their little tweak.
The tweaks have a purpose, though. Generally when we talk about taxes we are thinking about funding the core services that everyone (yes, everyone) agrees on. But the system is used to do two other semi-related things. One is to reward one's constituency with tax breaks and the other is to install direct or indirect penalties on behavior.
Taxes-as-funding can be simple. Those are revenue type conversations that also happen in every business on earth.
Taxes-as-behavior-modification is where things get truly convoluted because you have different groups tacking on their own dis/incentives (so the thing as a whole will lack cohesion) and the number of edge cases simply explodes. "We want A, but not B, but A->B so we'll add a new rule, but that..."
Last year however I got all the way to the end of the process where they revealed I made too much and had to pay. That felt extremely unethical, as the information required to come to that conclusion was available far earlier in the process.
And yet what am I going to do but use turbo tax again. The perceived risk and effort of using a non-automated system to fill them out doesn't seem worth the cost.