The IRS Has an Answer to TurboTax

https://www.theatlantic.com/technology/archive/2024/03/irs-direct-file/677818/

by andsoitis • 2 years ago

59 46 2 years ago

theatlantic.com

koala112• 2 years ago

Finally. Even with the limited scope it's still a step in the right direction

toomuchtodo• 2 years ago

https://directfile.irs.gov/

willcipriano2• 2 years ago

About half of Americans pay no effective tax anyway, why not set a threshold say 100k a year and if you are under it you owe no federal taxes and don't have to file anything. Can make up the difference by taxing capital gains at the same rate as W2 income.

Something1234• 2 years ago

Because of the earned income tax credit. It’s involved and stupid how much welfare is done through that program.

Plus congress wants the poor idiots who vote republican to feel like taxes are a punishment otherwise how will they whip up their base.

triceratops4• 2 years ago

Correction: they want all poor idiots (I include myself here) to feel like taxes are a punishment so that they will want to vote Republican.

autoexecbat• 2 years ago

Does the IRS have way to know all of your income?

willcipriano2• 2 years ago

Your bank, employer, cash app and brokerage all report to the IRS so unless you are a drug dealer or similar, yeah for the most part they already know it.

Heres the best bit, people working under the table are going to be making less than 100k generally so it doesn't really matter, anyone making real money will be making big enough waves in the financial system to be detected, small movements of cash doesn't matter at this scale. The highly taxed routes (capital gains) are also already highly policed for tax purposes so no transition is needed there.

andrewmcwatters5• 2 years ago

It's not really an answer to TurboTax, because it's not good enough. I'll continue to pay Intuit for now. It's relatively speaking a small price to pay for something done well.

nextworddev• 2 years ago

What is an example of something that TurboTax does better?

andrewmcwatters5• 2 years ago

State taxes as well. The IRS didn't partner with individual states for this initiative. They also don't have limits on interest income or household income, which make this worthless for people who file high income returns.

rpdillon2• 2 years ago

This is correct. According the article:

Direct File isn’t perfect—the program is available in only 12 states, and it isn’t able to handle anything beyond the simplest tax situations—but it’s a glimpse of a world where government tech benefits millions of Americans. In turn, it is also an agonizing realization of how far we are from that reality.

According to directfile.gov, those states are: Arizona, California, Massachusetts, New York, Washington, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, and Wyoming.

I have no great love of Intuit, but this is not ready for prime time.

andrewmcwatters5• 2 years ago

I'm getting tired of posting here on HN at all, honestly. It's just a bad experience. Anyone can see TurboTax is clearly a better product. But whatever, sure the IRS releasing a product with a $1,500 interest income limit better than TurboTax?

You might as well just file your taxes on physical paper and mail it by snail mail.

insane_dreamer• 2 years ago

After using TT and HRBlock for years, this year I used CashApp Taxes which is completely free and handles almost all cases (except if you earn income abroad and a few other edge cases). Surprisingly nice UI that walked me through all the questions with links to IRS site with form. Wasn’t expecting it to be so good. (And I have more complicated than most - rental props, investments, W2 plus self employed, college expenses, married etc. And it’s not trying to upsell anything (no ads, premium ver, annoying gimmicks). Looks like Dorsey decided to spend a bunch of money to make people’s lives easier. I hope it continues.

Cheer2171• 2 years ago

Sounds like your data is the product, then. From https://taxes.cash.app/pages/privacy-policy :

Service Providers: We may share information with service providers, as permitted by law, in order to have them perform on our behalf activities we are permitted to conduct under this Privacy Notice and our Terms of Service. This includes things like helping us design or operate our Services, process and administer your financial transactions, preventing fraud and complying with state and federal law. These service providers are authorized to use Personal Information only as necessary to provide these services to us.
With advertising partners who help us run our advertising campaigns, analyze our site, run contests, special offers, or other events or activities, and track metrics on our behalf or in connection with our Services.
Affiliates: We may share certain information with our affiliated companies, such as Block, Inc., formerly known as Square, Inc. (the "Company") to help us provide our Services and manage your account.
As Part of a Corporate Change: We may disclose and transfer information we've collected to a third party as part of, or in preparation for, a change of control, restructuring, corporate change, or sale or transfer of assets

The affiliates clause is incredibly broad and would let them sell your tax returns to anyone, as long as it helps them provide the service. If the service isn't profitable without selling your tax returns, then that is all the reason they need.

DeepYogurt• 2 years ago

Some anecdata, but the freefillable forms interface has a LOT more validation on it this year than it did last year.

triceratops4• 2 years ago

The government requires us to pay taxes. It also requires us to file tax returns. It's unconscionable that we have to pay a third-party to fulfill our legally-mandated obligations. It is way past time for tax filing to be made available for free at all levels of government.

(Don't come to me with paper forms or FreeTaxUsa or whatever. FREE IRS software should be able to handle taxes of any complexity and situation. If they can't handle a scenario in their software, they shouldn't be allowed to collect any taxes resulting from the law that created the scenario)

randerson• 2 years ago

Related, but it's also unconscionable that the tax code is so complex. My CPA once had to bring in a specialist because he didn't know how to report something. A few times we've run into "gray areas" that were "open to interpretation". I double checked with a second CPA who said the same thing. This system needs an overhaul.

BHSPitMonkey• 2 years ago

Free File Fillable Forms is offered without limitation, and should handle any situation. The problem is that this is still too intimidating for most people without a guided wizard or a human advisor because of the intrinsic complexity of our tax code and the amount of data entry involved.

https://www.irs.gov/e-file-providers/free-file-fillable-form...

vagab0nd• 2 years ago

Last time I tried this, the form doesn't do automatic calculations. Is that still the case?

triceratops4• 2 years ago

Those are just paper forms online. I'm not talking about that.

kwertyoowiyop3• 2 years ago

The IRS should open-source at least the ‘rules’ part of the code, with enough functionality to let people add new forms. I think they’d get a lot of contributions and good QA.

EMIRELADERO• 2 years ago

The IRS seems subject to FOIA. I wonder if people could get together and request that.

HenrikB• 2 years ago

FOIA = Freedom of Information Act (United States)

https://en.m.wikipedia.org/wiki/Freedom_of_Information_Act_(...

malshe2• 2 years ago

This is very interesting. Is it difficult and/or expensive to file FOIA? I have never done it but I am aware of a few academic friends who have used it for their research work. However, I believe their universities handled the paperwork and expenses.

gamblor9562• 2 years ago

The rules part of the tax code has been open source for a century.

It's called the Federal Register.

kwertyoowiyop3• 2 years ago

I meant the program’s code, to add more of the tax rules and forms to it.

throwway120385• 2 years ago

People say a lot of bad things about the IRS, but my wife and I have had to call them a couple of times and the representatives are incredibly helpful and try really hard to solve the problems we've brought them.

The only complaint I have is that last year and the year before the IRS did not have enough representatives to staff the phone lines to have short queue times, so each call to the IRS took several hours to complete. So I was really excited to see the IRS get more funding this year. I believe they are trying to do the right thing but are often hampered by funding and by politics.

fragmede• 2 years ago

People say a lot of bad things about the IRS, but

that probably has more to do with having to pay them "their" hard earned money than anything to do with how pleasant it is to interact with their customer service department.

_mlbt• 2 years ago

Fun fact, the US did not have a federal income tax until 1861 to help fund the Civil War. Also there are 8 states that do not have state income tax.

The IRS Has an Answer to TurboTax

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