Comment by wildzzz
16 hours ago
The IRS already has most of my tax information and knows the tax code. Why must I deal with a third party (and potentially have to pay them) to electronically file my own taxes?
16 hours ago
The IRS already has most of my tax information and knows the tax code. Why must I deal with a third party (and potentially have to pay them) to electronically file my own taxes?
The same reason you pay exorbitant sums for healthcare, education, transport and much more.
The US is not a county optimized to provide quality services inexpensively. It is a business optimized to maximize profits.
You don't have to do that. There is no such requirement. You can fill out the forms for free.
But that's a bad solution. (Otherwise why do TurboTax et al even exist in the first place?)
IRS should just have a public free filing solution for everyone. If you have complicated taxes or want to do your own filing, you can still do that.
They do. https://www.irs.gov/e-file-providers/free-file-fillable-form.... And no it isn't a bad solution. I use it every year.
You don't have to pay.
https://www.irs.gov/e-file-providers/free-file-fillable-form...
As for "having most of your tax information", they don't. They know your reported income. You see that on your W2s/1099s/etc. What they don't know is whether or not you had a kid this year, or whether you lost a kid this year, whether you got married or divorced, if your spouse is claiming the kids this year or not, the number or amount of your charitable contributions, whether you have deductible mileage expenses, or a million other things.
This argument could be put in a museum as a perfect illustration of the "Perfect is the enemy of good" maxim.
Would just relying on the information from your employers cover all possible edge-cases? No.
Would it dramatically simplify the process for (tens?) millions of people? Absolutely.
The info that the IRS has from your employer is maybe 5 boxes on your return. Literally takes a few minutes to take the info from your w-2 and put it on a 1040.
The number and type of people living in your household is not an edge case. It applies to almost everyone, has huge tax impacts, and the IRS doesn’t know.
1 reply →
In France the web site asks you if your household details changed.
No? 2 more clicks and you are done.
Yes? 2 + nr of changes clicks and you are done. Took me an extra 5 seconds when my son left.
You can make your taxes as complcated as you want but for 95% of the population foling taxes takes a few minutes.
Filing a 1040 in the US is also very easy and takes a few minutes and can be done for free.
Another factor most people are ignoring is that state taxes are filed at the same time and each state has its own separate system. These third parties let you fill in and file both at the same time. It would be nice if the US gov did this too but it requires a total restructuring of the American system, and Intuit’s lobbying has nothing to do with why it hasn’t happened or for that matter why the tax codes looks like it does.
1 reply →
I use free fillable forms. There are zero people on the planet who insist they are remotely as easy as Direct File.
Do these other countries described above know whether you had a kid or got divorced?
Yes, in many European countries dependents and marital status changes are registered in a national civil registry, which the tax authority can query directly.
Countries like the U.S., Canada, the U.K. cannot easily do that without huge data-sharing reforms.
Even the US knows that you've had a qualifying event, they're just being stubborn.