Comment by dpark
2 days ago
> The average HNer, who is fairly literate and well-informed about tax-prep, tends to misunderstand the situation.
The fact that TurboTax is cheaper than a local CPA does not change the fact that Intuit actively lobbies to prevent free tax filing.
In a sane world the IRS should send a letter to every tax-paying household in February that says “we owe you X”, “you owe us X”, or “your taxes are complex, please work with a tax specialist”. Also in a sane world this would be free and the government would be incentivized to simplify the tax code so that as many people as possible were in one of the first buckets. In our world the government is aggressively lobbied for complex tax codes and prevention of free tax filing.
> A regular person's taxes can always be done electronically for free, or if they really want, for $20-$100 through tax prep software.
Define “regular”. Per TurboTax, only 37% of people qualify for free filing.
I have never tried to go through the TurboTax free file route but based on my experience with the paid service, I imagine they aggressively upsell free filers with the exact same scare tactics you associate with CPAs.
I suspect that GP"s "everyone can file free" is talk about Free File Fillable Forms, not TurboTax
Which is free for nearly everyone, but is only marginally better than paper filing your own taxes.
I suspect GP is simply misinformed about the reality of the situation. They also explicitly state “you can already do it for free if you want to, it just requires a third-party”.
They are missing the context that only a fraction of filers are eligible to use free filing and that TurboTax paid something like 140 million to settle claims that they are misleading filers. That suit is why they now admit only 37% of people are even eligible to file for free.
Free Fillable Forms is free for everyone. It is technically a third party. It’s very simple if you have the average tax filing situation.
There are also other services that provide free efiling regardless of income, it’s not just TurboTax.
At the end of the day, you can always do the paperwork if you really don’t want anyone seeing your taxes and mail it. Could it be better? Oh sure, but it’s difficult for me to feel very passionate about it.
> In a sane world the IRS should send a letter to every tax-paying household in February that says “we owe you X”, “you owe us X”, or
As mentioned in sibling posts, the IRS does NOT have the information it needs to get even close on your taxes. They know your reported income. They do not know your marital status, how you’re going to file, if or how many kids you have and will be filing for, and many other things. These all have MAJOR tax impacts.
An additional factor is state taxes really need to be packaged together with the actual solution.
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