This is great news; no matter how restricted it may be initially, I think having a "guaranteed-free" tax filing system will be great for most people, especially lower-income people.
The private companies have demonstrated pretty clearly that they will do everything they can to avoid people actually having free tax filing, and while ~$50-100 might not seem like a ton of money, keep in mind that at the current United States minimum wage ($7.25 as of this writing), it would take upwards of working 6-14 hours just to pay for tax filing. $100 is a lot of money when you're not a yuppie software engineer.
I suspect I did enough crazy stuff with stocks this year that it probably won't apply to me at first, but hopefully by 2025 or 2026 I can stop giving money to Intuit or Jackson Hewitt.
I find it bizarre that this is even a market in the US. I would think enabling people to do their taxes is a basic task of the government. Where I'm from the government provides a very simple click through filing system. Most information is auto filled from info the government already has or is manditorily shared with it such as my income as reported by my employer and any tax withholdings performed by them, securities holdings at brokers, houses registered on my name etc. I basically just have to click 'yep, that all sounds right', and I'm done. The tax authorities slogan over here is "we can't make doing your taxes fun, we can make it easy".
Just print out the sheet from your broker of all the trades you did with the end result of gains circled. Send that in. You should be ok from doing anything more complex.
> keep in mind that at the current United States minimum wage ($7.25 as of this writing), it would take upwards of working 6-14 hours just to pay for tax filing
Relatively few people in the US earn the Federal minimum wage. It's less than 1/2 of 1% of the labor force. It's a very poor reference for anything in terms of personal finance comparisons.
You can walk into a CVS or Walgreens and earn $15 / hr as the minimum scanning barcodes with zero experience, zero job history, as a teenager. You'll get heavily subsidized health insurance, dental, vision, and PTO.
On top of that, the majority of US states have a higher minimum wage than the Federal.
If you're still earning the Federal minimum wage at this point, it's almost always by choice (if you don't want to work for Costco, Walmart, Target, CVS, Walgreens, et al.).
There are lots of comments along the lines of "xxx is cheap"
Why on earth do you need a third party for your tax calc and resolution? It is surely the antithesis of the "land of the free" and all that stuff.
In the boring old UK I login to a govt. run website to do my annual tax self assessment. My P60 is already filled in (that's my PAYE - pay as you earn, my normal salary) I'm a company director too so I have dividends and expenses and offsets etc to worry about. It takes around an hour to complete.
Most UK employees don't do self assessment. PAYE is such a simple and obvious idea - routine taxation should be done by routine.
> Most UK employees don't do self assessment. PAYE is such a simple and obvious idea - routine taxation should be done by routine.
Just to double down on this, what gerdesj is describing only affects a very small portion of workers. For those who _don't_ do the steps above the process is:
- It's automatically taken out of your pay, and you don't do anything.
> Why on earth do you need a third party for your tax calc and resolution? It is surely the antithesis of the "land of the free" and all that stuff.
Because the IRS isn't allowed to tell you what you owe. You're supposed to calculate that yourself... (And it's so damn complicated that it's worth paying someone to do it, unless you were the kid who did the math textbook for fun.)
Eventually, the IRS calculates what they think you owe, and if you underpaid, they send you a bill. You can respond explaining why they are wrong, or pay. The interest is so low that, as long as you don't goof up every year, you're better off risking underpayment than overpayment.
Honestly, the system would work better if the tax prep software could see all the information the IRS has, because then it would be easier to correct their mistakes and harder to make mistakes.
You're expecting coherency in the American libertarian mindset. There is none. "why should the government control the means of tax filing! I need to be free to pay a private company to do it!"
Exactly. Here in the UK I get paid a salary and so my tax is just automatically calculated and deducted from my pay. Then yearly my taxable benefits are calculated by payroll and deducted from next years taxes
I've been using FreeTaxUSA for a while now to do my taxes, and I like it very much. (If you use TurboTax or H&R Block or something, I strongly recommend giving FreeTaxUSA a look). I was sort of wondering if the IRS would just buy them wholesale and use that as the free file software, since it's already "finished" and making another one would be duplicated effort. But is there precedent for that, the government just buying a private company for its IP?
I gave FTuasa a go after seeing it mentioned here a lot. Unfortunately it seems the investment part is very manual compared to TurboTax. I have a couple of robotrader , brokerage accounts etc. on TurboTax it’s a few clicks and that’s imported, FTusa is tediously transcribing numbers off dozens of forms that I have no idea if I’m doing it right.
There is no secret sauce with free tax usa or any of the others. It asks you questions and auto fills a pdf that ends up being surprisingly short in the end. Setting aside for a moment the window dressing on the ui and having to support all these concurrent users and their accounts, what it actually does is so simple. It really feels like the sort of site where the would make a good assignment for an intro to html class.
One thing I really want to see is an official form where if you answer all the questions, to the best of your knowledge correctly, protects you from liability for incorrectly filing your taxes.
End of the day with TurboTax and co, you, as expected, get a "not our system, not our problem" type response when dealing with the post-filing ramifications.
There seems to generally be a lot of "I'm not sure if I did it right" anxiety in the general population.
protects you from liability for incorrectly filing your taxes.
In practice, it's not really needed. The thing is (and I realize that it's not the general perception) if you sincerely try to file your taxes and you screw up, the IRS will generally work with you to fix things. Sure, if you go all sovereign-citizen/Wesley Snipes and refuse to acknowledge taxes they'll kick in the door and take all your stuff. But if you accidentally report select head-of-household instead of single, and you can explain why you did, the IRS won't ruin your life.
It could be so much easier. In most of Europe "filing" your taxes involves getting a short letter essentially saying you made $x, and <owe/are owed> $y, with short return forms to either agree, or file an appeal.
If you make a good faith attempt at filing your taxes, you won't need liability protection. If you screw it up, you'll get a (relatively) polite message from the IRS that your taxes were screwy and you owe them money (or, occasionally, they owe you money).
This is only tangentially-related, but I know I'm asking the right audience: I switched, blissfully, away from Quicken/Quickbook/Xero/all that heavy crap to very simple and elegant textfile-based accounting (ledger/hledger) and it's been the best and most flexible accounting experience I've ever had. I finally feel completely in control of my companies' books.
Is there an equivalently-blissful tax-filing software/service? I don't want to go back to TurboTax, and with several single-member LLCs I'm probably beyond the scope of the IRS' free service.
If you're looking for the same level of manual control because you don't want the "wizard" interface, you should use "Free File Fillable Forms" [1], which is the product of a public-private partnership with the IRS.
It's literally just filling out the paper forms except in a web interface and it does most of the math for you. And then you can file electronically for free regardless of your income level, and it produces a final PDF with all forms filled out for your files.
It can be tricky to do your taxes the first time around depending on their complexity, but the good thing is that once you figure it out, you just use the previous year's PDF's as a reference for the current year's. The lines move around a little bit year-to-year but it's usually the same idea. And it becomes pretty obvious what has changed (that requires research), and you can figure out if anything has changed in your own financial situation that warrants filling out a new line or new set of forms.
(I don't believe there's anything specifically textfile-based. But this is definitely the electronic version of doing your taxes "manually" with full control.)
With Beancount, I use metadata tags in my chart of accounts for the tax form and line number, e.g.
2017-01-01 open Expenses:GA:Insurance USD
tax_form: "1040 Schedule C"
tax_line: "15"
tax_description: "Insurance (other than health)"
I can then report my transactions based on the tax_form and tax_line attribute, which gets me much of the way there. I still have to do the math on derived lines on the forms, but this at least makes sure the inputs are gathered correctly.
Being able to write comments is also super-useful. A real life example:
; We can make a "Section 1.263(a)-1(f) de minimis safe harbor election" to
; treat repairs and improvements to tangible property as an expense, which
; would otherwise have to be capitalized. A statement that we are making the
; election must be attached to our tax return and should include name, address,
; and Taxpayer Identification Number. Under the election, we must apply the de
; minimis safe harbor to all expenditures meeting the criteria for the election
; in the taxable year. The limit is $2,500 per invoice.
;
; https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations
2016-01-01 open Expenses:RD:Hosting:Repairs:DeMinimis USD
tax_form: "1040 Schedule C (R&E)"
tax_line: "21"
tax_description: "Repairs and maintenance"
> I switched, blissfully, away from Quicken/Quickbook/Xero/all that heavy crap to very simple and elegant textfile-based accounting (ledger/hledger) and it's been the best and most flexible accounting experience I've ever had. I finally feel completely in control of my companies' books.
I love the idea, but not being an accounting expert (maybe you are), I'd be afraid that some immaturity or lack of expertise in the software would cause a big problem in a critical way. What makes you confident in it?
Also, how do you share data with accountants, etc.?
See, this is the thing that gets me. For almost anyone who fits in this box, you shouldn't have to file in the first place. Not "shouldn't have to pay", but literally, "should not have to send documents to the government telling them how much you owe them" - because they already have all of that information. They should just give you an itemized breakdown and ask if it's correct.
As an expat, I assume that there will be no soon changes to the complicated tax filing that I have to do. Although I am exempt from paying taxes to Uncle Sam, the "tax" that I have to pay to an accountant to fill out the complicated forms is more than enough to make me want to get rid of my citizenship, if that in itself wasn't so expensive.
>Arizona, California, Massachusetts and New York have decided to work with the IRS to integrate their state taxes into the Direct File pilot for filing season 2024.
There's the notable point. If states integrate into it, it's a game changer. No need for the vast majority of filers to use any 3rd party.
I hope this is good! I've been happily using FreeTaxUSA for the last several years, which has a small price for state tax submissions and no gotchas after H&R block jumped me with over a hundred dollars in fees at the end.
Will this system integrate with all the banks, exchanges, registered businesses, and etc? I find that 90% of the time spent on tax filing is gathering data. Turbotax does offer some integration, but the experience was not necessarily smooth.
Is a CSV not a good API? Most systems will allow you to export data in a columnar CSV format. Being able to then import these would solve the problem. "Swivel chair handoff"
> eligibility to participate in the pilot...will be limited to taxpayers with certain types of income, credits and deductions – taxpayers with relatively simple returns. The IRS today announced it anticipates specific income types, such as wages on a Form W-2, and important tax credits, like the Earned Income Tax Credit and the Child Tax Credit, will be covered by the Direct File pilot.
This is what I was mostly curious about. So, I'm guessing things like ISOs, AMT, capital gains from investments etc would not be supported by this service yet.
I'm glad. I've used Cash App Taxes the past few years, and while it's free (including state) and an easy interface, I'm well aware I'm the product. Presumably/hopefully that will not be the case with this new system. I'm in one of the listed states, so I'm ... not exactly looking forward to trying it out, but definitely curious!
Businesses will still need tax assistance. But there is no reason for a person whose income comes only from a salary, interest on savings and a brokerage account to need paid help to file taxes. The IRS already has all of the numbers. They could pre-fill the forms with those numbers and just have the taxpayer approve them.
If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition.
Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly).
FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do.
It's unlikely the IRS offering will be as easy to use or as pleasant as the existing offerings, but it will be a huge shot across all of their collective bows.
Keep in mind the IRS offering a free online service for tax filing does not reduce the complexities of the current tax code - nor does it make for a more fair tax system (one where having means to access professionals reduces your perceived tax liability). This system merely means fewer people need to pay $49 a year to file taxes...
Just as in tech we build things that will get refactored and thrown away, it should be expected certain private sector components might be eventually deprecated when government steps in to provide as a public good.
Enriching oneself at the cost of others really seems like the business modus operandi in the USA these days. It is a win, although only a beginning of what should come.
Will the IRS version also do my state taxes? Can it "slurp" in the statements from my brokerage accounts? Can it do rental income? I have no love for Intuit and all the rest, but even with the constant up-selling and the other BS you have to put up with, it does help me tremendously with what would otherwise be a complicated task that I dread doing every year.
> If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
It was created by a public service. It would be better if they'd just made a rule that those with super simple tax affairs just didn't need to file, as we have in the UK. But there's probably no pork in just making things better.
I would not go that far, but it is hard not to notice how bad the main competitors in that space have gotten. They are using just about every single dark pattern they can possibly get away with. Some competition from a public service may be warranted in this case.
That seems like an overly broad statement. If the companies producing tax filing software were solving a problem for their users then why shouldn't they exist. Even with this new option being offered by the IRS there is still likely room for private companies to solve the same problem (tax filing) in a way which is perceived as better by some users and so still justify their existence.
Declaring taxes in Brazil is free, but it's hard work (if you dabble with stocks, for instance). For 1/5 of the value of the minimum wage you can hire a accountant that does it for you. I think the service is worth it's price. All i have to do is send them a bunch of documents and they make sense out of it.
This is the way it should be here in the US, and this is the way it works in a lot of countries. The tragedy is, we all know it, and we all want it to change, but there are a few people who don't want it to change, and they're empowered to make it that way.
Does that mean I can FOIA for the source code? I ask in all seriousness: I believe some things are withheld/redacted due to "national security" but if they hard-coded mainframe credentials in their source code that's not my fault
Much government source is public domain by default, and they are decent about publishing it. If this is owned by the IRS, then probably it will be public. If its a service contracted out, then perhaps not.
Almost none of the “free” or affordable options work the minute you put in an international address. Uncle Sam is one of the rare cases of taxing its citizens abroad, but everything about getting taxed abroad is more complicated.
California already has one, and it actually has fewer limitations than this federal pilot (it handles itemization and capital gains and such, although that's only because california doesn't have a separate capital gains rate)
This is great, but a lot of people think it will be a Intuit or H&R Block "killer". It won't. People don't pay for the "expert" tax prep, they pay for the hand holding. I have worked for HRB corporate for years and have seen countless people with simple W2's that happily pay $100+ per year just to have an office to go to, to shake a hand and talk to a person about their past year. As long as there are lonely elderly people, these businesses will always be there.
The description of this makes me skeptical. People have been asking for a system where the IRS does your taxes for your, sends you the draft, and you add in any deductions, etc.
They already do your taxes in the background to confirm your return is correct, so this is not significantly more work for them (in fact, it is probably less work).
In some countries with such a system, unless you intentionally lie, you are absolved of legal liability if the government screws up your taxes.
The article makes it sound like they are building a crappy turbo tax clone instead.
>They already do your taxes in the background to confirm your return is correct
This is a common misconception. Most places that send you forms also send them to the IRS (but by no means all places). The IRS makes sure that the information you put in your forms is the same as the forms they got, but they know nothing about your dependents, whether you pay mortgages interest, etc.
Now, the counterpoint to that argument is that c.90% of people just take the standard deduction anyway now that there's not SALT, but the argument there is that we should move completely away from deduction-driven taxes (which is probably the solution).
As for TurboTax et al, those places are not sending your forms to every state tax agency (why do people always forget about state taxes in these threads?), so there's still very much a need for some solution there. Probably IRS data sharing, but good luck getting all the states to agree with the Feds on tax forms (just look at the SALT battle).
Why not start with simplifying the tax code, instead of letting it metasize in complexity, and then laying more complexity on top with software packages?
Do you still have to enter all your data or does it prefill the data it already knows like W-2 and 1099? That’s where the real benefit comes in my opinion.
The fact we have to file income tax is stupid. The IRS knows what you owe (try not filing your taxes or filing them wrong and you'll get a bill from them for what you owe or any adjustments due to your errors), so if you're not claiming anything or have special forms, why is it needed? For people who do a standard deduction there should be nothing to file.
You fill your shopping cart with a bunch of groceries then you have to write down what you think it all costs. The shop keeper then checks if you got it right. Then they call the police for each 12.3th customer who got it wrong. The odds to get it wrong are so big the help of a different company is needed who will add up the shopping cart for you.
I have my home/property loan through a coop (a FCS institution) and so I get dividends every year on my shares. It amounts to about 1.5x my monthly payment. Because of this I have F-income to declare and so most free offerings are off the table for me.
I used the FileFreeUSA and TurboTax Federal Free in the past and it worked well. I just use TT's paid offering now for the F-income declarations.
85% of Americans should only have to return the postcard "this is what we think your situation is". The other 15% have something the government doesn't know and needs to file. The other 10% should have an accountant do their taxes and not software (which leaves a few% lost, not quite complex enough for an accountant, but not enough of them to support software for their situation).
Well, you could have done a variety of things that aren't reported. For instance, donating money/time/goods, winning from gambling/etc, inheriting money/property, winning things/money, face deprecation in assets like real estate, etc. Payroll and taxes have about a million edge cases and it's one of the reasons payroll is such a bloated industry.
I agree it's probably a bit much for most people though and not filing should be akin to not reporting anything else and the IRS should automatically calculate your return and mail a check or a bill if you owe.
There are too many additions to the tax code beyond that. Really, if they cut away 95% of the cruft then it could be dramatically simplified. Everybody has their thing they hold onto for dear life in a tax code.
Retail financial services are a source of misery for low income people. Providers don't want those customers, and it shows. Predatory products and service providers prey on the less well off. Postal banking would be a good next step.
Wouldn't there just be a lot of money made by someone offering free filing and then offering to give you your return immediately for a fee of like 10%? Is anyone doing this?
I hope the next step would be to tax me and let me decide to dispute if I see something not right. Most of us working with a W2 will have our tax filing simplified and cheap.
They already have this in some form, its called “free fillable forms”, and it sucks. For example if there is any minor issue like something off by a cent it fails to submit and won’t tell you which field has an error or what the error is. Although its not officially maintained by the IRS, I don’t think… if i recall Intuit maintains it as part of an (arguably nefarious) agreement with the IRS. It’s presumably intentionally made to suck and hard to find.
I've used it for many years and never had a problem. It is like filling in a PDF form but has a "Calculate" button which runs all the math for you (apart from some tables, etc. which you need to look up yourself). So I'm not sure how you would get off by a cent.
Federal taxes only. Except for entering in your W-2s by hand, it's pretty straightforward. You can save a PDF copy to your local drive. The nice thing is you save postage and do not have to pay someone to prepare / file it for you.
I got some incomprehensible statements one time from a joint venture. I paid an accountant to do my taxes since I couldn't figure out. There answer to me was "I have no idea what this is trying to say, so I'll just submit it. If you get audited let me know and we'll work it out"
I don't think there is any stipulation that the US government can't use products sold by US based companies. In fact, they enjoy doing it. You should ask your elected representatives to prohibit tracking on government websites; if they pass a law, the IRS's web design team will follow it.
I always thought it was weird that something so complex, easy to mess up, and important to the government would require a third party external dependency. For a while towards the end it really kinda became a shining example of late stage capitalism. You, for all intents and purposes, NEEDED to do business with one of these handful of entities or you are in violation of the law. If you can't afford that you'll have to do this literally impossible stack of paperwork instead.
The "stack of paperwork" is definitely far from impossible.
You have form 1040, which gives you a run-down of every possible form you need to reference. You fill out the boxes with the info it wants, then you go down the list, filling in each number box that applies to you: Got W-2s? Probably, attach 'em and sum them up. See a phrase you don't recognize? Read the relevant instructions. Got interest? Time to fill out a Schedule B, which itself references some other forms, and attach some 1099s. Sell any investiments? Schedule D, which might have you fill out an 8949 (strictly speaking, you can skip this one if all your investments have declared basis on your 1099-Bs that you received from your brokerage). If you think you might have more deductions than the standard, there's Schedule A, but for most people you can safely skip that one and take the standard. Taxable income determined!
Then the taxes section contains a bunch of forms that apply to you if you're in certain situations, maybe you have a kid (Schedule 8812), the instructions are very helpful in telling you what you need to care about here. The first box is important, it includes your income tax which the instructions will tell you how to calculate.
Sum up your witholdings from the W-2s and 1099s to figure out how much you've already paid the government, then figure out if you owe the fed money or they owe you.
Sign, stick in an envelope, and send. Whole process takes a couple hours the first time, when you need to learn what you actually need to fill out, and in future years less than 2 hours.
If you can read at a 6th grade level and do basic addition and subtraction you can fill out your tax forms.
tombert|2 years ago
The private companies have demonstrated pretty clearly that they will do everything they can to avoid people actually having free tax filing, and while ~$50-100 might not seem like a ton of money, keep in mind that at the current United States minimum wage ($7.25 as of this writing), it would take upwards of working 6-14 hours just to pay for tax filing. $100 is a lot of money when you're not a yuppie software engineer.
I suspect I did enough crazy stuff with stocks this year that it probably won't apply to me at first, but hopefully by 2025 or 2026 I can stop giving money to Intuit or Jackson Hewitt.
johnmaguire|2 years ago
[0] https://www.freetaxusa.com/
pipodeclown|2 years ago
nashashmi|2 years ago
oh_sigh|2 years ago
adventured|2 years ago
Relatively few people in the US earn the Federal minimum wage. It's less than 1/2 of 1% of the labor force. It's a very poor reference for anything in terms of personal finance comparisons.
You can walk into a CVS or Walgreens and earn $15 / hr as the minimum scanning barcodes with zero experience, zero job history, as a teenager. You'll get heavily subsidized health insurance, dental, vision, and PTO.
On top of that, the majority of US states have a higher minimum wage than the Federal.
If you're still earning the Federal minimum wage at this point, it's almost always by choice (if you don't want to work for Costco, Walmart, Target, CVS, Walgreens, et al.).
zeroonetwothree|2 years ago
up2isomorphism|2 years ago
freeone3000|2 years ago
gerdesj|2 years ago
Why on earth do you need a third party for your tax calc and resolution? It is surely the antithesis of the "land of the free" and all that stuff.
In the boring old UK I login to a govt. run website to do my annual tax self assessment. My P60 is already filled in (that's my PAYE - pay as you earn, my normal salary) I'm a company director too so I have dividends and expenses and offsets etc to worry about. It takes around an hour to complete.
Most UK employees don't do self assessment. PAYE is such a simple and obvious idea - routine taxation should be done by routine.
maccard|2 years ago
Just to double down on this, what gerdesj is describing only affects a very small portion of workers. For those who _don't_ do the steps above the process is:
- It's automatically taken out of your pay, and you don't do anything.
That's it.
gwbas1c|2 years ago
Because the IRS isn't allowed to tell you what you owe. You're supposed to calculate that yourself... (And it's so damn complicated that it's worth paying someone to do it, unless you were the kid who did the math textbook for fun.)
Eventually, the IRS calculates what they think you owe, and if you underpaid, they send you a bill. You can respond explaining why they are wrong, or pay. The interest is so low that, as long as you don't goof up every year, you're better off risking underpayment than overpayment.
Honestly, the system would work better if the tax prep software could see all the information the IRS has, because then it would be easier to correct their mistakes and harder to make mistakes.
willdr|2 years ago
yjftsjthsd-h|2 years ago
You don't; you can download the forms and fill them out yourself. It's annoying but doable.
That said, it really should be better; your description sounds like a good outcome.
ChrisRR|2 years ago
Analemma_|2 years ago
hammock|2 years ago
The government's preference would probably be to contract with them and license it.
dalyons|2 years ago
I reluctantly gave money to TT again.
asdff|2 years ago
Eumenes|2 years ago
parhamn|2 years ago
End of the day with TurboTax and co, you, as expected, get a "not our system, not our problem" type response when dealing with the post-filing ramifications.
There seems to generally be a lot of "I'm not sure if I did it right" anxiety in the general population.
Anechoic|2 years ago
In practice, it's not really needed. The thing is (and I realize that it's not the general perception) if you sincerely try to file your taxes and you screw up, the IRS will generally work with you to fix things. Sure, if you go all sovereign-citizen/Wesley Snipes and refuse to acknowledge taxes they'll kick in the door and take all your stuff. But if you accidentally report select head-of-household instead of single, and you can explain why you did, the IRS won't ruin your life.
TylerE|2 years ago
OkayPhysicist|2 years ago
hiatus|2 years ago
unknown|2 years ago
[deleted]
nlh|2 years ago
Is there an equivalently-blissful tax-filing software/service? I don't want to go back to TurboTax, and with several single-member LLCs I'm probably beyond the scope of the IRS' free service.
Anyone have any suggestions?
crazygringo|2 years ago
It's literally just filling out the paper forms except in a web interface and it does most of the math for you. And then you can file electronically for free regardless of your income level, and it produces a final PDF with all forms filled out for your files.
It can be tricky to do your taxes the first time around depending on their complexity, but the good thing is that once you figure it out, you just use the previous year's PDF's as a reference for the current year's. The lines move around a little bit year-to-year but it's usually the same idea. And it becomes pretty obvious what has changed (that requires research), and you can figure out if anything has changed in your own financial situation that warrants filling out a new line or new set of forms.
(I don't believe there's anything specifically textfile-based. But this is definitely the electronic version of doing your taxes "manually" with full control.)
[1] https://en.wikipedia.org/wiki/Free_File#Free_File_Fillable_F...
dpifke|2 years ago
Being able to write comments is also super-useful. A real life example:
wolverine876|2 years ago
I love the idea, but not being an accounting expert (maybe you are), I'd be afraid that some immaturity or lack of expertise in the software would cause a big problem in a critical way. What makes you confident in it?
Also, how do you share data with accountants, etc.?
jjulius|2 years ago
Arizona
California
Florida
Massachussetts
Nevada
New Hampshire
New York
South Dakota
Tennessee
Texas
Washington
Wyoming
Someone please correct me if I'm wrong.
enahs-sf|2 years ago
InitialLastName|2 years ago
silisili|2 years ago
etskinner|2 years ago
#Income reporting
W-2 wage income
Social Security and railroad retirement income
Unemployment compensation
Interest of $1,500 or less
#Credits
Earned Income Tax Credit
Child Tax Credit
Credit for Other Dependents
#Deductions
Standard deduction
Student loan interest
Educator expenses
LordDragonfang|2 years ago
amalcon|2 years ago
roshin|2 years ago
jaywalk|2 years ago
fire|2 years ago
pastor_bob|2 years ago
There's the notable point. If states integrate into it, it's a game changer. No need for the vast majority of filers to use any 3rd party.
lbrito|2 years ago
datadrivenangel|2 years ago
greg7mdp|2 years ago
hintymad|2 years ago
whalesalad|2 years ago
ssalka|2 years ago
This is what I was mostly curious about. So, I'm guessing things like ISOs, AMT, capital gains from investments etc would not be supported by this service yet.
t3rabytes|2 years ago
Income reporting
-W-2 wage income
-Social Security and railroad retirement income
-Unemployment compensation
-Interest of $1,500 or less
Credits
-Earned Income Tax Credit
-Child Tax Credit
-Credit for Other Dependents
Deductions
-Standard deduction
-Student loan interest
-Educator expenses
tiltowait|2 years ago
droptablemain|2 years ago
not2b|2 years ago
Alupis|2 years ago
If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition.
Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly).
FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do.
It's unlikely the IRS offering will be as easy to use or as pleasant as the existing offerings, but it will be a huge shot across all of their collective bows.
Keep in mind the IRS offering a free online service for tax filing does not reduce the complexities of the current tax code - nor does it make for a more fair tax system (one where having means to access professionals reduces your perceived tax liability). This system merely means fewer people need to pay $49 a year to file taxes...
toomuchtodo|2 years ago
wolverine876|2 years ago
I support the IRS's new service, as a general matter (i.e., without knowing details), but you raise a serious issue.
RicoElectrico|2 years ago
whyenot|2 years ago
robertlagrant|2 years ago
It was created by a public service. It would be better if they'd just made a rule that those with super simple tax affairs just didn't need to file, as we have in the UK. But there's probably no pork in just making things better.
SanderNL|2 years ago
lr4444lr|2 years ago
Also, my wife paid a joint filing online under my SSN, and the system couldn't figure that out and claimed we were in arrears. I'm not hopeful.
A4ET8a8uTh0|2 years ago
sriram_sun|2 years ago
czbond|2 years ago
All other taxpayers will continue to use systems that ideally maximize deductions as government continues to tax endlessly.
unknown|2 years ago
[deleted]
markkanof|2 years ago
atum47|2 years ago
sircastor|2 years ago
I hope this IRS effort works out.
oldbbsnickname|2 years ago
https://www.propublica.org/article/inside-turbotax-20-year-f...
mdaniel|2 years ago
h2odragon|2 years ago
NegativeK|2 years ago
toastal|2 years ago
reustle|2 years ago
WheelsAtLarge|2 years ago
ksherlock|2 years ago
Rebelgecko|2 years ago
Tempest1981|2 years ago
https://news.ycombinator.com/item?id=36701706
Vixel|2 years ago
hedora|2 years ago
They already do your taxes in the background to confirm your return is correct, so this is not significantly more work for them (in fact, it is probably less work).
In some countries with such a system, unless you intentionally lie, you are absolved of legal liability if the government screws up your taxes.
The article makes it sound like they are building a crappy turbo tax clone instead.
RC_ITR|2 years ago
This is a common misconception. Most places that send you forms also send them to the IRS (but by no means all places). The IRS makes sure that the information you put in your forms is the same as the forms they got, but they know nothing about your dependents, whether you pay mortgages interest, etc.
Now, the counterpoint to that argument is that c.90% of people just take the standard deduction anyway now that there's not SALT, but the argument there is that we should move completely away from deduction-driven taxes (which is probably the solution).
As for TurboTax et al, those places are not sending your forms to every state tax agency (why do people always forget about state taxes in these threads?), so there's still very much a need for some solution there. Probably IRS data sharing, but good luck getting all the states to agree with the Feds on tax forms (just look at the SALT battle).
foota|2 years ago
throw10920|2 years ago
slater|2 years ago
rqtwteye|2 years ago
wutwutwat|2 years ago
6510|2 years ago
You fill your shopping cart with a bunch of groceries then you have to write down what you think it all costs. The shop keeper then checks if you got it right. Then they call the police for each 12.3th customer who got it wrong. The odds to get it wrong are so big the help of a different company is needed who will add up the shopping cart for you.
You cant make it up.
pard68|2 years ago
I used the FileFreeUSA and TurboTax Federal Free in the past and it worked well. I just use TT's paid offering now for the F-income declarations.
whatever1|2 years ago
bluGill|2 years ago
nemo44x|2 years ago
I agree it's probably a bit much for most people though and not filing should be akin to not reporting anything else and the IRS should automatically calculate your return and mail a check or a bill if you owe.
sys_64738|2 years ago
camdenlock|2 years ago
Zigurd|2 years ago
nemo44x|2 years ago
mrbonner|2 years ago
unknown|2 years ago
[deleted]
joshribakoff|2 years ago
hcrisp|2 years ago
Federal taxes only. Except for entering in your W-2s by hand, it's pretty straightforward. You can save a PDF copy to your local drive. The nice thing is you save postage and do not have to pay someone to prepare / file it for you.
sidewndr46|2 years ago
jrib|2 years ago
yieldcrv|2 years ago
“Free vs Turbotax”
and everyone with a CPA just has to pretend they dont do that
swarnie|2 years ago
God knows why it took this long.....
jxi|2 years ago
iNeal|2 years ago
1270018080|2 years ago
Devos12|2 years ago
unknown|2 years ago
[deleted]
zzzeek|2 years ago
If Trump wins again he's going to have a lot of work destroying all the progress Biden has made in just one term.
SV_BubbleTime|2 years ago
codetrotter|2 years ago
kouru225|2 years ago
unknown|2 years ago
[deleted]
ap77|2 years ago
dang|2 years ago
Tax prep companies: $90M lobbying against free tax-filing - https://news.ycombinator.com/item?id=37363616 - Sept 2023 (231 comments)
IRS moves forward with a new free-file tax return system - https://news.ycombinator.com/item?id=36804710 - July 2023 (221 comments)
IRS tests free e-filing system that could compete with tax prep giants - https://news.ycombinator.com/item?id=35950836 - May 2023 (567 comments)
Call on the IRS to provide libre tax-filing software - https://news.ycombinator.com/item?id=35705469 - April 2023 (129 comments)
60M Americans have taxes so simple the IRS could do them automatically - https://news.ycombinator.com/item?id=35476709 - April 2023 (277 comments)
Lobbyists begin chipping away at Biden’s $80B IRS overhaul - https://news.ycombinator.com/item?id=35381701 - March 2023 (214 comments)
Intuit pouring money into lobbying amid push for free government-run tax filing - https://news.ycombinator.com/item?id=34840039 - Feb 2023 (178 comments)
IRS builds task force to explore running its own free e-file system - https://news.ycombinator.com/item?id=34764952 - Feb 2023 (199 comments)
IRS Free File: Do Your Taxes for Free - https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247 comments)
IRS will look into setting up a free e-filing system - https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408 comments)
The IRS could be on the verge of changing the way Americans file their taxes - https://news.ycombinator.com/item?id=32550841 - Aug 2022 (17 comments)
IRS will study free tax filing options - https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25 comments)
TurboTax’s fight against free tax filing - https://news.ycombinator.com/item?id=31072202 - April 2022 (394 comments)
Filing taxes could be free & simple. H&R Block & Intuit lobby against it (2017) - https://news.ycombinator.com/item?id=30856968 - March 2022 (114 comments)
FTC sues Intuit for its deceptive TurboTax “free” filing campaign - https://news.ycombinator.com/item?id=30846071 - March 2022 (587 comments)
Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments)
Why do Americans have to pay much to file their tax returns when the IRS knows? - https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22 comments)
Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments)
California tried to save the nation from tax filing, then Intuit stepped in - https://news.ycombinator.com/item?id=28944200 - Oct 2021 (283 comments)
The IRS has a big opportunity to fix the way Americans file taxes - https://news.ycombinator.com/item?id=28177289 - Aug 2021 (12 comments)
--
GOTO https://news.ycombinator.com/item?id=35970518
jncfhnb|2 years ago
m463|2 years ago
(for example, this irs page links to googletagmanager)
jrockway|2 years ago
https://epic.org/report-id-me-lied-to-the-irs-about-wait-tim...
I don't think there is any stipulation that the US government can't use products sold by US based companies. In fact, they enjoy doing it. You should ask your elected representatives to prohibit tracking on government websites; if they pass a law, the IRS's web design team will follow it.
unknown|2 years ago
[deleted]
unknown|2 years ago
[deleted]
stainablesteel|2 years ago
zelon88|2 years ago
OkayPhysicist|2 years ago
You have form 1040, which gives you a run-down of every possible form you need to reference. You fill out the boxes with the info it wants, then you go down the list, filling in each number box that applies to you: Got W-2s? Probably, attach 'em and sum them up. See a phrase you don't recognize? Read the relevant instructions. Got interest? Time to fill out a Schedule B, which itself references some other forms, and attach some 1099s. Sell any investiments? Schedule D, which might have you fill out an 8949 (strictly speaking, you can skip this one if all your investments have declared basis on your 1099-Bs that you received from your brokerage). If you think you might have more deductions than the standard, there's Schedule A, but for most people you can safely skip that one and take the standard. Taxable income determined!
Then the taxes section contains a bunch of forms that apply to you if you're in certain situations, maybe you have a kid (Schedule 8812), the instructions are very helpful in telling you what you need to care about here. The first box is important, it includes your income tax which the instructions will tell you how to calculate.
Sum up your witholdings from the W-2s and 1099s to figure out how much you've already paid the government, then figure out if you owe the fed money or they owe you.
Sign, stick in an envelope, and send. Whole process takes a couple hours the first time, when you need to learn what you actually need to fill out, and in future years less than 2 hours.
If you can read at a 6th grade level and do basic addition and subtraction you can fill out your tax forms.
greymalik|2 years ago
dang|2 years ago
unknown|2 years ago
[deleted]
unknown|2 years ago
[deleted]
thekrowndnf|2 years ago
[deleted]
vichle|2 years ago
dang|2 years ago
https://news.ycombinator.com/newsguidelines.html