The upsells on TurboTax are getting a lot more shameless in recent years. I saw the exact same one pop up at least 2-3 times.
The one that really aggravated me though was the one at the end: after you FILE your taxes, they present this damned progress-bar looking thing as if you are somehow “not done” yet, as if this totally optional product sale is a required step!! No, no, no, that is just misleading garbage, and it is so annoying to have to constantly hunt around the page for the magic text to get around these things. I mean, I couldn’t even reach the page that lets me download my forms as PDF until I skipped this upsell.
What’s more, the product itself is getting more expensive but worse. On desktop, the whole thing is just a blown-up mobile UI (are that many people doing taxes on their phones!?) with all kinds of things unnecessarily hidden. On page after page, there is more than enough space to show everything but instead it’s giant white space everywhere; they HIDE things behind disclosure arrows, and with no logic whatsoever; e.g. on one page it shows the 2020 numbers by default but hides all the 2021 numbers behind arrows!?
Guess what isn’t an insultingly-small, truncated experience on desktop? The ads, the upsells. THOSE are full-page, taking full advantage of screen space and even scrolling off the edges.
I agree that all those are bad, but the main problem I have with it is that it should be a state-provided (or federal government-provided, I don't care) service. If a country wants taxes the minimum it should do is tell its citizens how much each of them owns. Relying on a private company to provide that "for free" (as long as you jump through the hoops) is ... shameful.
In general, ANYTHING mandated by the government should be available primarily in minimally sufficient form from the government. That goes for insurance, fees, services, etc.
And honestly it should just be TurboTax but paid for by the government like every other public-private partnership in other industries. Boom now the incentives are aligned.
Coming from a country where the government offers a decent and free tax software, I really hate being hostage to TurboTax and their dark patterns.
But honestly, the situation could be a lot worse if it were provided by the government, given the current tax code. To start with, we'd likely have the federal government + every state having different opinions on how to implement their version of the tax code, and spending hundreds of millions of taxpayer dollars with consultants and developers (vide health.gov [1]) to implement their own flavors.
On the taxpayer side, you'd have to deal with at least two systems when doing your taxes, but potentially more if you lived in multiple states. In the best case scenario, some data would be portable between them (but likely not all, given the complexity and number of edge cases). In the worst, you'd have to enter the data manually in multiple systems, making it a nightmare to keep systems in sync. In this alternate universe, TurboTax doesn't look that bad anymore.
The only way to solve this cleanly would be through a full reform of the tax code, including a drastic standardization and simplification across federal + states. But it's unlikely to happen anytime soon, and, not surprisingly, Intuit will be always lobbying heavily against it.
Now, if government were to embrace a public-private partnership like you suggested, we can make meaningful progress faster. Create a white-label version that is offered for free to 140M taxpayers, align incentives on simplifying the tax code, and get the 3P ecosystem to develop advanced versions for more sophisticated users, businesses, etc to create extra incentives to continue improving the sw.
Mortgages, student loans, ACH and wire transfers… all substantially government provided and funded services for which the taxpayer frontend is private companies.
They shouldn't have to fill out the forms at all. For the average person it should be a literal "yes, that looks correct" online check box. That's exactly what TurboTax doesn't want.
Yes, and it's awful. I have ADHD and even with turbotax handholding me and importing last years' data and grabbing some fields automatically, it's still quite stressful.
I know several folks that have their partner do it cause they just hate it.
I think you meant to say "owes", but yes I agree with this idea fully. When I pay sales tax, it isn't like I have to perform some long-form calculation to figure out what I owe. I get a bill and I pay it. When I pay property tax, same thing. I get a bill and I pay it. I register a vehicle as an on-road vehicle, I get the tax amount and I pay it.
Only the Federal government could come up with a scheme where you have to prove you made X, then prove you owe Y and pay that.
> FedGov doesn't know the basis of your stock (or crypto) transactions
Aren't brokerages required to file forms for every customer they serve? Let the regulated businesses deal with bureaucracy and accounting, they are expected to hire people for that job anyway.
> Aren't brokerages required to file forms for every customer they serve?
They are, but there are corner cases where they might not have all the necessary information. For example, if you trade the same stocks or mutual funds through more than one broker then neither one will have enough information to determine the cost basis for each sale. It's also possible to move shares directly from one broker to another.
For crypto, in the US, none of the exchanges are currently required to track any of this to begin with (they aren't considered brokers) so it's up to the customer to keep track of the cost basis. Even if they did act as brokers the other issues still apply, plus the cost basis of your positions will be affected if you trade on your own without involving an exchange. For example, spending crypto on goods or services from an unhosted wallet can affect the cost basis of subsequent sell orders. The tax filings are probably simpler under the current system, since if exchanges were filing 1099-Bs you would need to submit adjustments to their cost basis reporting along with everything else.
If you have stock to bring in, you bought it somewhere, right? That "somewhere" should have filed forms reporting on your purchase, kept records and stuff.
With bitcoin, a part of !!fun!! from holding non-security assets is all the accounting you have to do. Enjoy it, that's a part of a bargain. That said, other countries like Japan mandate regulated exchanged to keep track of their customers assets, assist with cost-basis computations, etc.
My point being, regulated institutions can make filing taxes easy for most of the people, with unsophisticated circumstances. Usually being an employee of a single business is considered "unsophisticated" enough to not deal with any forms, letting your employer do these things for you. There is no reason why other common life situations cannot be made as easy, like having deductions for mortgage, purchasing securities via regulated brokerages, etc.
If your situation is "sophisticated", then surely you gotta enjoy accounting and reporting then. But that should be necessary only for a fringe percentage of people.
No, I'm not assuming that a brokerage will have information about every transaction, I'm assuming that brokerages will have information about many transactions. It would be worthwhile to simplify tax filing in those cases even if there are other cases that do not get simplified.
The federal government knows exactly how much I made. There is no financial information beyond the view of the federal government. The only way I could hide income would be to get paid in cash (or cash equivalent, like gold) then hide that money in a safety deposit box. That doesn't exactly scale very long. It's notoriously difficult to buy a car (or bread) with gold bricks. Also, if someone does do this they aren't going to just tell the government "yeah I have $700,000 in gold sitting in my safety deposit box".
Even if the government had absolutely no records of my income (which is false), there should be an option for me to just submit all my income records to them tabulated. I can attach a bank account number and routing number and have them deduct whatever money I owe in taxes from the account. End of story. Unless the IRS is claiming you owe a massive amount of money relative to your income, it is never worth contesting it. You're going to spend more money & time than you will ever recover.
So that's how it works here in New Zealand - most people can go on line and fill out a 2-page web form, the IRD already has our equivalents to W2s, 1099s etc, you can look them over, make sure you think they're correct and effectively press a button - taxes done! And if you don't? then the IRD will do it for you anyway and send you a refund (with interest) or a bill.
Of course it's much easier for us because we have a much simpler tax system - virtually no exemptions - chances are if you have one job all year your employer got your tax right to the dollar.
I have to file in both countries, American taxes is like pulling teeth (the paper work side, I don't mind the actual paying of taxes, it's a civic duty after all)
I was on PAYE all my life in NZ, now I'm PAYE in the UK. So easy. Even a brief spurt of contracting here taxes were super easy (altho an accountant is still useful).
Civic duty? If I were you I'd renounce my American citizenship. I don't see why you should support a warmongering country with your money, especially if you're not living within its borders.
Even if I were living in the US, getting money from someone under the threat of fines and incarceration is called extortion.
There's a large group of political organizations apart from just tax filing services and companies that believe that it is intrinsically bad for the government to just tell citizens how much they owe. They are very loud and influential.
If they actually wanted the taxes they’d be sending bill collectors. They don’t most of the time because it’s highly probable you already did pay, more than you owe, and they owe you. Their incentive to collect is to let private companies generate more revenue with their services, which in turn generates more taxes automatically collected.
> the whole thing is just a blown-up mobile UI (are that many people doing taxes on their phones!?)
Yes. According to Pew, in 2021 there were 15% of adults in the US who said they only have smartphone data for Internet access and do not have what we know as home broadband. By age, that number skews towards younger adults, with the largest share being people aged 18-29, however even older adults hover in the low teens of percent.
Even if someone does have broadband at home, the number of "traditional" desktop and laptop computers have been dropping. Mobile phone and tablet devices (but, let's be honest, mostly mobile phones) have been replacing regular computers at a pretty high clip. And where a household does have a desktop or laptop, they may only have one, where almost everyone has a mobile phone device so it's probably convenient to just pull up the tax prep web site and get to it on the handheld.
Be careful with "there were 15% of adults in the US who said they only have smartphone data for Internet access" - it means that's how they get the internet, not where they use it. Due to broadband availability / quality there's going to be a non-trivial number of people relying on tethering either through phone or dedicated dongle.
At this point, I know a non-negligible number of middle- and working-class adults who don't have a general-purpose computer in their household, purely because they don't need one. I've never thought to ask how they were doing their taxes; presumably they are outsourcing it, going to a library, or doing it on their phones.
People seem to like to do things on suboptimal devices. I've never quite understood it. Just the thought of wasting time not being able to use a mouse and keyboard makes 99% of tasks unbearable. But it's almost like you don't know what you don't know.
My 6 year old was playing Minecraft on a tablet / console for a long time before moving to the computer. He's said several times about how much better he is at it on desktop. I've never even mentioned to him that one's technically better than the other.
I don't know if mobile tax apps do this, but if they did I can totally imagine mobile being far easier for most people: Use your phone's camera to take a picture of your W-2, use OCR to extract the data & confirm with the user, ask the user a few questions for things not on the W-2, autofill the 1040.
You hit the nail on the head. Actually, we used TurboTax, got annoyed with the constant upsells, and the $80 fee (it was advertised as free), and then my husband redid our taxes using another website (freetaxusa). It was actually free.
Huge upvote for freetaxusa. My wife was worried that it wouldn't be as good so we did our taxes one year on both services simultaneously. TurboTax's interface was so bad it took almost twice as long to complete the same work and the refund was the same.
Why would I pay for a worse interface? We don't have trivial taxes either, we have our own business and investment income. TurboTax was way worse about not letting us skip over stuff we don't have. It creates single question pages one after another instead of just sticking them in a list so you can skim through them all at once and select only the relevant ones.
In my case, Turbotax did a better job helping me figure out my taxes this year.
I tried freetaxusa but there were a few things that turbotax provided clearer guidance on. There was one particular issue where I was quite stumped with Freetaxusa, but Turbotax explained it.
I believe Turbotax also found one or two things that freetaxusa didn't point me towards. But it was all kind of a haze at this point so I might be misremembering.
I don't want TurboTax to be better, but for me it was better this year. I really hate their lobbying. I'll give try more options next year.
I would love to use one of the free products. Unfortunately, for me, TurboTax is the only one I've tried that will import all of my brokerages... Seems small price to pay.
And they always get me with the "Audit defense"... I am not sure how useful it will be if I ever get audited (I err on the side of caution when doing taxes), but still some small extra amount of money for extra peace of mind...
Since I'm not a tax professional at this time, I can tell you that your odds of being audited are somewhat random and usually very low unless your filing is off by a certain percentage in some fields/parameters. Lower income folks are more likely to be audited. The audit "defense" just means you'll get x hours of professional time if you were audited to represent you during an audit. On the whole, the odds of being audited are usually so small it's usually just free money for Intuit.
> TurboTax is the only one I've tried that will import all of my brokerages
That's trivial; don't throw your ranch so easily. You only have to copy few fields from your 1099 form and the instructions are very clear - which fields to copy and paste where.
Agree, finished taxes with Freetaxusa and figured out backdoor roth conversion, included freelancing income, dealt with a schedule k-1. So much less obnoxious than TurboTax, which I have also used but which makes me angry for all the reasons discussed in this thread. Yes, Freetaxusa charges for the state return, but it's also the case that I can't file electronically for free in my state at all (?????). Spouse wants to do paper on principle, which I acquiesced to last year, but.... our paper federal return from last year has literally still not been processed (check was cashed 4/8/2021).
I've been using freetaxusa for years due to outright refusal to give Intuit a dime and it's been great.
I'm somewhat new to the Roth thing and this year it flagged an excess contribution issue, which feels like it would have turned in to a prolonged and painful ordeal if I hadn't gotten the heads up to correct it before filing.
I just wish it let me put my return in to I-Bonds.
> it's also the case that I can't file electronically for free in my state at all (?????).
Up through the 2020 tax year, it was possible to e-file state taxes for free using state fillable forms (like you can use free fillable forms for federal taxes). But intuit decided to no longer provide that service this year.
i just did my taxes last night and checked freetaxusa seems like they charge for state though? I ended up using credit karma's app which was still annoying after intuit bought them and they were forced to sell the tax software to square, and it required I download the mobile app first. It was much better in the past
Yeah, they charge for state, but much less than Turbotax charges for state.
Of course this is a bit of a sore point for me since my state used to have free online tax filing but H&R Block got their rep voted in and killed the program "to save taxpayer money", it cost the state about $40k per year to run and now instead we have one of the highest e-filing costs in the country.
I switched to freetaxusa this year (from TurboTax), and after such a wonderful experience working through my somewhat complicated taxes I was happy to pay them $15 to save me the trouble of typing the information into my state's free-but-lowball-government-contractor website.
They do charge for state taxes. It’s like 15 bucks per return with not that much up sell. I’ve used them when I had simpler taxes and liked them over other common preparers
I help friends and family and I can't recommend freetaxusa for simple returns enough. It's so much cheaper if you're doing your own taxes. Tax slayer is decent as well.
I previously used CreditKarma for prior years taxes. This year I didn't strictly because the whole thing feels like a push to just get you to install CashApp on your phone. And that is on top of not wanting to use anything Intuit owned anymore. I'll gladly pay $10 to file my state taxes if I can avoid them giving it to Intuit.
I've used that service for a decade and never paid them a penny, I think there are a few services they bill for but I don't need. The UI gets only minor changes and it still basically works as it did ten years ago, so I appreciate the consistency as well especially for something I touch once a year.
One bright spot in all this pay-to-file-taxes game is the "Cash App Taxes" [0]. It is just great and seamless to file taxes for free even for a bit complex taxes such as RSU, Stocks, Virtual currency sales etc. Usually what I do is just progress on TurboTax until the end so I could calculate my estimated refund and then go ahead and file using Cash App Taxes and it just saved me $150 this year.
I've been using Credit Karma the last few years for taxes until they sold to Intuit, at which point their tax division went to cash.app. Initially I tried going with them until I realized that I had to download their app on my phone to even sign into the desktop to do my taxes (it was requesting I scan a QR code or something). I couldn't even access my previous tax returns that were stored on Credit Karma without downloading the cashapp to my phone. Eventually I caved, but only to contact their support to retrieve my returns and formally cancel my account.
I shouldn't need to download an app to a smartphone for something that I exclusively intend to use on a desktop. I went with FreeTaxUSA in the end.
> I shouldn't need to download an app to a smartphone for something that I exclusively intend to use on a desktop.
I see where you're coming from here and mostly agree. However, I will say that as someone who already had the Cash App installed the process was pretty seamless. The only major item I would change is that it would be nice to have some way to import a CSV or XLS file (or even JSON) for the capital gains forms. They offer an online spreadsheet but you still have to fill out each cell individually. If you have a few dozen trades (or more) to report it gets rather tiresome and could even be a bit error-prone.
I suppose I could have scripted the data entry with keyboard macros (via xdotool[0]), but for something I only do once per year it probably wouldn't be worthwhile… and the interface could be different next year.
Same path here. 2 years using Credit Karma, then jumped through hoops only to see that Cashapp couldn't locate my prior returns, so I just used Freetaxusa.
I'm on H&R Block, which I used to be pretty happy with, but it's also getting a lot worse. Much slower, pointless UI changes always in a bloaty direction, navigation is less functional, more upsell garbage, more expensive, etc.
I've kept coming back until now out of habit and because they've got a lot of data on me they can prefill, but maybe I should look at FreeTaxUSA now.
This year was a nightmare for me. The UI wouldn't save state, going through the same steps would lead me to different results ("Your state was e-filed!","Your state isn't accepting e-file."), and there was an alleged error but it would never tell or show me what the error was. Customer service was just as confused as I was and the "Get virtual assistance" button eventually disappeared for me. I ended up giving up and going to a local CPA to get it done for me. I don't think I'll be using HR Block next year after being a customer for over 5 years.
Yes, the "pick up where you left off" was a lot more fragile than in years past. And they sent me tons of emails begging me to finish filing after I already filed everything.
> On desktop, the whole thing is just a blown-up mobile UI
Meanwhile, the traditional desktop software version of TurboTax remains quite good, and I have been using it year after year on Windows. They have several editions; here is the one I used this year:
I wouldn't call it "quite good." It's also pretty crappy. There are arbitrary sleeps thrown in between pages to make it seem like the software is doing something; additional upsells, like GP is complaining about; they block paste when filling in bank credentials, which is super obnoxious; and the UI flow drops you back at "guided or self-service" every time you leave a section.
Personal experience: every year TurboTax gets at least one thing wrong per filing, and it's always a different thing. Always love getting stopped at the "error check" with a question about how some field that's supposed to be a zero is blank, or some field that's supposed to be blank is a zero, because the guided questions and the tax forms aren't communicating properly.
State taxes are full of really confusingly-worded questions and things I've never heard of, with little explanation as to what means what. At least the federal section has proper explanations of things.
The state ones are hilarious, because they offer no guidance: •Wangled Garbfinkle Reduction of the Belaurtiun Disaster Zone• will say “if this applies to you enter the amount from form L3O-P4RD”
Things like this are why I could never write consumer-facing software like this. To me, I think software is working well when it's fast and responsive. But clearly their market research shows that you need a lot of sleep statements between screens so it feels like it's "doing" your taxes. I can't wrap my head around this thought process. Just moving the Turbotax window around is many orders of magnitude more computations per frame than an entire tax return :)
They would lose sales if it were. People are sensitive when it comes to their taxes. And I imagine a good number of accountants use Turbotax in the back. There could be legal issues with them uploading clients’ tax information to a third party’s servers.
Competent and legitimate tax professionals use those products (and also UltraTax, from Thomson-Reuters, is quite popular).
However, fraudsters will use DIY software like TurboTax but then charge for it, evading all the provisions of tax law that pertain to paid preparers. This is not as severe a problem as it was say five years ago, since IRS has instituted a number of security features to weed out the fraudsters who efile.
Violations of various regulations aside, who exactly is getting defrauded in this scenario? Are you implying that the paid preparers in question predominantly commit or help their clients commit various forms of tax fraud?
Yes. And as you mention, sometimes it is just the preparer committing fraud (e.g. falsely claiming refundable credits) without the client's explicit cooperation, although clients also spread the word about what a "great job" their preparer did for them. Since the preparer avoids associating themself with all the returns they prepare, it is much harder for the IRS to detect their pattern of fraud.
The IRS and industry vendors (including Intuit) have, under the label "Security Summit", implemented things such as collecting metadata (tracking the network address from where returns are filed, how long the return was open in the software, etc), stronger password requirements with MFA required to submit returns electronically, limiting the number of refunds paid to the same address or financial account, and optionally collecting driver's license info to confirm identity.[0] It seems to have been relatively successful, as the frequent complaints of ID theft (returns filed under someone else's name) have declined significantly as a result.
No, and some of them do. The "hurdle" is the target audience. These professional products usually begin at over $1K license cost per year and go well into five figures for larger tax practices. The pro products are designed to track the status of hundreds of returns, communicate and exchange documents efficiently with all those clients, allow multiple staff members to work on the returns, prepare various entity returns beyond 1040 such as S-corp, partnership, trust/estate, and all U.S. states that have tax, automatically share data between returns of related persons (shareholder/S-corp, partner/partnership, kids with high investement income/parents of those kids). The pro software usually supports a much larger number of less common forms than the consumer products and has better diagnostic support for unusual situations.
It's kind of like the difference between having an Oracle database server vs. having MS-Access on the desktop.
Not everyone has bought into surveillance culture? I have an overwhelming preference for local software that I can prevent from backhauling my personal information into the permanent records of data silos. This goes doubly for non-mandatory services that tend to have shameless contracts of adhesion falsely purporting consent for such abuse.
FWIW TurboTax is eminently easy to pirate and crack to get state filing functionality. Network isolate the VM after you get the updates and state forms but before you start inputting data, and you can rest easy that no personal data is being exfiltrated. There's no need to support these regulatory capture parasites.
If you kill network access, sure. I don't think the software itself makes any guarantees about data privacy. For me, as a linux user, it's more effort to get windows vms for these things, but I do them because the desktop ones are often cheaper.
Sure. Like many things, local software is necessary to preserve privacy but not sufficient. Local proprietary software can brazenly work against the interests of the user, libre software can contain backdoors or other antifeatures, a peer-reviewed libre system can be cracked. But by heading in this direction, you retain the possibility of keeping your personal information as private as possible.
FWIW I'm a Linux user that runs most everything in VMs. Each year I create a new one for TurboTax, get the updates/stateforms, then disconnect and never reconnect it to the Internet. It's a little work, but can be done mindlessly while doing something else.
I take it that you send the forms by mail then ? Because efile would need network access, and that is half the reason I'm using the tax software in the first place.
Yep. The time of going to the post office is dwarfed by the headache of actually doing the taxes and checking that they seem correct. Disposing of them into the mail is downright cathartic.
I am glad there are still desktop versions where I can keep the software indefinitely and keep my data offline. I’ll go back to pen and a desktop calculator before I use a web app.
I recently had to go back and file an amended return for one state and file a return for an additional state for the past 5 years. It made my life a lot easier to be able to just install the past 5 years versions of TurboTax Desktop which I had saved the installers for. I was able to run through this whole process using the tax rules that were in place at the time.
Not sure if this would have worked on a web version or not, but I was pretty happy to have this option available to me.
I don't think the desktop version makes any guarantees about data privacy, analytics, or anything of that sort. It routinely connects to the mothership from what I can tell.
Some of the interactions are even too granular to make sense on mobile. I can't remember the specifics but there are some sequences that go like:
Do you need to adjust the value here? (Yes) (No)
... new page slowly loads ...
Do you need help calculating this value? (Yes) (No) (I don't want to change this value)
... new page slowly loads ...
What should the value be? (I'll enter it manually) (Help me calculate it) (I don't want to change it)
Like other than some basic wording changes, the third page already supports what the first two pages did. And depending how many stock trades are in your form you might have to repeat this loop a hundred times. It's really enraging.
I've been wondering lately why hasn't someone just built an open source version of it. It would be less buggy and more up-to-date than anything a corporation could build. It would also create the incentive to eventually get rid of the industry all together
It has been tried, but I haven’t seen any projects that were able to keep up.It takes a lot of manpower to update all of the various forms for every tax season. Congress can and has done things like pass a 1700+ page bill changing the tax code on Dec 20th of the same tax year, and some users will want to start filing their returns within a month. And there are 50 states that can do the same thing.
Also it requires expertise outside of programming for which there is not much enthusiasm for open source.
Becoming a CPA sucks. You need 150 credit hours, pass 4 exams with 50% pass rate, and usually needs 1 year of qualified experience to qualify. Programming is so much easier to get into.
The tax code is particularly complicated – and then there are multiple states to worry about. It would be difficult for a single person to do this. Not impossible, maybe there are some CPAs which are also software engineers. Once the project becomes big enough, maybe more people would help.
The problem is then: are they shielded from liability? If there's a mistake and people sue, they won't have Intuit's lawyer army.
But let's say we have the perfect program. Would people be OK with printing out and mailing their returns? Because you have to be an authorized provider to e-file.
I would say that this IS impossible for any single individual. The amount of edge cases that software like this needs to capture is enormous and there isn't a single human in the world that could account for all of them. Not to mention the changes in the tax code every year.
they dont have your deduction information though, also for investments they dont always have cost basis info. other than that for simple returns they can absolutely do an automated federal 'tax receipt' with standard deductions.
> they dont have your deduction information though
Except for medical bills, mortgage deduction, education expenses, retirement/HSA/etc. accounts and SALT (if that gets reinstated) and maybe a couple of others, probably. Although, frankly, I'm not sure what deductions other than charitable contributions don't get reported to the IRS and I'm similarly not sure what deductible expenses don't already have a paper trail I would care about retaining. But that's where "correcting the math" would include replacing the standard deductions with itemization would come in.
I think requiring a basis for investment income to be made in the acquired year to the IRS is both reasonable and trivial.
There are already affordable alternatives. The people still using turbotax are the same people that spend 0 time looking into alternatives or there is some import feature that an opensource platform realistically would not have the manpower to replicate. Freetaxusa is $15 at a minimum (state fee) and $50ish at the max if you opt into everything. UI isn't loaded with fake loading screens, and they only try to upsell maybe 2 or 3 times during the whole process. My parents complain about turbotax every year and every year I tell them about alternatives... But they still won't switch because 'its what they know'.
FreeTaxUSA made me manually input my stock transactions last year, via a paper PDF I had to print and mail separately. For most situations it is probably fine but its investments support seemed limited.
Why would an open source solution improve on that though? If anything, that would be way lower on their priority list as anyone doing large numbers of investments would (should?) have money to pay for a nicer UX solution and probably would want to, as the risk of an audit is a bigger 'cost' than $50-80 in filing fees.
The sheer number of changes that the Tax code makes every year would be hard enough to keep up with for an open source project, let alone making integrations with all of the brokerages to make this process less painful.
Every time I opened it this year it begged me to register. So they could capture my personal information to market to next year, or try to get me to “subscribe.” It seemed to also prompt again at exit.
Really irritated me that I couldn’t opt out permanently but had to click skip every single time.
And I’m tired of the progress bars pretending to be calculating in order to make me feel like I’m getting my money’s worth.
And yet I buy it begrudgingly every year because it is what I know, and it imports data fairly well from my online accounts.
Do the alternative brands import w2’s and previous year’s turbo tax files? Does it integrate with online brokers for pulling 1099’s?
Their competitor TaxAct is being more brash as well. I've been filing the same forms for the last 5 years and the filing cost with them has risen gradually from $60 in 2017 to $130 this year.
Not the OP, however, I haven't found a product that's easy to drop options trading data into. I'd love to switch off of TurboTax, but I'm not putting hundreds of trades into a system manually - their import function makes it a breeze.
Except for the 2nd year in a row, TurboTax fails to understand how to handle short put positions (of which I have many, many trades). It doesn't understand how the cost basis could be 0.
I'll have to short-circuit it _again_, and this will be the last year I use TurboTax: if I'm going to have to manually work around these things, I may as well not pay for the privilege. Prior years made it trivial to import the data from the 10 different financial firms that provide 1099s.
At the end of the day the IRS cares about your net loss or gain, and what's short term vs long term gains.
So I typically sum up my various investments into those 2 buckets, by broker. if i ever get audited, i have the individual trades i can share if needed.
It's right in the instructions for a 1040 that you must complete form 8949 if you have any capital gains or losses, and form 8949 says to list out each sale.
This is not true for most folks, who can use one of two exceptions that allow summarizing. Exception 1 allows you to simply report totals on Schedule D. Exception 2 has you file Form 8949 with summarized rows, as long as you attach a statement with the detailed transaction info (the brokerage 1099-B generally suffices).
Exception 1, I grant, and TIL. I sort of presume I can take that (in my situation), although this directive is confusing:
> The Ordinary box in box 2 isn’t checked
There is no "box 2" on the 1099-Bs I have. It is on the standardized IRS one, so the instruction from the IRS seems fine … but this is a great commentary on the state of the American tax system and how complicated it is.
(Variations on this theme cropped up multiple times during this year's prep, too…)
Exception 2 doesn't seem to list out what the conditions to qualify for it are, it only lists the procedure for the exception. I'm not sure how anyone is supposed to take it, for that reason.
> These are the very same exceptions that tax software uses.
TurboTax does not appear to take advantage of Exception 1. It would appear to have applied to my situation this year, and yet, TurboTax filled out a complete Form 8949, with each transaction, just like the parent comments hint at.
If a particular box is not there, you can generally assume it was blank. Brokerages tend to produced a condensed 1099-B to save space: it would be very cumbersome parsing hundreds of pages of a full-IRS-layout 1099-B.
In practice, the condition for Exception 2 is "the 1099-B is already correct and you don't need to make further adjustments". Because if it isn't, you might as well fill out Form 8949.
It's definitely possible to have tax software summarize, although I suppose they might not do it by default.
> If a particular box is not there, you can generally assume it was blank.
The tax code is just sufficiently complex enough that I don't feel safe making that assumption. You're probably right, but "probably" is too low a bar here.
> Brokerages tend to produced a condensed 1099-B to save space: it would be very cumbersome parsing hundreds of pages of a full-IRS-layout 1099-B.
… but like, isn't that the problem? If nobody uses the standardized form because it's too cumbersome … simplify the tax code.
Or standardize the data format and stop using PDF & human toil as a data transfer layer/format.
> It's definitely possible to have tax software summarize
Certainly it is possible. I was responding to the comment that it happens in practice, at least for the largest such software.
The problem is, the one tax code is made for the whole country to use. If there is one person who needs the full form to correctly report his tax situation, the tax code has to be that complicated. And the 99.99999% simple cases have to suffer. You have better idea?
What do day traders and quants do? If you regularly trade hundreds of thousands of times per day do you end up submitting a semi-trailer worth of paper to the IRS every year?
I'd recommend freetaxusa for everyone, I've been using that for years now. E-filing federal taxes is free, and state income tax E-filing are only something like $15 total. The interface is generally the same as TurboTax and is nice and easy.
> are that many people doing taxes on their phones!?
More people than you would think. I have several coworkers with kids that don't have a single computer in their house other than their phones. If the kids need to use a computer they take home their work laptop.
In fairness, that third paragraph is pretty typical (horrifying) web UX these days, not something unique to Intuit or tax software. Let me open subsections in a new tab, FFS!
so just stop using turbotax, h&r block, taxact, etc. try https://www.freetaxusa.com/ or any other decent competitor not trying to monopolize or regulatorially capture the market. for simple returns, just doing it by hand and mailing it in is easy enough too. vote with your feet.
I used to be able to do a return "by hand" (fine, using a spreadsheet). But now between the health insurance stuff and the child tax credit there is a whole raft of additional forms that did not even exist just a few years back.
If you don't anticipate your tax situation will change for a few years, you can get a professional tax preparer to do it one year and then copy the process yourself subsequent years.
I've done my taxes on Turbotax for a few years, and didn't even check alternate options because I had the perception they were clunky.
I've tried for the first time FreeTaxUSA to prepare my mother's tax return. Guess what? It's even better than Turbotax in some aspects(the UI is similar, but doesn't waste your time with animations), and way cheaper. It only charges you to file state but, if you come from the Free File IRS website (and are under the income requirements), it doesn't even charge you that. There's one upsell for their tax consultants or whatever, but it's only done once.
It does not automatically import W2s though, but that saves you maybe 5 minutes per W2. Not sure about stock transactions import either, it seems they can't import from brokers. I will have to check next year. They do seem to have spreadsheet import, so maybe that's something we (as in, HN community) could fix until they have the feature.
The competition seems to have improved as well, although I don't have first hand knowledge (but watched some youtube reviews where they walk through the filing with every software).
It's time we ditch Intuit. If we can't have free IRS software, then we should at least bleed Intuit dry.
EDIT: it's particularly egregious that Intuit came up with the Free File program as a compromise so that IRS wouldn't have their own tax software, only to leave the program.
I also used FreeTaxUSA. It doesn't import stock, but it's easy enough to just input the stock summaries yourself, and then mail the full stock tax forms from your stock brokers to the IRS afterwards.
I enjoyed freetaxusa as well. Only thing that was a little weird was that I ended up entering some forms out of order and because of that it was saying my backdoor roth ira rollover was taxable income, but when I went back through and re-entered the data it asked me the right questions and gave the right output.
I really love the comparison with previous year(s) on some pages and that helped me spot a real error. The navigation is so much better than turbo tax too.
If anyone is looking to convert from turbo tax, you can import your previous return as pdf and that could cover a lot of details already that don't change year over year.
Note that if you do this and then change your mind, you can't delete your FreeTaxUSA account. You have to manually delete everything you've uploaded and replace your personal information with nonsense:
Hey, so, TurboTax has a 0% chance of correctly importing my W2s & stock transactions; so, it's not like I even get that. This was my last year of using TTax — if I'd known about FreeTaxUSA, I would've hopped.
Is this something about how they don't handle wash sales across brokers for you, or do they actually screw up importing that one form from your stock broker somehow? If so, how do they screw it up? Would be nice for everyone to know so they can watch out.
In Spain I log onto the tax agency website using my digital certificate. It tells me what I have been paid during the year, what I own, how big my mortgage is, etc. If I agree I click a button and pay whatever I owe. If I don't agree, or some info is missing, I add it in and then click the button.
It's astronomically easier than filing the same tax information in the US and takes far less time even though the tax code is less clearly written and user support is almost totally nonexistent.
The nonexistence of a national ID system makes digital identification unnecessarily difficult. The idea that an individual has to redeclare to the IRS what has already been declared to the IRS on W2s and 1099s is just stupid.
It is not primitive, it is intentionally complex and riddled with loop holes so it can be manipulate by those who know how to creating all kinds of new markets for law, filing, and enforcement.
The US system is more complex, but I wouldn't attribute this to malice.
The reason why it's so easy to file taxes in lots of European countries is because the tax system (for the general population) is a lot simpler. For example in Austria you pay the same amount of taxes no matter if you're single or married, capital gains are taxed at a flat rate and directly withheld by brokers, and "social benefits" are typically handled outside of the tax system instead of being folded into the tax system.
In the United States the tax code is a lot more complex. You pay different taxes if you're married compared to if you're single, capital gains tax rate depends on your other taxes so brokers can't automatically withhold taxes, and there are a lot of edge-cases for certain other situations that can't be easily automated. Like tax credits if you're affected by natural disasters, different tax handling for railroad worker pensions, and so on.
With that complexity it is a lot harder to automate taxes, but it's also hard to retroactively reduce that complexity, as any changes will negatively financially impact some of the affected groups. Also I think that it might be easier in the US to handle those aspects as part of the tax system (instead of handling them independently), as the federal government has the authority to collect taxes, but direct payments (outside of the tax system) to individual groups might be harder? (But I'm not sure if that's true).
But all of that complexity seems to be added with good intentions. Just look at the "Coronavirus Tax Relief" as the latest example which by itself has a long FAQ page describing all of the details: https://www.irs.gov/newsroom/coronavirus-related-relief-for-.... Adding that to the tax code was probably the best short-term approach to quickly ship something (and lots of people are probably in favor of those changes), but that complexity adds up over time.
To me this looks somewhat like the broken windows fallacy: In countries where the tax code is simple and allow for "automated" taxes nobody is going to advocate for a new law if it makes filing taxes a lot more complicated. But in countries where the tax code is already complex adding one more complex law doesn't make too much of a difference.
Some of the complexity is also due to the design of our governments. I don’t know much about taxes in Spain, but I’d guess the number of income tax jurisdictions there is not a 3 digit number.
I file in both the US and Spain. There is nothing particularly more complicated about the US. Some aspects are more complicated in Spain (both countries tax on worldwide income). The notion that the complexity of the filing explains the inability to do it online is complete nonsense.
My post does give the tone of malice, and certainly what I was thinking about while writing but not my intention. But I do recognize there are "good reasons" why it should be manipulated as well.
I think that efforts to suppress things like "Easy Tax" where the feds would send you a pre-filled-out form that you could agree or disagree with are almost certainly malice. There have been multiple attempts over the years and the anti-tax Norquist crowd comes down. If they can't end taxes, they don't mind it being difficult to file taxes and they say that it's because they wouldn't mind someone accidentally under paying or under reporting taxable income and it not getting caught.
Part of the political resonance with the tax issue is the cost of doing taxes and the stress it causes. If the process was as simple as verifying a document, signing it and sending it back (or heaven forbid, docusigning it and clicking 'next') then the discussion changes to "what are my taxes doing?" and "is this worth it?"
I really like your second paragraph, hadn't considered that.
I have a hard time seeing past malice, when some of the most high profile easy to target tax dodgers consistently pull it off with only good outcomes, or when the IRS is given more money to specifically target them yet doesn't.
The reason the US lacks a national ID system ties back to a strongly held belief about state's rights, and that a national ID system would violate those rights, IIRC. I think it's already somewhat happened though, as I understand REAL ID to more or less be that.
Yup, I heard the same. SSN's are the relatively recent "compromise" made in the 40's. Initially as a way to access your, well, social security. In post depression times where people wanted security more than freedom.
ofc it was never meant to act as a national ID (and thus never tried to be secure), but more and more things are hacked in to make it act as such since there's no better option. A bit ironic given the state of social security nowadays.
I don't think it's related to national ID system though. The Social Security Number (or Tax Identification Number for non-citizen non-residents) does serve as a national ID for tax purposes. The IRS certainly already does have your W2's and does know who you are, that's not an issue.
The main issue is what the OP is about, that the US was considering creating such a system, but the tax prep software people lobbied against it.
I also wonder how much of an issue is the crazy complexity of the US tax code; it seems ridiculously complex to me, even for people without complicated or large income, I suspect it's a lot simpler in Spain. But this is just me guessing.
Never once seen a tax form here in the UK. Your employer deals with it. Every year they mail you a personalised table showing exactly how much each public service cost you (i.e. what they spent your taxes on).
How do you incentivize people to provide missing info if it will increase their tax bill?
The US system is intentionally designed so that you don't know what the IRS does or does not know. If you leave something off of your taxes that the IRS knows about then maybe they'll audit you and give you a big fine. So the optimal strategy is to report everything and pay the taxes you owe.
In Spain's system, it seems to me that the optimal strategy would be to either go with what the tax agency says or to report more information, depending in which gives you a lower tax bill.
The US system is intentionally designed for companies like TurboTax to make money off of you and to be a political tool.
There's a lot you still have to report yourself, like cash payments or sales, crypto currency, dependents, charitable contributions, and so on.
It's not like the IRS magically knows everything. You're acting as if people only avoid tax fraud because the IRS has a general idea as to what you owe and they keep it secret from you. People are generally pretty decent. The people intentionally committing tax fraud are gonna try whether the IRS keeps your taxes secret from you or not.
Yet there are businesses like TaxDown and TaxFix trying to get in the middle (just look at how much they're spending on ads in Spanish TV).
I seriously hope they fail, and also that they're never able to influence the powers that be / the whole process with Hacienda (they surely would like to make it more complex, more like filing a return in the US).
Does it also tell you of its own volition if the tax office owes you money instead on a return without you having to declare anything? For example, if the tax office knows where you work as an employee and where you live, and the tax code has provisions that stipulate that an employee gains a tax advantage of 0.xx€ per kilometre commuting distance between his home and his place of work, does it factor that in or doesn't it? Because that would actually be _nice_.
In the U.K. if you’ve overpaid in a given year (usually only a few pounds) you get the option to either roll it over to the next year, or a direct bank transfer to the account you give.
I’ve had payments pretty much instant (maybe next day) of repayments that are 4 figures, and ones that are just a few pennies.
Yes, if you pay too much in tax and their calculations reveal that, then, yes, you get money back on your bank account.
They don’t calculate commute deductibles for you, but mortgages, pension is something which is calculated for you based upon reports from the respective institutes.
While this is a fair criticism of our federal tax system, it still wouldn't be simple for me to file my taxes even if the IRS filled out all of my federal forms. Many places in the US have state and local income taxes, so for some people, the IRS is only one of two or three agencies that they fill out tax forms for. There are hundreds of different governments that impose income taxes in the US.
We do have several local taxes as well (in France). They are all handled by your equivalent of the IRS, everything is on the same web site (I do not even know what I pay in local taxes, I get an email telling me that it i due, and it is then direct debited from by bank account).
Yes, but you have a unitary government. In the US, states have a constitutional authority to independently administer taxes inside of their borders, and there is no way in hell that they are going volunteer that power away. Also, states have the power to tax income that is generated outside of their borders where have no power to require reporting. So they couldn't legally automate those tax filings even if they wanted to.
The US government has zero power to change any of this.
> Many places in the US have state and local income taxes, so for some people, the IRS is only one of two or three agencies that they fill out tax forms for.
(1) In many of those cases, state/local filing requires very small additional paperwork plus same-year federal forms.
(2) In many of those cases, the same thing the IRS could do for federal forms could be done by state/local tax authorities for their own forms.
So, solving the federal case both solves most of the problem and provides a template for solving most of the rest of the problem.
... and all you have to do is get hundreds of different organizations to agree to do something that nobody has managed to convince any of them to do. The template you propose is imaginable, yes, but logistically unlikely.
It makes sense to have a tax authority to fill out their own tax forms. I don't think it makes any sense to have what amounts to a nationalized TurboTax that interprets tax laws outside of their own jurisdiction.
States' tax laws are not just federal taxes on a different form. They're independent tax systems with different legislation and different judiciary. Maybe in some states the tax code is simple enough that it can be filled entirely from information on your federal taxes, but this is often not the case.
I've done state taxes by hand in 5 different states, including nonresident taxes. All of them go through the same basic process: copy your AGI from the federal form, adjust for local purposes (which for me meant running my finger down the list of adjustments in the instructions and going "nothing applies"), compute taxes, add in the use tax, and you're down. If you've got multistate tax issues (whether nonresidency or part-year), things get spicy because you have to allocate income across the different states.
And even then, the only difficulty I had was doing CA nonresident taxes, because it turns out that there's a weird collision with CA and a few other states for nonresident taxes, the other one being the state I lived in at the time. And CA's instructions doesn't tell you about needing the other form unless you read the instructions for that form in particular.
> It makes sense to have a tax authority to fill out their own tax forms.
That's all that is being talked about with #1.
> I don't think it makes any sense to have what amounts to a nationalized TurboTax that interprets tax laws outside of their own jurisdiction.
No one is suggesting that.
> States' tax laws are not just federal taxes on a different form.
Typically, a component (often the main component, with the state firm being smaller to capture special situations that cause variations) of state tax filing is exactly federal tax documents (not on a different form.)
Getting the state to prefill their own forms is a separate policy decision, but it's generally smaller impact in time/effort per filer as well as smaller impact in # impacted.
The acceptance of federal forms by states ranges from
"we don't even have income tax" to "copy over a few lines, multiply by this fixed number, and we have 5 other possible deductions" to "we have our own forms for everything, and you need to file a separate local tax return"
And heaven forbid you have any part year returns with a couple of states like the latter.
My point is that the whole system is inherently a mess and even if federal returns were automated, many people would still be spending considerable amounts of time preparing taxes.
I'm not suggesting that the federal system would print out the state taxes complete, I'm saying that just having access to the federally prepared information would greatly simplify the state filing.
Like my taxes are relatively simple, so my state taxes are just a few calculations using my taxable income from the federal 1040, and then also I have to attach any federal schedules I filed. Having the completed 1040 and printable schedules would reduce the state filing down to a few minutes of work.
If that solved people's problems, then there would be no need for people to buy tax prep software that does state returns... and some don't, but it is an extremely popular selling point of TurboTax and similar software.
My tax situation is not complicated and my state filing is 11 pages, plus 8 pages of worksheets. Federal schedules are not accepted, my state has similar but slightly different counterparts.
In Spain the tax filing includes local taxes as well as federal taxes. Spain has, proportionate to population, more subregions than the US does, and their fiscal policies in relation to taxes vary considerably.
The US system is just terribly implemented and there's no excuse for it.
Maybe it just optimizes for different things? I honestly don't see why you'd think your system is superior, we have a similar one to americans here in canada and it's just fine. No one really complains about it outside the internet, and to me the process you described wouldn't fit here as much. Having your own business, or side revenues, or not being a salaried employee is much more common here. And we (thankfully) don't have a mandated ID in canada or in the US, which makes it harder for the state to actually track all your income and expenses.
Yes TurboTax and the tax filling industry in general are pretty shady, and there should be free IRS/CRA tools for people to fill their returns directly. Unless you have a more complicated tax situation. But to me that does not have anything to do with doing away with tax fillings in general.
> The nonexistence of a national ID system makes digital identification unnecessarily difficult.
You can thank the Christians in the Reagan years for calling damned near everything "The Mark of the Beast", including social security numbers, attempted creation of a national ID, and more.
So we ended up with a de-facto national ID, being a hodgepodge of state IDs, RealID, SSN, credit scores from multiple (horrific) credit vendors, legal records, and plenty more.
Yeah FreeTaxUSA is amazing. They organize their UI in income and deduction sections labeled with the form name so it's easy to link them to whatever forms you get from various sources. Took me a couple hours to file my taxes in a single sitting even though I had like 5 different types of forms to put in (W2s, HSA, 1099-DIV, 1099R, DCFSA).
All this for like $13.50 federal and state filed online. Can't get cheaper than this.
I love how they ask you again if you enter something that's "not common" in case you misunderstood what something is for.
One of the big points in the article, and the complaint against TurboTax, is that they're positioning their product as "free", when it isn't.
And here is this subthread, recommending "FreeTaxUSA" … for $13.50+state.
It might be cheaper, better quality, or better quality/price … perhaps. But is this not exactly the same thing? (Perhaps with less advertising, e.g., not running a commercial to millions of people repeating "free" a gajillion times.)
This is my first year filing with FreeTaxUSA and I'm quite happy with them. I bought the upgrade version, it was like $6 or $7, and then state was $14 on top of that. Quite happy with them. One downside, because I had some investment sales this year, and they would only let me enter summarized information, I have to print, complete, and mail a form with the itemized data. Thankfully, it isn't too large in my case.
I really hope FreeTaxUSA improves their investment sales stuff, maybe with import capabilities or something. If you go for the unsummarized information, you don't have to mail anything. Unfortunately, you gave to go through a ton of screens and enter each trade by hand.
+1 for the import. Even if you only do a couple trades a year it can be annoying to type that in. If your broker does a LOT of trading, it is not possible to use FreeTaxUSA.
I LOVE the company and the product though, please pass along kudos. what a breadth of fresh air after years of using Turbo Tax. I now tell EVERYONE I know to use them.
Another request for better investment input. It was really bad for me this year. I suffered through it but improvements here would be super welcome. I paid for the deluxe stuff even though I didn’t need it just to put money into the bucket to hopefully improve things.
I have passed your +1 along. Thank you for putting your money where your mouth is.
However, I worry that the reason they haven't done it is because of lack of time. They spend a lot of time on finding and stopping fraud. If they didn't need to do that, I'm sure it would get done faster.
Some brokers support CSV download of trade info. If FreeTaxUSA could then upload direct from the customer's PC, maybe ask for help understanding column names, that would be good enough for some of us.
Tangentially, there are all sorts of good reasons for an investor to want a CSV available locally anyway. Analysis of one's misadventures, for a start.
> investment sales stuff, maybe with import capabilities or something ...
Consider that this requires cutting a separate deal with each individual brokerage. Even TurboTax omits some big ones e.g. Vanguard. Not on TT's list -- I checked just today.
I've never heard of FreeTaxUSA, but with my tax situation this year, I'm probably going to look for something else next year. In short, my awesome tax guy retired, and the new people to whom he referred his clients ended up being less-communicative and more expensive ($750 vs $400). I was okay paying my tax guy for his amazing services, but I'm not going to pay exorbitant fees for crap service.
My concern is that my tax situation, while not extreme, is not exactly simple. How well does something like FreeTaxUSA deal with small businesses (K1), part-time employment (1099?), stock awards and ESPP, and so on? If I can do my taxes in a day and be confident that I don't severely screw anything up, I'll totally go with that next year.
I found it MUCH more usable than TurboTax * and TaxAct. TurboTax was going to charge me >$300, and TaxAct was also > $150.
FreeTaxUSA was only $16.
* TurboTax can auto import your 1099s from most institutions. I did have to manually import 6 different forms into FreeTaxUSA - but I think the process was still faster.
I believe it handles all that. Now if you do a lot of stock trading, that's seems to be a problem. Not that it can't do it, but in the amount of data entry that has to be done.
Another reason to stick to simple index funds, and if you want to play stocks do it in a tax privileged account so you don’t have to bother with the paperwork.
This has always been my excuse for not trying FreeTaxUSA. I figured it was only for people who have extremely simple 1040 returns + a few stocks or interest. My federal return is 20 pages long, including schedules 2, 3, B, D, Form 8606's, 8889 and on and on and on. I've always been afraid I'll get 85% through and realize I need a more expensive tax prep software to file everything I need to file--and then have to go back to TaxAct and re-type everything anyway.
Yeah I did not deal with stock awards or ESPP this year, but used Freetaxusa with K-1 and 1099-NEC and it was just fine. My understanding of the QBI was a little different than theirs but I think theirs is standard (given that I am very much not a tax pro, just an excessively literal person).
I used FreeTaxUSA this year to file and was happy with them except for a pretty dark pattern.
If you google "FreeTaxUSA" and log-in that way, it'll change your free-file account to a paid account and there is no way to change it back. To free-file with them, you need to always log in using the special IRS link.
I thought this was pretty annoying, especially as there's no way for customer service to change it back. Their recommendation was to make a new account and re-enter all my tax info.
There are 2 parts to tax returns in the US: the Federal File and the State File (though, not all states require you to file taxes). With FreeTaxUSA The Federal File is always free. The State File is $15 unless you make under a certain amount and use the IRS link to get to the website.
This IRS link issue is something I've noticed with TurboTax and TaxSlayer in the past. They hide their free file (even the Federal File) from users unless they use the IRS link.
That's weird, I've never used the IRS link and it always left me on the Free path. I'm not low enough income or with simple enough returns to qualify for the free filing that TurboTax used to offer either.
Wow, I wonder if that’s a sure route to start a competitor company, develop it a bit, and expect a sure buyer down the road? Would be a pretty funny game of whak-a-mole for them to be playing to keep the competitive landscape mowed.
That looks pretty similar to Wealthsimple Tax (formerly simpletax) that we have here in Canada, which I also recommend. I used to hate dealing with the shady tax software we have here in canada and as always we had even less options than you guys have in the US, so simpletax was a gamechanger
They do force you to prove you have their app installed on your phone to use it, though installing it and uninstalling it afterward isn't that much of a hassle.
FreeTaxUSA for more "complex" fillings (i.e. multiple states, advanced investments, etc.), otherwise save coin and just use Cash App Tax (formerly Credit Karma Tax.)
P.S. Use FREETAXUSA 10 for 10% off, and go through TopCashback for cashback
I used FreeTaxUSA for the first time this year and liked it, but am thinking I will not be able to do it next year because they don't support more niche state form that I want. Other than that, I just have 1099 and W-2 so it isn't even that complicated.
They support the federal version, and did leave them a message, so we'll see next year.
Sad to hear about this after having paid $200-some for federal and two state returns last night, but I've already set a reminder to use them next year.
I run a pass-through entity (S Corp) and also have investment sales to list and I've been using FreeTaxUSA for three years now. I don't think I've paid for federal yet and state (single, CA) is always $15. I used to pay at least $60 for TurboTax for many years prior.
I don't have a crazy tax situation, just some freelancing, so I usually used freefillableforms.com because I didn't want to pay for TurboTax. For some reason it errored out when submitting this year and would not let me re-submit it, so I had to use an alternative.
Ended up using FreeTaxUSA and was pleasantly surprised. Was way easier to enter all my info in than TurboTax, and pulled up the same refund amount. I don't see why I would want to use TurboTax when the free alternative is free and easier to use.
I hate how this story is always framed as the fault of evil TurboTax/Intuit. They are simply lobbying for their continued existence. Countless companies do that. The real villains of this story are the politicians who TurtboTax/Intuit have successfully lobbied.
The problem isn't people trying to influence the government to do the wrong thing. The problem is the government can so easily be convinced to do the wrong thing.
> The problem isn't people trying to influence the government to do the wrong thing. The problem is the government can so easily be convinced to do the wrong thing.
It's both.
If you tried to change the government to fix lobbying, every company would lobby against it. It wouldn't pass.
Also I don't really want to hear about how American citizens need to fix their government when they have no time for civic engagement. Independent polls show the US Govt has misaligned priorities to what the people want, and they often have a rock bottom approval rating.
Let's start by making voting days holidays, guarantee a livable minimum wage, guarantee time off like the rest of the sane world, let that marinade for a while, then let's criticize people for their lack of engagement.
Trending outrage seems to be the only way to move the needle at the moment so trying to undermine this article is also undermining progress.
>Trending outrage seems to be the only way to move the needle at the moment so trying to undermine this article is also undermining progress.
I am pointing out the root of the problem is not TurboTax/Intuit but instead the government. Your comment is effectively the doing the same thing to my comment that I did to this article so I don't understand your criticism that I was "undermining progress". It isn't like "making voting days holidays, guarantee a livable minimum wage, guarantee time off like the rest of the sane world" is a much easier to accomplish political goal than "fix lobbying".
I certainly do blame our politicians for bowing to this type of lobbying, but I think it's a little weak to claim that the companies that do the lobbying deserve a pass. Asking your government to adopt policies that is actively against the interests of most of the people in the country is immoral, regardless of the reasoning behind it.
> Asking your government to adopt policies that is actively against the interests of most of the people in the country is immoral, regardless of the reasoning behind it.
To solve the problem, you can either liquidate all immoral people, or harden government against the desires of immoral people. Eliminating Intuit would just result in a new company picking up where they left off. Blaming and condemning Intuit is a no-op and a waste of time.
"It's not my fault slavery is legal and I'm profiting off of it!"-Thomas Jefferson, probably
Fully agree with you that saying "This rent seeking entity with a will of its own and deep pockets to spend on lobbying, is solely a byproduct of a broken system and not also fundamentally culpable at this point for the continuation of that system". Governments and corporations are made of people who make a choice. If a company choses to profit off a bad thing the government wants to do, we can decry the industry as well.
At some point there was a complex tax code, and TurboTax et. al. didn't exist yet and were not to blame for it. At this point, they do exist and they must share in the blame.
>Asking your government to adopt policies that is actively against the interests of most of the people in the country is immoral
My point was that this is something we all do. I have never met a single person who was always on the side of the greater good for every single political issue. I don't think voting or lobbying for your own interests is inherently immoral. If it is, basically all of democracy and capitalism is immoral.
Who cares? Complain to the Pope about immorality, and he'll make sure they go to Hell. While you work on that, hopefully someone is working on making tax filing simpler, and preventing lobbyists from blocking that effort.
So every time you have decided to drive your car somewhere instead of take public transportation you are being immoral? The reason we need nuance here is without it we are all evil people contributing to the destruction of the planet.
Well, yes, that was the point. I was highlighting the ridiculous of the previous comment’s universal statement that anything selfish that harms others is immoral. There is nuance here that a statement like that ignores.
If you tried to change the government to fix lobbying, every company would lobby against it. It wouldn't pass.
That's primarily because it would be unconstitutional to "fix" lobbying, at least they way detractors of the practice would likely consider adequate. It's right there in the First Amendment next to freedom of speech:
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
Totally. I've had this argument with some of my lawyer friends. I admit that "fixing" lobbying is a complex issue that does not have one simple answer.
But one thing it shows is that the American democratic process is supremely broken, because we don't seem to be able to punish our bad politicians who are accepting bribes. All you have to do is look at the average age and tenure of the senate compared to approval ratings and it tells it's own story.
My last point is that money is not speech, corporations are not people, and one person equals one vote. If you etched all that in legal framework you would totally still have lobbying, but I'd like to think it would help.
Bribery is illegal. Even of the form often presupposed on HN threads: "Congressman, if you vote for this bill, Exxon will make sure you have hundreds of donors contributing thousands each to your next campaign." I'm 100% sure such quid pro quos still happen, but because they're unambiguously against the law, they represent at most a tiny fraction of the lobbying dollars that flow through DC.
Most lobbying is boring stuff like proposed amendment drafting, outreach to Congressional and agency staff, highly targeted issue & message test polling, ...
"Independent polls show the US Govt has misaligned priorities to what the people want"
are you saying you think people in power care about the people they rule over?
"Let's start by making voting days holidays"
if voting could change anything they wouldn't allow you to do it. they literally shot JFK, the elected president, almost 60 years ago. the idea that everything is not completely fucked at this point, is so incredibly naiive.
> if voting could change anything they wouldn't allow you to do it.
They don't have to disallow it, just make it difficult and inconvenient. The loud part is "election security". The quiet part is "voter suppression".
Like, why the hell do so many states only allow a SINGLE day to vote? I can understand not trusting the mail-in voting that Oregon and some other states do, but certainly we can all agree that letting the polls be open for multiple days with long hours would be a good thing, right?
> "Let's start by making voting days holidays"
I hate that there has been such a push for this. It's not going to increase turnout. It will not increase turnout from people that work emergency services, and will lower turnout for people that work customer-facing jobs like retail and restaurants. Just ask your cashier how easy it is for them to get Labor Day, Memorial Day, or Independence Day off of work. They will laugh in your face.
Companies are not alive. The human beings running Intuit are lobbying for the continued existence of an unnecessary and harmful organization. That is unethical/immoral/evil behavior. Accepting their bribes is also evil behavior. There's no need to pick the "real villains", everyone involved is a villain.
It's true that some employees would be hurt if Intuit went out of business, but paying someone doesn't magically make their behavior acceptable. You can't pay someone to harass people on the street and then say "sorry, I can't stop or my harasser will lose their income, the real villains here are the police for letting me do this."
>I hate how this story is always framed as the fault of evil TurboTax/Intuit. They are simply lobbying for their continued existence.
Fascinating way to reframe this as a natural survival instinct of...checks notes... a corporate entity. An entity that exists at the government's pleasure, and whose charter can be revoked by said government.
Let's reframe your own logic:
> The real villains of this story are the politicians who TurtboTax/Intuit have successfully lobbied.
The politicians did nothing illegal by accepting the lobbying on behalf of TurboTax, after all. Under what rule or law would you punish them? Surely you can not fault politicians for earning money to continue to survive in politics, no?
You can go in circles with this kind of thinking.
Instead, we should look at outcomes. What do we want to happen with taxes? Ideally the government sends you pre-filled paperwork. Who is opposing this outcome? Intuit. Hence they are villians.
>The politicians did nothing illegal by accepting the lobbying on behalf of TurboTax, after all. Under what rule or law would you punish them? Surely you can not fault politicians for earning money to continue to survive in politics, no?
First off, I never said anything about a legal punishment. Secondly, politicians are ostensibly supposed to act for the good of their constituents. Corporations are motivated to act for the good of their shareholders. In this situation TurboTax/Intuit is operating as it is expected/supposed to act while the politicians are not.
I'm confused why you are holding politicians to a standard that you are unwilling to apply to corporate entities, who serve politicians explicitly via the government and their corporate charter. Either both are acting according to their interests and we should examine outcomes, or neither are, and the system is broken.
Because the corporations are acting amorally while the politicians are acting immorally. Corporations are not obligated to better society. Politicians are. The corporations are ignoring something that is outside their responsibility. The politicians are ignoring something that is within their responsibility.
"Corporations" don't act. The people who manage them do. These acts are not amoral; they have real consequences for real people, and need to be judged as such.
Corporations may not be obliged to better society, but it is entirely reasonable for me to look upon them unfavorably when their management intentionally and knowingly takes actions that make life worse for most people.
It is very strange that you believe that an entity can engage with a government but then be absolved of all responsibility for the outcome of that engagement.
This weekend I drove to the beach when I could have just sat in my house all day. I personally benefitted by receiving a relaxing afternoon at the expense of creating extra pollution for everyone else on the planet to deal with. By your definition that is evil and therefore we are all evil.
I think this is where you erred in your reasoning:
> The corporations are ignoring something that is outside their responsibility.
Intuit is actively lobbying about tax preparation, ergo it is their responsibility, ergo they can be judged for their actions on it. In general you are correct, in the specifics here, you are incorrect.
>"this as a natural survival instinct of... checks notes ... a corporate entity"
There is no need for the glib "checks notes" snark on a forum like this. I feel like it undermines the argument and makes the post come across as adversarial rather than constructive.
Truly. At some point, there is a person with far more money than their family would ever need, even only counting annual interest earned instead of principal.
Current CEO has net worth of >$100 million. In fairness, the poorest board member of intuit has half a dozen positions earning $150,000 to $350,000 and _may_ not have accumulated true financial independence. But other board members have over $200 Million.
Those people make the following decision Every. Single. Year: “let’s try to get the government to make taxes far harder and riskier for hundreds of millions of Americans so that I can be even more rich than I already am.”
It would be more excusable if they merely hadn’t lobbied for Americans at all, someone else did, and they reacted quickly to additionally reap the benefits of the same policy.
But when you are already well past having all the money your family could ever need, and choose to try to get the government to fuck over hundreds of millions of people, then the blame
lands on you just as much as the politician.
I think if you are going to be charitable, they aren’t just looking after their own bottom line. Intuit employs 14,000 people, so they are also doing as much as possible to keep their jobs.
Of course, that is still a drop in the bucket compared to how many people suffer because of their lobbying, but it isn’t about simply one person being greedy for themselves.
TurboTax/Intuit are bad guys for other reasons. Like trying to mislead customers like the article details, but I don't think lobbying the government to ensure their industry is not eradicated is necessarily immoral. They have perfectly reasonable motivations there. Most of us would act the same way in their position. It isn't their job to consider the societal ramifications of those laws. It is the governments job to see that lobbying and not let it outweigh the clear societal harm in just acquiescing to TurboTax/Intuit.
Perhaps the real bad guys are those same politicians, or others, that make the tax code so damn complicated that 50% or more of the population don't stand a chance of comprehending it.
If you're W2, and you have kids or 1099s the gov already knows about, there should be no need to file at all. State and local governments should tap into the federal feed, and there should also be no filing there. Any discrepancy that results in a bill or refund gets automatically sent out.
The amount of time wasted to do taxes, even a simple 1040EZ, is staggering. The fact that people with relatively simple tax situations are persuaded to use expensive filing services (H&R) or crappy software is criminal.
> ...people with relatively simple tax situations are persuaded to use expensive filing services (H&R)...
And when you go to an H&R Block office, you're talking with someone who doesn't really know taxes at all. They are just filling out forms like you might do yourself.
When my ex-wife and I had separated but were still legally married, she went to an H&R Block office and the tax preparer told her that she could file single. (No, you can't. It's married filing jointly or married filing separately.)
She also said our adult daughter didn't need to file at all because her income was below the filing threshold. (Yes, she did need to file because at the time she was on an ACA/Obamacare health plan.)
It's bad when I know more about taxes than the "expert" at H&R Block.
Any article on this topic is incomplete if it doesn't also include a paragraph on Grover Norquist. I'd argue that his influence has been far more effective than Intuit's lobbying.
Came here to say this. I will try to avoid committing politics in the HN comments section, but it is a true fact that one side of the aisle has definite policy preferences on taxes and maximally does not want them to happen quietly without people noticing them. They will say this, at length and on the record, when asked about the topic. Their positions are sincere and flow logically from both their political preferences and incentives.
Milton Friedman once commented that property tax is particularly unpopular because it's the only tax for which people still have to write a check[0].
That said, we could make income tax more visible without requiring tax professionals. (e.g., end withholding and send me a monthly tax bill; show the money go into my bank account and then back out, whether automatically or forcing me to write a check.)
Property tax is the only tax I know of, at least in the US, that's on static wealth rather than economic activity.
Your stock goes from 500 shares at $20 to 500 shares at $2000, no tax on that $999,000 gain until you sell.
Your house goes from $12,000 to $3,500,000, absent something like Prop 13 in California, your tax bill goes way up even though you have derived no income from the gain in value. This can be a hardship for people whose incomes have not kept pace with the house value.
Lobbying is a two-way street: it would be good if for once the reporters that investigated this topic would name the politicians on the other end of it, rather than just (albeit deservedly) condemning Intuit for the thousandth time
After reading similar articles in previous years I finally decided to switch. After 10 years with Turbotax, I switched to the Cash App tax app. It was a bit more work to enter the data, but it was actually free. Turbotax free tier barely covers anything and they will bug you every step of the process to upgrade.
As an American living overseas, I'm forced to file taxes every year even though I pay the IRS $0. It therefore seems very silly to pay around $100 a year for tax software.
In previous years, TurboTax's free option was pretty great. This year, my only real option was TaxSlayer, since the others required a US mobile number. It worked, but it was very primitive compared to TurboTax. I could've e-filed IRS forms directly, except I also needed to file state taxes, which directed me to use private software.
A very stupid system of filing a bunch of paperwork through private companies just so I can pay/receive $0.
Just to play devil's advocate though, there's a difference in the information conveyed between declaring you owe $0 and not making a declaration at all.
Or to put it into computer terms, IRS doesn't interpret "no return" as meaning you owe zero taxes but rather as a null (i.e. a person that didn't file a return).
I kinda wish this particular topic could be banned from HN unless and until there's new news. It's just an endless re-run of the same outraged conversation approximately every 4 months.
Do you mean build a list of related threads? One would think so, but it wouldn't be simple. You'd need to choose keywords, figure out relevancy.
This case is a good example of the difficulty—the only word that (sort of) appears in all these titles is "tax", but searching on that alone would cast too wide a net.
My sense is that we'd be better off writing software to allow the community to collaborate on a list of related URLs. That's the plan anyhow.
Not sure why it makes sense to have a group with a financial incentive to take more of your money be the ones doing the calculating. The IRS can be a nasty, evil organization — In 2013, then Acting Director of Exempt Organizations at IRS, Lois Lerner, apologized to a room of tax lawyers for the IRS’s inappropriate targeting of conservative political groups.
If the IRS is in charge of doing people’s taxes, there is a non-zero chance that the IRS will not be completely trustworthy.
The real conversation should be about moving to a consumption tax and eliminating the political power that comes from income taxes. The current system is intentionally complex — designed to give politicians power to favor and disfavor behaviors and industries.
The consumption tax is something that sounds like a great idea, but in practice isn't.
For taxes to be fair, people who have more means should pay more, as it's less of a burden on them than people of lesser means. If you think of someone who's not too well off, their entire paycheck is going to food and rent, and not savings. For wealthy people, some part of their paycheck is spent on consumption of things, but a larger part of it goes to savings and investments.
There's a reason why rich people go to tax havens that have no income tax and only sales tax.
The IRS currently receives almost all the information needed to do taxes for most people. There are not technical reasons why they could not share their calculations with you and give you the option of accepting them or doing them yourself and submitting them anyways.
But I agree, the current system is intentionally complex and should be simplified.
Your example of the IRS being evil is their director publicly apologizing for overstepping the line? Wow, I wonder what you think of the other 3 letter agencies then..
The amount of code necessary would be pretty significant, even the software used by CPAs is somewhat complex and changes every year. But yes, software could do all of this - especially if the tax code were not intentionally convoluted in order to satisfy greedy lobbyists
It seems to work and will produce PDF of the forms with data filled in for one. I appreciated it. It will also handle some of the states. It took a while, but I did find how to check out via subversion:
I use subversion so rarely, I always seem to have to figure out that the package name is "subversion" and not "svn" to install on my OS. Then I need to find a tutorial to know how to check it out. Then I just needed to build open tax resolver (no binaries are available for my OS). I have gotten way too used to git and github. :)
It gets harder every year to find tax software that isn't owned by intuit... I don't think any of it is free anymore for anything beyond basic returns. The IRS' paper returns get more complicated every year. It seems Intuit is winning this despite all the complaining.
"Cash App Taxes" is owned by Cash App which is owned by Square/Block Inc. It used to be owned by Credit Karma, which was bought by Intuit, but they (were forced?) to sell it.
Yes, the Justice Department mandated that they jettisoned it as part of the sale, as they knew what Intuit would do with it if they got their paws on it.
I'd been satisfied with TaxHawk in the past, but when my tax situation changed this time around I tested it with the same inputs as TurboTax with upsells costing 10 times more. After getting the same results on both, I gladly used TaxHawk again.
But TurboTax does a great job. It’s a good product. Happy to pay for it. Not sure why all of the hate. The problem is the tax system itself, not the software.
They have dark patterns every step of the way to try to get you to pay more and to share your tax information. Their "free" is oftentimes not free. And on top of all this, there are countless articles about them lobbying to maintain the status quo of complicated taxes.
What does that have to do with original 'almost 0 time' claim?
Also complexity of american tax code didn't come because of turbotax/intuit. Do you really think we have stuff like credits for home improvements, credits for student loan payments ect are in tax code because of intuit?
There are politicians right now trying to cram in more and more tax code because those incentives are incredible popular with American public. All this is not because of intuit.
You got me "almost 0" was hyperbolic, I'll be more specific: In multiple countries personal taxes can be completed with little more than a signature, and most are simpler in general... the US ranks near the bottom in terms of complexity.
I didn't say that Intuit caused complex taxes, I said they actively lobby to keep them complicated.
Intuit spends millions on lobbying every year (against simplification efforts, as well as efforts for the government to create its own free digital tax filing system) and has recently pulled out of a federal free tax filing program, and are being sued by the FTC for their use of "free" in their marketing and performing bait and switch.
> I didn't say that Intuit caused complex taxes, I said they actively lobby to keep them complicated.
they do? I know they lobby against free website. But i don't see why they nee to lobby for complicated tax code since all the tax exemptions and complexity is widely popular with american public.
I cant imagine a politican running on removing home improvement exemptions to simplify tax code.
They've specifically lobbied against automatic filing on multiple occasions, spanning several administrations, and they've also lobbied against tax code simplification.
Are you engaging in this conversation to seek more information, or in an attempt to defend Intuit? most of these answers are a simple google away.
You are right i can tons of examples and articles for 1 but i am looking for 2 specifically.
tax code simplification isn't the same a tax filing simplification.
edit: Yes i am not saying its not simple. 'Tax code' means something specific, its not a generic standin for anything that has to do with taxes. Tax code has nothing do with tax filing itself. I am not sure how to explain this better.
So you're saying that return-free filing is not more simple?
Going to end it the conversation here and log off for the day, nothing personal, it's just a waste of my time to connect the dots in such a painstakingly specific way.
Intuit has been spending billions to lobby for complicated tax filing process and against the government primarily filling out your forms for you based on data they should already have on hand from mandatory reporting. That's why people hate them so much.
As soon as you have to import any investment data (who does not have at least $100 in S&P these days???) and you also have to file state taxes, then turbotax ends up begin expensive. I think I payed something like $300 or close to that. I used to pay my accountant $500. And he was taking care of everything. Now, I have to collect data, struggle with turbotax ugly interface. Next year, I am going back to my accountant. My time is worth more than $200 bucks.
Big props to the state of New Mexico. Their online tax filing system was already pretty good last year, with a couple of rough edges. I went to file this year, and here was my experience:
1. login
2. enter my AGI from my federal return
3. enter my estimated taxes
4. done
Postscript: 36 hours later, refund in my bank account
I have no W2 income, am fully self-employed with no 1099's either. I had no capital gains/losses to report this year, but I have the feeling it would have been very easy to deal with that it had it been necessary.
The government's forcing them to give away their software and services for free. Why would they not fight against that?
Have the government give a $100 tax credit to all tax-paying citizens to pay for tax software. You keep competition and private industry and companies get paid for producing their products.
I was heavily considering using Turbo Tax a few years back until I learned about the various Free File options on the IRS. Previously, I was dumb enough to rely on those tax-preparation services despite my taxes being simple enough to do on my own... I was worried some of the options wouldn't be 'feature-complete' as I had some money earned from self-employment, but they were just as good (or better) than Turbo Tax despite the 'older' UI.
Even if you don't technically qualify for Free File, the fees are much lower there than what you would pay on Turbo Tax. For example on 1040Now filing a federal tax return when ineligible for Free File only is about $20. Intuit can crash and burn.
As someone who wanted to file taxes in Oregon this year without using anybody else's software, I was completely appalled by how inaccessible a system that literally every working American will have to interact with at some point is. They even got rid of the "Free Fillable Forms" option, so if you wanted to file and do your own taxes for yourself, you have to do the paper forms.
It's 2022, and I can't submit my government mandated math homework electronically as a private citizen. That should piss an incredible number of people off, but nobody ever seems to think about it.
I honestly find America's tax system to be one of the most bizarre things about the country, TurboTax shenanigans being part of that.
Every year around this time I'm reminded how lucky I am to have at least a somewhat sane and pain-free taxation system here in AU. Me filing a tax return involves bringing a folder of receipts, a page of notes, and handing them over to my accountant who charges me about $120 (tax deductible) the end result of which is I normally get a small refund from the ATO a couple of weeks later.
For me, in AU, it's as easy as 30 minutes filling in information in a government web application, namely myGov. Information which is, for the most part, prefilled for me.
myTax is written by the Australian Taxation Office and is fairly simple and effective. It adopts a really simple design where you begin by ticking some boxes about your income sources and deductions, and then you only see the options relevant to you.
Tax returns competed via this method are back in less than a month. Probably half the people I know do their own tax returns for free.
2 hours before deadling I figure I'll post my experience. I tried to use TaxSlayer to file an extension but it was slow my sessions keeps ending...over and over (same complaints on their Twitter).
I had an account on TurboTax as well...tried to file an extension. Well, at least their system is up and running and responsive. They tried to sell me "Premium" in the middle of it. No, I don't want premium because I won't be able to finish my taxes in 2 hours. Just file my damn extension. Thanks!
My 2nd biggest[*] gripe with TurboTax (and Intuit) is that their software quality is low!
I filed my taxes on January 30, and still can't print out my tax return. They tell me that the tax return is not "finalized" (or something like that), along with the "helpful" comment that usually forms are ready by end of January... it's April now, FFS!!
[*] Biggest gripe being their effort to undermine auto-filing.
This year I had my taxes done by a CPA rather than by TurboTax as I had in previous years, and I'm so glad I did. There was no deceptive upselling. I never got confused and had to go hunting around on the internet for the meaning of some obscure question. I got to keep more of my money than I expected, and I plan to do the same thing again next year.
A lot of people dislike turbotax, but compared to what? HR Block which is basically a payday advance company at this point? I've done my taxes with turbotax for awhile now and haven't had any major issues. Maybe they are evil, but not enough for me to care considering I use it for like an hour or two once a year.
> …There’s been proposals in Congress on and off for years, from people like Elizabeth Warren, to appropriate money to the for the IRS to do what it was thinking about doing back in the George W. Bush administration 20 years ago, which is to join many other developed wealthy countries in having an online filing process that’s free and offered by the government to all of us as citizens.
So Turbo tax spending less than $2 million was more powerful than the agenda of POTUS? Boy, Amazon with their $20 million in annual lobbying is getting taken for a ride.
OK, you can disagree with the assignment of responsibility from OP (I'm happy to blame the politicians), either way that's the alternative we don't have but most similar countries do.
Perhaps the tax system in the US is far more complicated in than it is in foreign countries. I am trained in UK tax law, but not in US law, although I do file taxes in the US. The UK system is far more straightforward than in the States. On account of this, the US tax system may not lend itself well to automatic pre-filing.
A good example is CreditKarma. They came out with a great webapp and TurboTax immediately buys it and puts it behind a mobile app. They got rid of the webapp. Personally, I refused to even try the new version because I didn't want a mobile app.
I noticed that if you try to download a previous year's W-2, TurboTax will make you select "Why" before allowing you. One of the options is "considering an alternative tax software". Such an obvious dark pattern for retention.
Just lie and select "I need to fill out the FAFSA"
Blaming the current state of affairs solely on TurboTax is giving the Republican Party yet another free pass for their stated and explicit opposition to easily-filed taxes.
Agreed. At least until recently though everyone could claim a deduction for the costs of their tax preparation. This deduction is now only available to those who are self-employed and even that is scheduled to completely go away in 3 years. See:
Afraid to ever use TurboTax after it put me into a multi-year audit cycle. I was also paying for maximally upgraded plan with all insurance and everything.
That thing would be 5x over-budget, take 5+ years to build, there'd be a laundry list of contractors/subcontractors involved, and one of them would eventually leak customer data.
And I find it concerning that many people seem to feel that this is a make or break feature (as this is always brought up in this discussion). It really isn’t that hard to sit down and focus for a half hour to actually look at your tax documents and type in a few numbers.
I find it concerning you assume my taxes look like typing in a few numbers that takes 30 minutes. Without Robinhood auto-import for stock sales, I'm looking at manually entering 100+ transactions with cost basis, sale price, sale date, and long-term vs. short term entries.
P.S. if anyone knows another tax-filer with Robinhood auto-import, feel free to mention.
This whole situation is a depressing demonstration of the ratchet effect [1].
Intuit obviously doesn't want free filing. They'ee engaging in rent-seeking behaviour and free-filing would obviously hurt their business. Politicans are bought ("lobbied") for a pittance.
But the dirty little secret here is the complexity of the tax code. It's truly ridiculous. Everyone fights simplication of the tax code because every simplification will remove somebody's special exemption, write-off, accelerated depreciation schedule, tax credits and so on. Intuit loves this. The tax industry (not just Intuit) loves this: the more complex it is, the more money they make.
Worse, there's almost an institutional resistance to ANY simplification based pretty much on the slippery slope argument: well if they come for Acme Co's tax credits for not growing corn this week they might come for mine next week.
There's also an awful lot of dishonesty built into the system. Payroll and social security taxes are classified as "employer taxes" (in part at least). There are no employer taxes.
Simple example: Social Security is 6.2% on the employer and employee (up to a cap). So if you have a nominal income of $100,000, the employer is really paying you $106,200 and sending $12,400 to the Federal government.
Can't we just call this what it is?
And don't get me started on the bullshit that is the standard deducation.
In an ideal world, I'd like to see a consitutional amendment for universal basic income of $X per US citizen tax resident, a tax free income on the first $Y of personal income and just a flat rate tax beyond that. Congress gets to play with the values of X and Y.
> Simple example: Social Security is 6.2% on the employer and employee (up to a cap). So if you have a nominal income of $100,000, the employer is really paying you $106,200 and sending $12,400 to the Federal government.
> Can't we just call this what it is?
You seem to be under the impression that in the absence of the employer side of the FICA tax, you would be compensated the full $6,200. This however is not the case. It is almost certainly true that you would in fact see very little if that portion went away tomorrow due to how tax incidence works and how your salary is determined.
The one that really aggravated me though was the one at the end: after you FILE your taxes, they present this damned progress-bar looking thing as if you are somehow “not done” yet, as if this totally optional product sale is a required step!! No, no, no, that is just misleading garbage, and it is so annoying to have to constantly hunt around the page for the magic text to get around these things. I mean, I couldn’t even reach the page that lets me download my forms as PDF until I skipped this upsell.
What’s more, the product itself is getting more expensive but worse. On desktop, the whole thing is just a blown-up mobile UI (are that many people doing taxes on their phones!?) with all kinds of things unnecessarily hidden. On page after page, there is more than enough space to show everything but instead it’s giant white space everywhere; they HIDE things behind disclosure arrows, and with no logic whatsoever; e.g. on one page it shows the 2020 numbers by default but hides all the 2021 numbers behind arrows!?
Guess what isn’t an insultingly-small, truncated experience on desktop? The ads, the upsells. THOSE are full-page, taking full advantage of screen space and even scrolling off the edges.
Really shows their priorities.