Claiming high user satisfaction, IRS will decide on renewing free tax site (opens in new tab)

> instead of asking why do we need to do taxes when the government knows everything about us that they could do it for us

They cannot do everyone's taxes since what they know about many individuals is incomplete.

> should we really have that little privacy?

Put that way, the answer is no. On the other hand, virtually everyone demands services from their government and very few people want those services to be transactional (e.g. most people demand roads, few people want to pay based upon their usage of those roads). That means the government needs some form of revenue. For various reasons, it has been decided that a person's income should be a portion of those revenues. In order to ensure that people are paying their dues, the government needs to collect some information. Are there other ways the government could get revenues? Sure, but all of them are going to be problematic in some form or other.

> Of course, those ideas, liberty and privacy, small government, etc., isn't really fashionable with the latest generations and most people would gladly give up their freedom and privacy to save having to fill out some paperwork.

One has to be careful about generalizations. Even though a desire for liberty and privacy may be universally appealing, we would find that people's views on what those terms mean varies from generation to generation and from individual to individual. Note that I said the meaning changes, not a person's desire for it. As for the desire for small government, well, some people want small government and other people don't. It is a far less universal ideal.

Liberty and privacy are fashionable. The problem is that our Congress passes hundreds of pages of domestic spying legislation in the middle of the night. It’s not exactly the School House Rock democratic process we learned about in 4th grade.

But that’s really beside the point. If you are like millions of other Americans filing W2s, the fact that you work for your employer isn’t a secret. Your salary isn’t a secret. Most people will take the standard deduction. There’s no reason why that can’t be the default. It’s not a privacy violation for the IRS to use that info to make peoples lives easier.

>we change the way the government is intimately entangled with our lives?

I've lived in Sweden where taxes are not just automatically filed but every citizen can trivially look up anyone's tax returns and nobody ever saw it as the government being intimately entangled with anyone's life.

Privacy violation would be to look into how and on what you spend your money, not that everyone pays their share of taxes. That tells you nothing about what people spend their money on. Merely that they aren't avoiding paying their part. I don't see the problem with the government automatically doing my taxes or anyone being able to see that.

> I guess it was originally done this way because in the past people actually had some semblance of privacy and the government didn't actually know a great deal about people's income.

You still had to file taxes, though, so they would know about your income, if only a year behind. I read somewhere that tax withholding only started during WWII (and it was supposed to be temporary). It's really the withholding that would give the IRS the information needed to file your taxes in advance, so it's only a fairly recent possibility.

It was the older generations that gave up freedom and privacy for convenience, making that choice for everyone.

Up until WWII most working class people didn't pay federal income taxes.

In Australia, when doing the yearly tax filing, the ATO website already prefills all/most of the amounts because they already know those anyway

Your job is it then to correct things, fix wrong ones and submit what they couldn’t get automatically

The ATO website is also veeeery nice! I was surprised how simple of a task doing taxes was

> liberty and privacy, small government, etc., isn't really fashionable

Your negative freedom and ownership of property is recognized and enforced by the tax-funded awesome power of the state. If you like small government there is no lack of countries that you can emigrate too where the internationally-recognized government is too weak to enforce its protection over much of its society. These are usually places that are too unstable to be palatable to someone from a developed nation.

> should we really have that little privacy?

As someone else mentioned, the government already has to know that to know that you are paying the right amount of tax given your means. Alternatively, consider simplifying tax laws so that it needs to know less. Also, look at regulation that limits what the government can do based on the information that it has on you; for that matter, businesses too, for privacy's sake.

The two aren't really related. A implies B does not mean B implies A, ie negating B won't negate A, ie not having automatic tax filing won't remove the loss of privacy

Might as well say "Maybe instead of changing the way we file taxes, we solve world hunger"

(I say this while voting for small government & making efforts to preserve my privacy)

You are more than welcome to go off grid and enjoy your privacy.

Highly recommend a payroll service for this, like Poppins. It costs like $50/mo for a single employee, which is rounding error on nanny wages, and they do all the withholding and state tax filing for you. Then give you instructions on how to fill out federal tax Schedule H on your personal taxes (1040).

I did it manually the first time around and it was a pain in the ass.

Non-US citizen here: you have to declare what you paid the nanny to the IRS? Where I'm from, only the receiving end of the money needs to declare how much they earned. The only reason we file expenses is for tax deductions. The US tax system has always seemed so hostilely complex to me.

Out of curiosity, what made it difficult?

Not knowing what was required for sure? Figuring out how to fill out the 1099-MISC? Knowing how to file it with the IRS/state?

I remember it being a bit tricky at first but once I knew the right form it only took a few minutes. The hard part for me is keeping track of rule changes.

Payroll service works though =)

Yep, there's a thriving industry around nanny payroll services, if you don't want to become an accountant. Wish the common use-cases were streamlined for DIYers.

Maybe Congress can work on this next.

It’s a joke in conservative circles that taxes should be due on “the first Monday in November.”

They're probably right about that?

Why wouldn't that be the case? People put up with raises in all kinds of expenses without really noticing or complaining. Why would it be any different with taxes?

Only 14% of the US is foreign born according to the last census so that’s not enough to make up the difference.

The functional literacy statistics are bad no matter how you dice them.

This may be a misinterpretation in the study but even if every single multilingual person in the US was counted as not being proficient the number would not meaningfully change in context of the conversation (i.e. still above 1/3 in the extreme case).

The tax code is also designed to incentivize behavior that we wish to promote as a society. for example, directly reducing the tax versus tax benefits of a 401(k) and other such mechanisms. ultimately, the government is there to serve the interests of the people and society.

I wonder if they went through school and just didn't retain it, or if they were simply not educated at all.

If only there were a way for you to tell the IRS how many dependents you have. Seems like we should just scrap the ability for folks to fill out anything and let Daddy Intuit do it for us since we're all so helpless with our taxy waxies.

The US tax code is 70,000 pages, and is revised an average of once per day:

https://taxfoundation.org/blog/how-many-words-are-tax-code/

A typical federal tax filing for our household is over 100 pages long, and that’s just the stuff that we need to mail. The accompanying directions and worksheets are probably close to 1000 pages.

Also, lots of the directions are incredibly obfuscated once you start getting into those 1000 pages.

> If you do A and not B then you can do C.

> Example calculation of C (usually over a page long):

> Bob wants to do C but encountered corner case exceptions E and F in the absence of event G. That implies B, so here’s the arithmetic for doing D (which is covered elsewhere in this book, and is probably irrelevant to your situation).

This is just standard stuff TurboTax handles. God help people with filings too complicated for that!

(And, yes, I used to do taxes by hand.)

> Following tax forms is so braindead simple

One year, I had to spend a good deal of time working around a cycle in my taxes--VA wanted me to do my CA taxes first and CA wanted me to do my VA taxes first, and the instructions that explained how to handle this situation were only one on the one form that needed to be used to solve it, with nothing telling you maybe you should look for that form instead.

Furthermore, there's quite a few cases where the instructions basically tell you "fill in the number that belongs here" without giving a good idea of what numbers actually belong there. Here is an example of such an instruction in its entirety:

> Enter in line 5 the amount of pension, annuities, IRA/Keogh distributions not taxed on your Massachusetts Form 1.

The hard part of taxes isn't knowing whether or not to add or subtract two lines. It's knowing which lines shouldn't be 0!

We can have a problem with forms being on paper and not doing "add this" or "subtract that" automatically? It was available in other countries 10+ years AGO ;)

Withholding too much is literally required under the law. If you don't withhold enough, at tax time you could be liable for penalties unless you also pay quarterly to make up the difference. This counts for all of your income, not just the income from a W-2 job.

Fixing the withholding system to account for the real world would go a long way toward simplifying reporting and would improve compliance.

Agreed, this is not a problem they want to solve.

If having spent some time in IT support has taught me anything at all, it’s that “reading basic instructions and following them” is not among the talents of a huge portion of people.

Even the people I work with as team mates often call me and do a screen share for a problem and most of the time the answer is “dude, you’re just machine gunning the buttons before I can even read them. Lets just slow down for a second here”.

Technically, you can vote for anybody you like, including yourself or Santa Claus. But no, LaRouche was never going to make it.

Both sides? There should be just one side; the citizens they are supposed to be representing. This comment kind of sums up how far gone we are in America.

Isn't that all politicians? Or is their paycheck not counted?

No. Congress represents the American people, not corporations. There is no “both sides” between people and corporations any more than there is a both sides between Americans and Canadians when discussing a trade bill.

You're mistaking corporations for people.

You forgot the /s

With voting to elect a representative, the point is to choose whoever you feel best represents your interests. A conflict of interest does not matter because the self interest is kind of the point.

With voting on passing legislation, the point is to choose what best represents the interests of your constituents, conflicts of interest matter because they may cause you to not properly represent the interests of your constituents. Self interest is not supposed to be the point.

This is the entire point of a representative government.

I’m sorry are you implying that congresspeople are receiving monetary compensation because they live in poverty

Yes, because the laws that get passed apply to them.

So for you it's the same than being paid by a private corporation?

Yes

No, and neither should people on federal payroll.

This last year when filing my taxes with a paid turbotax product some value was auto-filled and looked about right. After submission I was notified that the IRS rejected my form because the field was wrong. They did not correct the field or otherwise communicate what they believed the value should have been. Tracking down what number they actually wanted there was a hassle. So... they have on file what they expect your taxes to be, will reject your filing if you get it wrong... but won't just use their gathered values to do your taxes. Very frustrating.

Well, they can; that's the service the article is discussing?

They could. They just want you to confess the things that are harder for them to track. So they pretend they know more than they do.

"Less than two hours" does sound like a lot. I'm also in Canada and spend about 10 minutes per year on my Canadian taxes.

Settling with the US government as an expat, on the other hand... I pay handomely for somebody to handle that.

I have a bunch of USD-denominated stuff for which my brokerage doesn’t always issue complete tax slips for, so it required going over my statements to double check that everything was being accounted correctly.

My wife’s (uncomplicated) taxes basically took 15 minutes. You do always want to check to make sure that you’ve hit every tax deduction you can - for example, work-from-home deductions, donation deductions, even things like paying for news subscriptions gets a tax credit. That’s the sort of thing that doesn’t get reported to the CRA, but which you can claim tax deductions on.

My C-corp taxes took about half an hour with turbo tax (just software development contracting).

It really puzzles me what is so complicated about filing taxes as someone who only has employment income.

Due to a similar approach to privacy, I use GenuTax, which is a Windows program not a website, and does not send anything anywhere except to the tax authority. Not everyone cares about this aspect of privacy and security, but for those who do, there are options, both free (GenuTax) and paid (StudioTax, etc.).

that’s how free file works in the us….

That's why I use one of the free options. Both GenuTax and WealthsimpleTax are free to use and user-friendly, albeit in different ways. What extra thing does UFile do to justify its price?

I wouldn’t describe it as hidden. It’s a pretty straightforward form of income distribution. Compared to most government programs for the poor, it’s refreshingly simple.

If you ever work with poor families to help them navigate the government resources available to them, you develop a strong appreciation for the EITC as opposed to, say, SNAP (food stamps)

>why does EITC exist?

To relieve the regressive payroll tax (FICA) on low-income families.

I don't think EITC is hidden? It's just a subsidy for families.

Your income is not considered private information.

One can argue whether this is desirable, but there's basically no way to enforce income taxes if the government is not aware of how much people earn.

Hilarious that the government makes some of us think that portion of someone's money returned to that person is a "welfare payment"

Pretty easy, assuming 2 kids filing jointly. Standard deduction is $29,200, so effectively only $30k of taxable income. Of that, 23k is taxed at 10%, 7k @ 12%, or $3.14k/10.5% effective.

Then $1.6k/kid gets subtracted due to the Child Tax Credit, for a net -$700 in taxes paid.

Keep in mind the cost of living in the USA is higher than many other countries. 60k for a family of four is doable in most places, but it is not a life of luxury.

edit: the family will also end up paying 7.65%/$4.6k in a separate tax for a mandatory retirement scheme (FICA)

Where do you live? In the US federal taxes are capped if you’re below the standard deduction. You still have to pay social security and medicare taxes but those are about 6%. Some states have an income tax but most do not. Do you live somewhere where there is an income tax?

Yes. If you and your spouse both make minimum wage and not a cent more, and you have two children or more, you can come out about even. How many two child families do you know with both parents earning absolute minimum wage?

There's been a free e-file since 2009 according to archive.org. Looks like this was the selection of forms at the time:

https://web.archive.org/web/20090418011703/http://www.irs.go...

I've used it for years. It's just the paper forms with some auto-calculation built in. I've never had a company do my taxes for me so it's a little hard for me to even imagine the value-add for simple taxes. Presumably they ask for the same information that's on the form.

I imagine Intuit is still ripping us off behind the scenes even if it's free at point of use, but maybe they don't get a good deal and are happy to do it free/cheap as long as they can make it have a scary enough UX to get you to pay them instead.

The IRS is not 'cozy' with Intuit, HRB, etc. The IRS is underfunded by political design. All of this crap is the fault of corporate lobbyists and the politicians who take their money.

I think that was a bit oversimplified, the Free File program was problematic in a lot of ways, but it's not like the US government was just sitting on their own free file system that was locked behind a vault. They had to actually make the thing and it was never a given that they'd be able to do it. When the private companies said they'd offer their services for free to prevent the government from taking on the expense and hassle, it was sensible trade off. When the tax prep industry got greedy and overplayed their hand, they got bitten and are now in deep trouble.

I switched from TurboTax to FreeTaxUSA this year and it was almost exactly the same (in some ways easier). The amount owed was identical. The IRS doesn't lose submissions and provides a very clear system for tracking the status of eFiled taxes.

TurboTax just submits your data to the IRS. There's no change in the potential for the IRS to lose your data.

Gotta be honest, the "government is unreliable" crowd are not people I think of as honest. Government works fine, and for less money, if you actually try to make it work.

Currently Turbotax is electronically submitting the government and you're okay with that, but you think that if you electronically submitted to the government in a system specifically designed by the government for the government that it would be a higher likelihood of the submission getting lost? The system with using the government is only removing one of the independent pieces here. How can you not conclude that the likelihood of problems wouldn't decrease?

I hated giving my money to Intuit so they could lobby for our complicated and unnecessary tax filing system.

I qualified for using the IRS free option this year and I'm so happy and I hope I never go back.

I assume TT is doing the same efile process that any other program does. My CPA even uses efile.