They charge $14.99 for the state filing. Usually a coupon code available. Or go to the state's website (CA at least), and file that for free, too. But for the convenience of not having to input my info again, I'll pay their fee.
Relative of a TaxHawk employee here. I'd be happy to pass along any bugs or issues since they probably don't have any employees on HN.
Also, supporting TaxHawk means supporting a company that cares about their employees. They have done so many things for my relative that it makes me jealous. They have also kept raising wages ahead of inflation.
Yeah. When you start your own business, that should be when you talk to an accountant. Well, maybe as soon as you think you'll make enough money to pay taxes. It saves you a world of heartache.
If you held it for over year. Otherwise it's income of sale price - cost basis. Don't know about fees. I'm not an accountant, but I do know you have to hold an asset for at least 1 yr to count it as capital gains.
> I do know you have to hold an asset for at least 1 yr to count it as capital gains.
That is not true. Perhaps what you mean is that capital gains on assets held less than a year are taxed at a different rate than capital gains on assets held longer than a year?
Don't mean to get pedantic but I didn't want someone to read your comment and think that they owe no taxes on short-term capital gains. (What a crazy tax incentive that would be!)
I have used Taxes For Expats for years and have been satisfied with their software and level of service, however for my particular case they cost several hundred dollars per return.
Why is custom software necessary at all? In the Philippines, if you are registered with eFPS, and have an account in one of the accredited banks, nothing is needed except a web browser.
Makes sense. I used to prepare taxes so I appreciate the value of human insight there. I also have contempt for the industry because so few practitioners will teach easy cases to fish, or refrain from optimizing a return when the cost of prep exceeds the amount saved. (Not saying your situation is easy; it’s not.) Plus I do think it’s time the IRS stepped up automation for simple returns.
If you file a complicated tax return and the "prepared by" line is not a CPA, you get targeted as someone who probably did something wrong. The IRS is more likely to go for you.
Sorry I assumed my question implied that was what was being asked. What is the complexity because I’ve done my own taxes for two decades, every year things are nuanced and slightly different. Never have I used an accountant.
I send my bank statements, credit card bills and other documents to my accountant. He produces a return, together with optimisation advice for the coming year. It’s well worth the money. (I also have real estate, private equity, fund interests and emerging trust situations, and am multi-state.)
1. You don't have to figure out which forms to file by yourself. This quickly becomes non-trivial if you run a business, take a lot of deductions, or have weird forms of income.
2. The IRS sees that your return was prepared by a professional, so it is much less likely that they will try for an audit (since a professional will be representing you).
If your tax liability is under $100k and your return is under ~20 pages, you mostly don't need one, but an accountant also doesn't charge much either (about the same price as TurboTax).
I value my time. Learning the details of totalization agreements regarding ss contributions vs public retirement contributions for US vs. Ireland is not how I want to spend it.
It's pretty complex actually. There are multiple ways to avoid double taxation, but each have their own nuances and limitations (that can extend for years). Ideally you'd complete the return for each scenario and compare across them.
FreeTaxUSA can be confusing though. It makes it quite unclear what is contributing to what portion of your tax bill. I like it better than the other more popular, mainstream options, but its usability isn't great. I never have full confidence I'm paying the correct amount or getting the correct amount as a refund.
Well IRS Free File isn’t one single service. It’s a coalition of private tax prep services that have agreed with the IRS to provide their software for free to taxpayers meeting certain constraints. The insight into how your liabilities stack up certainly varies by product (I found TaxAct did this quite well, but I’ve stopped using them and started filing out the forms directly since I no longer qualify for the free file program).
My relative has had to do UX work, and at least to me, it sounds like they care about it. But my relative also talks about how they're not the best at it.
So can you explain in more detail what you are wanting? Do you want some sort of way to see a line item list of what the tax bill is?
I have a big problem with FreeTaxUsa... I don't want my tax return data on their server. I want to have something I can run on my own computer.
(and it really bothers me that taxhawk.com and freetaxusa.com are mimics of each other... why have two sites with different branding that are under the cover the same thing?)
The two sites are targeting different kinds of people. That's why they exist. They are the same (and same company) because in the end, everyone has to go through the same processes for taxes.
As for keeping the tax return data on their server, it's for convenience and possibly for other reasons. My relative believes that, for legal reasons, FreeTaxUSA is considered a "tax preparer" and needs to keep those records.
+1. I find them to be the least-bad option. They have all the forms I need even for a moderately complicated tax situation. They're cheap. And most importantly they aren't one of the evil companies lobbying for more complicated tax code (Intuit and H&R Block) .
> They charge $14.99 for the state filing. Usually a coupon code available. Or go to the state's website (CA at least), and file that for free, too. But for the convenience of not having to input my info again, I'll pay their fee.
Some states don't offer a free-file option. My memory, which is at least a few years out of date, is that MI doesn't.
IIRC, Freetaxusa will walk you through the state taxes and if you look through the UI, you can see the MI forms that it filled out. At that point, you could copy their forms to your own and mail them in yourself, but I've always paid the $15 to have them file it because I feel they've earned it.
> IIRC, Freetaxusa will walk you through the state taxes and if you look through the UI, you can see the MI forms that it filled out. At that point, you could copy their forms to your own and mail them in yourself, but I've always paid the $15 to have them file it because I feel they've earned it.
My problem has never been with the filling out the forms—my situation isn't complicated enough for that to be difficult, especially compared with the federal forms; it's with the filing. I just get so annoyed at the refusal of these agencies (like MI's, at least back when I incurred taxes there) to accept something that is surely more convenient for them and for me both, namely for me to file electronically. What do they gain by requiring me to print out and mail them a paper document that they then have to open and scan?
I've been using https://TaxFreeUSA.com for the past 5 years, and it's great. Just as intuitive as TurboTax, but totally free for federal (you pay for state, but I lived in WA until this year so it was totally free). Also, I sleep better at night knowing I'm not giving money to Intuit who is the largest lobbyist that keeps tax codes complex.
The tax code is kept complicated in order to make carve outs for special interest groups. Intuit has no way of influencing real estate, trust, investment, alimony, disability, etc. tax regulations. Intuit profits from a complicated tax code but it’s not like their lobbying is what makes the estate and inheritance tax code complicated.
They surely want to make filing as complicated as possible so they can streamline it for you. Intuit surely lobbies to prevent the IRS from advertising free tax filing options. I’m sure they would like the forms to be as arcane as possible but I don’t think that congress has anything to do with the layout of the forms and worksheets.
How is “keep tax codes complex” not equivalent to “prevent the IRS from making it simpler”?
Besides that, you’re definitely wrong. They do lobby to keep it complicated and actively try to confuse customers into thinking they need to pay more for no legitimate reason at all.
Intuit causes great harm and so does anyone that works for them.
If keeping tax codes complex was the same concept as keeping the process of electronic filing complex, what would be the point anyone buying Intuit software to do it? By your logic, it would still be just as complex anyway.
Right, it's possible for the tax code to be complex but still present a simple user interface. That means that it would, hypothetically, be possible for the e-file process to include a simple user interface (using, as you say... software).
If you chase up the comment chain you replied to, you're really agreeing with me using a tone of disagreement. sockaddr says that filing has to be complex because tax codes are complex. We both disagree with that.
Any idea how well it might or might not work for more complex situations like rental depreciation? I'd like to stop giving my money to TurboTax/Intuit.
They have a question search [1]. When I searched for "rental depreciation," it showed [2]. The first result dropdown had this:
> Rental Depreciation:
> Menu Path: Income > Business Income > Rental Income (Schedule E)
> Enter on the Depreciable Assets screen. If you are filing a Schedule C, then that screen will be within the Business Income (Schedule C) screens. If you are filing a Schedule F, it will be within the Farm Income (Schedule F) screens. If you are filing a Schedule E, it will be within the Rental Income (Schedule E) screens.
Self Assessment is definitely not "20-30 minutes".
Anyway what's crazy is that we have to do this at all. In normal countries the government calculates the tax you owe based on information filed by your employer, bank etc, and then sends you the bill. If you agree with it, you pay that. You are required to do no work at all unless you want to dispute the bill.
You'd have to ask how they do this in one of the European countries that has this kind of system. I suppose for rent you might need to register the rental (not a bad idea for landlords to be registered), and for the heat pump perhaps the installer would claim the discount. As I don't live in one of those countries, I don't know exactly how it works.
The craziest part is that the IRS verifies this information against their records and will investigate you if things don't match up. If there's a source of truth each citizen's submission must align with, why not just use that to begin with and investigate people whose assets/deposits exceed their expected income?
To cover the breadth of US tax law, including provisions that impact large swaths of ordinary Americans, the IRS would have to collect a lot more data than they do today.
More than likely this would be politically infeasible: Look at the uproar over their (now deferred) attempt to collect information on relatively low-dollar Venmo accounts.
The number of people that it would work for would easily justify the cost of the IRS sending out prepared taxes.
That some small sliver of people have complicated taxes or want to itemize their expenses is not a good reason to complicate the activity for the majority that have straightforward taxes.
And then if you want to simplify, just eliminate deductions altogether (and shift brackets to compensate). Eliminating top bracket income for the mortgage interest on a huge house is pretty regressive, for example.
That’s my point: Americans spend a ton of time doing their taxes because taxes are complicated, not because the IRS doesn’t pre-transcribe their W-2. If all you need is the 1040-EZ, you can do that in 20 minutes.
If all you need is the 1040-ez (as most people do) then it's trivial to automate with records that the IRS already has. Then you're given the opportunity to review and correct your automatic taxes like other countries already do.
This is already what happens, except you're paying a third party for the privilege of copy/pasting some fields from one form to another.
America isn't unique and special, solutions to problems in other countries aren't magically impossible here. The reason you think this is because you've been tricked into thinking our tax code is complex by necessity.
In reality, things are only this bad because TurboTax and other tax preparing companies have lobbied for more complex tax codes and less access to free automated filing.
If an independent company can produce software to file your taxes and charge you $150 for it, there's absolutely no reason the IRS can't do the same thing for free.
Right, the point is that we can and should get that down to 5 minutes. It's just stupid lobbying and weird ideology to insist that the IRS stay out of the preparation business.
And then once they start doing it, they can probably figure out how to do it for a larger and larger percentage of people over time (and the tax code can be adjusted to make it work better in cases where it makes sense).
I think you’re unintentionally making the weird ideologues’ point for them: The burden of taxes isn’t the 5, 10, 20, 200 minutes you spend preparing them, the burden is the taxes.
Getting excited about saving taxpayers 15 minutes, and trading off $thousands of deductions for a few more minutes, suggests that you’re optimizing for obscuring the primary burden (the cost of government) rather than reducing it.
It’s the weird ideologues who typically want an extremely simple system. But it’s very hard to make such a system as progressive as what we have today without reintroducing complexity.
Why would people trade off deductions? I'm pretty sure that the serious proposals for IRS preparation are for them to pre-fill what they have and are open to the filer amending that or preparing their own return. We should anyway eliminate exemptions and deductions and shift the brackets to compensate.
It's also sort of silly to go on about making sure that people understand the "burden", when government should obviously be restricting itself to things that are a net benefit to society. Of course there will be disagreements about the value of a given activity or service, but the notion that government must be a burden is pretty backwards.
It is both the time and the taxes that are a burden. And there's always gonna be some people out there keeping track of all the dumb shit we are being taxed for but not changing it, just like today.
it isn't only itemizing for general deduction. there are a LOT of people who claim other tax incentives outside of that. I have claimed something almost every year in the past 15 years. and almost every friend I have does the same. if you are self employed or have a home, it is super common to claim items on taxes that the IRS doesn't know about currently.
but yes, they should just eliminate all deductions and shift how much you are taxed to compensate
Most years, everything on my taxes is based on a form some financial institution sent me. Investments info, mortgage info, salary info, 401k/IRA info, charitable contributions.
Why is all this being sent to me and not the IRS?
If it is also being sent to the IRS, why isn’t the IRS sending me a pre-filled “return” that I can simply send back with a “Agree” checked?
Yes, there are years I have things that are unexpected/unusual. I’m happy to add that stuff to the above pre-filled form and submit it. But it’s absolutely infuriating that every April I have to spend a day sorting through a pile of paperwork and stress about whether or not I’ve forgotten something or gotten something wrong (or, these days, pay a CPA to do it for me, even thought there’s absolutely nothing unusual about my tax situation).
Same in Norway only it's even simpler. They send you a text saying your proposed tax return is ready. If you check it and agree you need do nothing at all. Otherwise one corrects the input figures and perhaps adds a little that they don't have direct access to such as overseas investments and property. All online and the system instantly recalculates the tax due. No need to claim any tax relief, it does it for you.
I don't think the government should even allow your employer to automate the payroll deductions. If every family in the country got hundreds of dollars more in their take-home pay and had to write a check to the government like they write a check for their mortgage, it would allow (force?) citizens to really consider the value they get for their money.
This is a terrible idea because people are generally horrible with money. No automatic deductions means that you personally have to estimate and save up for your tax bill at the end of the year. You have to be able to set aside several thousand dollars and not touch it ever.
A lot of those people would spend that money instead, and then be unable to pay their taxes at the end of the year. This results in people borrowing money to pay taxes, which is really just an opportunity for lenders to take advantage of people.
Consider automatic deductions as deposits into an account you can't see or touch and is only accessible for taxes. That's pretty much exactly what most people would need to save for their taxes in the first place. Once your taxes are withdrawn from that account, you are refunded the difference.
The idea that many people would wind up spending the money and not paying taxes is a feature, not a bug. Adding friction on tax collection and enforcement is the goal.
I already told you in my first post. Payroll deductions are a psychological manipulation used against the public to separate payment from the perception of value. People don't "feel" paying their taxes every two weeks, and therefore are less able to consider the return on that value. Seeing money come into your account and then leaving is a very different emotional experience than less money coming in to begin with.
While the Tax Compliance scam is something that needs to be addressed, I am also not a fan of completely automated and "easy" taxation. I think government taking our money should be painful, and in your face.
I am not even a fan of automated payroll deduction for this reason, people should experience having the money removed from them every month, week, what ever just like any other bill they have to pay.
This psychologically is a check on government overspending as if people were paying 25+% of their income, as a bill payment every month to their government they would be more prone to ask why, instead of what many do today which is just look at their net income and treat the refund as a savings plan or even worse the government "giving" them money
We have made it entirely tooooooo easy for governments to take money from us
I'm the opposite. I think we Americans have made it entirely too easy for corporations, accountants, and lawyers to swindle money from us. And I'm only referring to instances involving government taxes!
I don't need this pain and nonsense every year. I'd rather be enjoying the one life I have.
Former head of IT at a tax authority of a small EU nation here. We get 95+ percent of online filing for private income tax (and have for 20 years), of course there is no fee, and you can have your refund on your account in a few hours. The whole process takes around 30 seconds. AMA.
I would rather not pay the people that are lobbying Congress to prevent the IRS from making it easier to file tax returns. If all you have is W-2 and 1099 income, it is pretty easy anyway. Might take a few hours to read instructions one year, but all the subsequent years are pretty quick.
> […] but also paying having your data both sold and eventually also breached?
Based on the emails I’ve received from six companies across six different industries in the last six weeks, this is apparently the end state for every commercial interaction I’ll have.
Not that it makes it OK by any stretch of the imagination.
It is illegal for a tax preparer to share your tax data without consent. I have certainly used tax software in the past that asked for this consent, though.
You can download the software (TurboTax, H&R Block, maybe others) and run it on your own machine and eFile on IRS directly. The data never has to leave your computer.
I'm guessing tax preparation companies don't make a lot of money off those filers anyways. But if you start taking away the more expensive customers, i.e. the business owners, investors, etc... then it becomes a problem. Lobbying basically.
When I worked in Brooklyn they would setup sidewalk booths. Walk up with your w2 and someone would take a picture with an iPad. They would confirm the details and leave. It’s amazing how many people showed up for that.
I assume Intuit and their ilk lobbied for the limit. I recall reading that the IRS was developing a way to automatically do most people’s taxes, but the tax preparation companies lobbied Congress to stop that, and instead offered their services for free…with the caveat that higher income filers are excluded.
& that free service was offered only through a special link from IRS page. TurboTax intentionally named products like Turbo Tax Free yo confuse users with actual IRS page linked to Turbo Tax Free File.
The cherry (or pepper) on top, after certain years (in 2022), the discontinued that option, & progress by IRS for automated taxes were already lost.
Making it automatic is a step in the wrong direction. They need it heavily simplified or even entirely removed. Then they should worry about automation.
I tried the fillable forms in previous years. They certainly aren’t easy and don’t make you confident you are filing an accurate form. Paying $50-100 to save a few hours and a lot of worrying is well worth it to me, even if along the way I bemoan the complexity and inaccessibility of the current tax system.
I'm not going to claim they are easy, but they are accurate (they have a Do The Math calculation button). Even if you mess up, the IRS will typically send you a response noting where their calculations diverged from yours and offer to automatically adjust. (Which denotes the absurdity of this exercise for most taxpayers because the IRS already has all the information it needs to complete your taxes).
They actually don't have all the information they need in every case, as not everything is reported to the IRS. But yeah, they already have the majority of information, particularly the most impactful information, and for the majority of people, all of the information that they need.
Anyhow, I'd imagine in any case it is still useful as a way to validate information.
Wonder what the minimum information you could put in, and how accurate it'd have to be, to get that response. It'd be cool if you could lifehack your way into getting the IRS to do your taxes just by sending something obviously wrong that they'd autocorrect into the final product! Then we'd be roughly on parity with more sane countries that just send you a tax bill.
IRS is very understanding, but I wouldn't suggest this. I have gotten plenty of letters from the IRS and they are always stressful.
The IRS has always responded in a really positive way, so it is really worth talking to them (well, unless you think you may be in real legal trouble... I guess "don't talk to the cops" applies here too...) if you're in the situation where you think "oh, yeah I messed up" or "oh, yeah they messed up" it's probably best to just reply... but yeah if you think it is serious talk to a tax attorney... (not an accountant, which isn't a tax attorney).
The "they messed up" for me was a crypto thing, where I actually took a small net loss, and didn't file (because you don't need to, for capital losses, from my understanding, though I guess you should) and they thought I took some insane gain b/c of the $ value of the trades.
I just mailed them the trades, said "I didn't submit the form for this b/c I didn't think I needed to for a loss" and they said "yay, thanks, see ya" a bit later. Positive experience.
Well, one way to answer the minimum is, one has to report every 0.49 dollars of income, even if the bank who paid did not report it to IRS.
Agree, most countries (including India) simply opens their portals, you sign in, check all numbers, report anything missing like income or deduction, and press the final Enter.
Yah you have to be confident of the values you’re plugging in. Do the math is for the simple in-form formulae. Some of the raw data you put in comes from worksheets etc you fill out on your own. You may benefit from a gist I’ve kept around with some tax urls for free tools out there https://gist.github.com/jxramos/08ea6af443dae5a251f0a5b21ee5...
Yup. I suppose they can use the cell phone tracking to figure how many miles you’ve put on your personal vehicle and use AI to figure out how many were business use miles. /s
In reality only if you take standard deductions and only get paid with a W-2 can they actually figure it out. But I agree that overall the process is messed up.
Not for the >>50% of people who they know. The IRS just mails you their projection and you can amend it if necessary. It clearly is less work for the citizenry.
Even if you screw it up the IRS will just charge you interest “penalties” or give you your money back if you overpay (both have happened to me). I’ve straight up forgotten forms and paid maybe a few extra dollars in interest, I wouldn’t even call it a penalty.
People are generally way more afraid of the IRS than they should be. People that hate the IRS for being unreasonable are very likely aggressively reporting deductions or whatever, not just making typos on their freefillableforms.com return.
I’m guessing the vast majority of people that hate the IRS don’t have any reason based on personal experience. They are people that believe things like “The IRS is hiring 87,000 new armed enforcement agents”.
Or people like my stepdad’s cousin who took ten years to get the money back that they paid (because of a mistake on the IRS’s part due to having the same name but different SSN as a tax dodger) so they didn’t get their assets/house seized.
This was before the kinder, gentler IRS but still.
I lived in Australia for a time and the taxes were a breeze. Enter a few identifiers like tax id number, it fetches the data from the government, confirm the data, done in 15 minutes. I couldn't believe it.
Taxes and health care in America are just so broken.
I think this is relatively new. 10 or so years ago you still had to download a desktop app that looked like it was written in 1995 and go through each page.
The desktop app I’m thinking of was called “e-Tax”. More recently you could complete your return through the MyGov website with all data pre-populated. Perhaps there was a transition period where they were still using e-Tax but also could pre-populate the data. But before that, you still had to fill it all in from paper forms.
It’s a while since I’ve had to complete an Australian tax return.
Moreover, just a few years ago I was in a position where none of the free services I tried would allow me to report a specific form of taxable income I received (a stipend paid by a university in the form of a reimbursement that wasn't reported as W-2). I literally spent 12+ hours on my otherwise very basic taxes just trying to navigate the interfaces for the "free" services.
I ended up switching to the fillable forms after that; lo and behold it turns out it's a tiny adjustment to one line on the 1040 and is clearly explained in the instructions. If your taxes don't change much from year to year it's trivial to work out the form each year. Like you it's always taken me about 30 minutes after gathering the various forms together.
I’m so glad someone else pointed this particular case out! When I was a first year university student but still claimed as a dependent on my parents taxes, the accountant who prepared the returns wasn’t even aware that it needed to be reported, so they had to redo it. Later when I was doing taxes for myself via TaxAct, there was no way (that I could see) to accurately report that income. It also stumbled on HSA contribution limits. Both issues were easily resolved with the free fillable forms (which come with detailed, if overwhelming, instructions)
That seems odd they don't have it in a Google Sheet, which I initially thought it was because of speed reading the hostname, sites.google.com. I don't have Excel.
Looks like IRS Free File Fillable Forms isn't yet available for 2022 Tax Year returns.
Also looks like that's the only IRS e-File option for AGI over $73K that doesn't involve using a commercial software/service (which I assume will probably sell user's financial data, and then also let it get breached).
That's my assumption too. There's no reason why the IRS can't create something that walks people through their own rules. Their list of "providers" is always filled with the most sketchiest sounding companies. ezTaxReturn.com FileYourTaxes.com 1040now.net and TaxSlayer.com sound like scam domains you'd see in a phishing email or a late night TV ad.
People shouldn't have to surrender their data to third parties just to have a website walk them through their taxes.
Just to be clear, Free File Fillable Forms is not run by the IRS, but by a private-sector vendor that is part of the Free File Alliance. I believe it's been run by Intuit and H&R Block at various points, but the current provider seems to be one I hadn't heard of (OnLine Taxes). I don't know the full chain of events and obligations, but my understanding is that there's an agreement in place that the IRS will not provide an in-house e-filing solution for individuals as long as the Free File Alliance continues to provide the Free File program (including Fillable Forms).
"The Department of Justice announced today that it is requiring Intuit Inc. and Credit Karma Inc. (Credit Karma) to divest Credit Karma’s tax business, Credit Karma Tax, to Square Inc. in order for Intuit, the creator of TurboTax, to proceed with its $7.1 billion acquisition of Credit Karma."
That used to be the original Credit Karma (the tax filing side). I liked them when they didn't require a mobile app to use their service. At least it helped me discover FreeTaxUSA.
Original Credit Karma was nice, but they went overboard with geolocation: didn't allow to log in into my US account while in Canada, so had to stop using them.
Every year filling my taxes reminds me how lobbyists representing firms like Intuit (TurboTax) have gone out of their way to make tax filing a free service of the IRS. I don’t know why we allow this to continue in the US.
>I don’t know why we allow this to continue in the US.
It makes me wonder who "we" are in terms of controlling policy and direction in the country. It also makes me wonder what the motives are of the "we" if it's really inclusive of your typical voter and not a small subset of self-interested parties, many of which may not even be people.
Call me crazy but I think it's a bad idea to do your taxes this early. I've gotten so many amended forms over the years that eat up so much time filing amended returns that I wait until the last minute now.
Now that I think about it that’s probably what a phone call I recently received because I “signed up for increased life insurance” was all about.
Dude insisted I was the one who initiated the contact and probably expected me to give personal information to correct the “mistake” or, at the very least, to figure out who is plotting my death.
Guess I’m getting old enough that the scammers think I’m an easy mark.
It is so easy to avoid this by simply opting in to the IP PIN (identity protection) from IRS, then no one else can successfully file a return under your name.
This is probably not quite the right time of year for this post. I see:
Fillable Forms is closed for the year
November 17 was the last day to access accounts, make changes, print or resubmit a rejected return. After November 17, 2022, you will not have access to your Free File Fillable Forms account and your 2021 federal tax return.
I would suspect that it will open in this next month or so. Does anybody use free file (https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...)? If so, what do they think of it? Why is it better than just sending postal mail (which one has always been able to file for free)? From a security point of view, is it better to send postal mail or have to worry about hackers and filing over the net?
Also, note that there is open source software that might work for some people (depends on state and forms needed)? I found:
The IRS is not actually a godly being that has omniscient knowledge of every transaction that ever goes on and in the future.
How is the IRS supposed to figure out how much money to take away from your W2 when you could get a billion dollar windfall at the end of the year and massively change tax bracket?
> The IRS is not actually a godly being that has omniscient knowledge of every transaction that ever goes on and in the future.
For the majority of people they have complete knowledge of everything you are going to report. If you don't believe this its easy to test: file your taxes with omissions and see how quickly they contact you to let you know you messed up.
There should absolutely be an option where you just tell the IRS to figure it out based on electronic reports that are already being reported to them from your employer's payroll system and other sources and have it just show you a summary that you checkmark (or override if you're one of the minority that has an exceptional case).
This is basically what things like TurboTax do for most people, most users rarely enter much of anything, the data is pulled from databases that have the same data that was already forwarded to the IRS. But of course there's a fairly substantial price for this 'convenience' when it should be built into the federal tax system and free for everyone to use as it is in some other countries.
What's stopping this from being the norm isn't the small percentage of exceptional cases but rather lobbying from Intuit, etc.
By following the model that Spain and other countries follow: take the information they know (which is basically everything since anything meaningful is reported), calculate it, send you what they think you owe, and you either pay it as is or you file taxes manually.
If you have a standard 1 job W2, that is... literally what already happens, except even with less steps, since they already took the money out of my paycheck.
The 1 job W2 literally takes 15 minutes to fill out if so, and it is pretty much signing off that you didn't make a million dollars on the side that the IRS doesn't know about.
Except in the US you still have to file your taxes. They might be the simplest to do, but you still have to. Which typically means people end up using turbotax etc, and paying for the product.
Spain's equivalent is basically 'we know you have a kid and this income so here you so. just sign on the dotted line'
In the US you do not need to file if you are confident you don’t owe the IRS money, or if they owe you money and you don’t want the hassle to get it back. If you are able to setup withholdings to exactly match what you owe there is no reason to file. I have skipped filing a few times.
Considering they basically do this for the simplest tax forms: why are we supposed to assume Spain has a better system again? Is this just the typical “European = better” stance so prevalent online?
> Is this just the typical “European = better” stance so prevalent online?
Yes and is often the case, fully justified.
When it's the time to file taxes, you go to a government website that tells you all it knows about you - inheritances, donations, salaries, etc etc. You can add stuff if you want (e.g. special deductions), but for most people it's a matter of next next OK Finished. On a government website everyone knows (that send you a letter/email to remind you it's time), for free, and works for everyone regardless of complexity. Contrast that with the US where tou have to provide all the information yourself, but first you have to find filing software that you sometimes have to pay for (either because of your situation or because you were tricked by dark patterns).
It's honestly weird. Nobody likes taxes, that's why they should be as easy as possible to file and pay. The American model of adding middlemen for their benefit is going directly against that for no good reason.
While tax filing in the US might be more Byzantine, I’m happy with the trade off of paying lower taxes, relative to most countries with such streamlined taxes.
Put differently, if I’m paying very high tax rates, of course I’ll be doubly pissed off if it is also arduous to file.
The tax rates are comparable between the US and many EU countries, all things included. Yes, your sales tax is much lower than the usual 20% (for some things, often lower for essentials) VAT; your income tax might be lower in some cases, but when most people in the EU talk about "taxes" and "tax rates", healthcare plan costs are included in that, as well as pensions. When Americans talk about "taxes" and "tax rates", your premiums, deductibles and etc. aren't, and it's up to each individual to save money for retirement. According to some online sources the median tax rate is comparable between the the US and the OECD median for Europe.
And you also have non-insignificant property taxes.
A windfall doesn't change the tax brackets for what you made in your W2 though. Each bracket is fixed for various ranges of your income. The windfall in your example would be in it's own tax bracket unaffecting everything before it. And I'm pretty sure the windfall would be reported to them too. So yeah, they would already know. Your example isn't accurate.
Not every source of income for folks is from a W2 payroll. Lots of 1099 stuff out there and other complexities people can get involved in. It’s interesting the complexity of the tax law imposes that complexity on everyone just about.
Jobs. With all the extra paperwork, we can create "jobs" and pay ourselves on the back. I agree, i've already paid my taxes why am I spending time/money to get my own money back?
Considering the IRS doesn't even have access to things like cost-basis for capital gains, no way I'd trust them to complete it correctly. They'll likely just assume best case scenario for them (and worst for you).
That hasn't been the case for me. I end up owing come tax time every year, and yet every time, after having paid what is owed, months later they give me a small refund anyways. Now I know where I can save money on my taxes, and I've done it before, but it's the savings are so small that it's not even worth the time doing. Yet, it's about what they give me in the refund. Why didn't they just keep it, especially given it's such a small amount?
It doesn't matter, as it's not evidence for them choosing the "best case scenario" for themselves. The best case would of been them just keeping an overpayment, and never refunding me anything. And besides, I have double checked the calculations before, and it's basically what they gave me (minus rounding cents to nearest dollar in each calculation).
Not an American so I probably should not complain. But when I opened the page out of curiosity for the first time, I found many terms that require explanations, such as what is AGI?
The "What Is IRS Free File?" section below it explained most of my questions, so I think the "What Is IRS Free File?" section should exchange it place with the "Choose from IRS Free File" section. This allows the reader to have a clearer mind when preforming the filing process.
Just my two cents.
I wouldn't take the matter lightly though, because based on my understanding and what I've learned from the movie Everything Everywhere All At Once, IRS tax filing is a serious manner thus the tools designed to do that should be more user-friendly. I don't think getting kungfu-attacked by the IRS lady is enjoyable for any American (as well as going to jail/getting fined for misfiling).
The "What Is IRS Free File?" section below it explained most of my questions, so I think the "What Is IRS Free File?" section should exchange it place with the "Choose from IRS Free File" section. This allows the reader to have a clearer mind when preforming the filing process.
Most Americans have been painfully aware that we have been unable to file online directly with the IRS and searching for a free file software is a giant nuisance. Given that the user base will be mostly Americans, I imagine it's probably fine.
Every year I ask, and every year I'm disappointed, but does any good solution exist for expats? I know I shouldn't be paying taxes, since I earn under the exception limit. But I don't know all the forms I should fill out, and all of the websites dedicated to expats are expensive, almost $500.
What exception? If you are a citizen and intend on returning to the US (or even intend to renounce) you should be in good standing with the IRS (FBARs and annual filings). You owe the difference between locally paid taxes and federal taxes, and can claim overpayment as tax credits.
Most low-earners don't bother with this and use the Foreign Earned Income Exclusion Act [1]. Don't forget about FBARs if you have more than 10k across foreign banks accounts.
Sorry, I meant exemption not exception. I was referring to the foreign earned income exclusion act. I never have to pay US taxes due to that, however I still have to file. Since I don't know the tax law, and I would hate to be on the bad side of the IRS, I hire a CPA every year. I am hoping that this year I may find a site that supports foreign citizens.
Remember H&R Block, TurboTax, etc have all been caught tricking people into paying for free services, so watch out when using them if you are expecting free filing.
Of course, this doesn't change the US Tax code being intentionally designed to be easy to make errors that can lead to significant fines.
I've been using TT for decades. Their "tricks" are basically asking you 2 or three times during the process if you want to pay for a new feature. Pretty lame for tricks. But annoying still.
Also: just be rich. They don't investigate non-billionaires. Jeez.
ProPublica reported extensively on the deceptive tactics they actually use, such as marketing paid services as free, and making the actually free filing site hidden from search engines.
Eventually they ended their participation in the IRS’s free filing program after all 50 states sued them for $141M for scamming the lowest income tax payers into paying unnecessarily.
This is a good step. Now they need to trash that idea of having electronic payment companies send out a 1099K for anyone with $600/yr of online payments (PayPal, Venmo, etc.). I know they put the idea on hold because of backlash, but they need to dump it entirely. It will only generate $8B in tax revenue over the next 10 years ($800M/yr) but will cause a huge number of people to pay taxes they don't owe when they sell used crap on eBay, CraigsList, etc. The electronic payment companies don't know whether these payments are business-related or personal.
But I think a lot of ordinary people selling stuff on eBay will get this form and think "I have to report this to the government as income." And in fact, what I read about it is that if it isn't all income, you write a note about it when you file your taxes. How many people are going to know to do that? Unless you have actually run a business or are doing $1M transactions, you probably won't understand that selling some used junk doesn't require paying taxes on the "income".
Relative of an employee of freetaxusa.com (TaxHawk).
My relative is one of the people working on Free File. If you have any issues, don't hesitate to contact me [1]. Free File is something they are deadly serious about because they know Intuit, TurboTax, et al are scummy, and well, it brings in business.
But Free File can be complicated (my relative complains about it a lot), so there may be issues. Please let me know.
Does freetaxusa support expats? I've been using a CPA since I couldn't find a website that was better. All of the websites offering to file, charge around $500.
There are two answers: state filing (which sometimes costs) and add-ons such as their "Deluxe" offering.
They make money by being much smaller than TurboTax and the others. Less people means less money spent. They do this by optimizing for the easy 80% use case and letting TurboTax et al take the hard 20%.
Good to know, I think I ended up paying for both of those offerings last year to support it. I think TurboTax that I had used previously was a little smoother, but I hate their shenanigans with preventing IRS free options, etc. But, it went fairly smoothly.
I did this last year, and it was a pain in the ass. I did it out of spite because HR Block tried to force me to pay exorbitant amounts for their advanced filing which I definitely didn't need.
If you do this, set aside an entire evening and expect to do only taxes. It isn't exactly hard, but the number of documents you need available can get large quickly. Instructions are confusing and there's a lot of cross-referencing.
It's very tedious, but totally approachable for most people, I think.
I've been using Free fillable forms for quite a few years without any issues. Up until the 2020 tax year, they also had state fillable forms which I also used to file state taxes. Unfortunately, they stopped supporting individual filings for state taxes, so that's no longer an option. I actually filed my state taxes by paper for the first time in many years because of that.
I think this is the year that I’m going to finally hire an accountant. I have been doing my own taxes aided by software for nearly my entire adult life, and my taxes are complex. I’m tired of giving my information to some company that’s going to do their best to sell it again somehow.
The funny thing is, I kind of like doing my taxes. Oh well
Use the IRS free fillable forms. It autofills information from one sheet to the next and is pretty easy to figure out after reading the PDF instructions for each IRS form. Makes way more sense then filling bubbles on a tax website that always seem to use inconsistent wording to the actual IRS form
Do any of the services (commercial or not) allow importing relevant prior years data from a different service? I would like freedom to easily switch, but don't know how to handle various carry-forwards from the prior returns.
Refreshingly, a Google search for “IRS Free File” returns this site as the top result and IRS sites for the top 4. This search used to be a haven for the scummiest ads too, and now it appears ad-free.
Cool...finally moving into the 20th century. Oh, but no filling for people in an s-corp? No filing for people with a good job? No state returns? Maybe next century..oh, no, wait....nvm.
> Submitting your most sensitive financial information into a cracked and pirated piece of software…
…is likely more security-conscious than doing it using the Official Licensed Software, given how valuable financial information is and how easy it is for a program that Officially Doesn't call home with it to send it all back home. As long as you're sufficiently thorough about the cracking, of course.
... that has no Internet access, and never will. I print the outputs and mail them. With the price of certified mail it would probably cost less to pay for software to e-file, however ...
In my estimation, one simply cannot trust proprietary software. They'll advertise trust and serving your interests on the front end, and then flip your information to the surveillance economy on the back end regardless. The more you try to avoid it, the more valuable your data becomes. Webapps have led the charge, but proprietary desktop software has the same dynamic now that Internet access can be taken for granted. Without a general privacy law like the GDPR, there is little downside to them doing this - the only risk is that they get caught by an independent researcher, and lose the few customers who notice and care enough. Essentially, since there is no political will for privacy regulation we're left with a low-trust relationship. And since I've got to spend effort protecting myself from the law of the information jungle, I might as well embrace it.
That company lobbies to make tax returns as miserable as they can, a bit like a protection racket. But stealing their product doesn't help -- it only relieves pressure to smack them down, or takes business away from their competitors.
TurboTax's "competitors" are part of the same protection racket. Taking away business from any/all of them is a win.
I do wish my approach were more scalable so that lots of people would do it. But for now I'll have to be content with personally not supporting the racket.
Because that's a physical item, and it can't be duplicated. It's not yours, and taking it deprives the owner of it, and gives it to you. Stealing can be applied to non-physical goods.
The argument that a digital copy doesn't remove it from the original owner. It's straight duplication.
I believe piracy can be stealing, but I've heard all thr arguments ad nasuem.
Why would I enter sensitive financial information into a website that isn't owned and operated by the government (to whom I'm sending information anyway)?
I don't want to use the internet for my taxes, so I do TurboTax locally and save that information in local files.
Accounting firms, large and small, are often reluctant to switch out of what they know, it's a huge hassle. It's still very common for firms to utilize installed tax preparation software.
Well I for one surely wouldn't enter my personal information into a likely surveillance vacuum! I install the desktop software, make sure it works, then kill Internet access to the VM and never enable it again.
For the wider market, I'd imagine there are a lot of people stuck in their patterns and discontinuing the product might make them look at other options.
They charge $14.99 for the state filing. Usually a coupon code available. Or go to the state's website (CA at least), and file that for free, too. But for the convenience of not having to input my info again, I'll pay their fee.