Why do Americans have to pay much to file their tax returns when the IRS knows?(marketwatch.com)
marketwatch.com
Why do Americans have to pay much to file their tax returns when the IRS knows?
https://www.marketwatch.com/story/the-irs-already-knows-how-much-tax-youll-owe-so-why-do-americans-have-to-pay-so-much-to-file-their-tax-returns-11643816470
22 comments
Answered in the subtitle of the article: "Filing taxes could be free and easy, but tax-prep companies and antitax politicians have fought to make it expensive, complicated and annoying."
What thoughts on doing away with income tax altogether? There is already tax on sales. No reason to have tax on source as well. Tiered tax rates based on how much you're buying or how many things you're buying can allow taxing less from the poor.
The government should easily be able to structure it so that their net revenue is more or less same. Imagine the amount of overhead and inefficiencies that can be eliminated altogether.
> Tiered tax rates based on how much you're buying or how many things you're buying can allow taxing less from the poor.
What, so now the government needs to track all my spending in order to figure out my tax rate? No, thank you.
Or like the Illinois progressive sales tax experiment of 1977? That's just plain silly¹.
¹ And admittedly not a real occurrence – look up The Pale King by David Foster Wallace.
What, so now the government needs to track all my spending in order to figure out my tax rate? No, thank you.
Or like the Illinois progressive sales tax experiment of 1977? That's just plain silly¹.
¹ And admittedly not a real occurrence – look up The Pale King by David Foster Wallace.
How would the IRS know?
Are they keeping track of whether I got married or divorced, or had a kid, or a death in the family, or a disability? Of whether I bought or sold a house, took out a HELOC, or started a home office, or installed solar panels?
Are they keeping track of whether I sold something for $5 on eBay, or of how much my sales tax was for groceries, even when I pay in cash? Do they have a file keeping track of my charitable contributions? If I'm a teacher who uses their own money to pay for classroom supplies, the IRS already knows this? They know whether the kids are at day care when I'm working? They know how much I spent on medical costs during the year? Whether I took a college class?
To the extent the IRS knows, I would consider that a bad thing.
Are they keeping track of whether I got married or divorced, or had a kid, or a death in the family, or a disability? Of whether I bought or sold a house, took out a HELOC, or started a home office, or installed solar panels?
Are they keeping track of whether I sold something for $5 on eBay, or of how much my sales tax was for groceries, even when I pay in cash? Do they have a file keeping track of my charitable contributions? If I'm a teacher who uses their own money to pay for classroom supplies, the IRS already knows this? They know whether the kids are at day care when I'm working? They know how much I spent on medical costs during the year? Whether I took a college class?
To the extent the IRS knows, I would consider that a bad thing.
The better question is, why do we pay such extreme taxes in the first place? A lot of state/local budgets seems to be well kept, but the federal budget is essentially cash incineration.
Americans pay quite low taxes relative to other countries.
There's clearly plenty of waste and poor spending in the federal budget, though there's wide-ranging disagreement on which parts are the wasteful ones.
There's clearly plenty of waste and poor spending in the federal budget, though there's wide-ranging disagreement on which parts are the wasteful ones.
My wife and I file pretty standard forms every year--no complicated deductions, only 2-3 W2s, maybe a couple 1099s and a 1098-E. For the first few years of our marriage, I did taxes by hand as a point of pride and enjoyed it (yeah, I know--most say yuck). Around 2006ish, I got a copy of TurboTax in a bundle with my first MacBook Pro and I've never looked back. It's absolutely worth it to me for $40 to me for the ease of e-filing, standardized output with all worksheets and forms, and speed of return via direct deposit. I get $40 is a lot to some people and tbh, I fully support a sliding percentage tax system with NO returns, but the vast majority of people get a return anyway, why not count the $40 out of it to be sure your returns were done right?
Oh, and yea, I still quite enjoy tax-night when I get to sit down with my reciepts and 109x's and file, though I will say I always mail my state returns in to avoid the additional $20 fee for e-file.
Oh, and yea, I still quite enjoy tax-night when I get to sit down with my reciepts and 109x's and file, though I will say I always mail my state returns in to avoid the additional $20 fee for e-file.
How the fuck can there be a fee for "e-file" it should be the opposite if anything.
I live in Sweden. Yeah, that country. Not only do we have a bank issued digital identity our revenue service has a online system for doing your taxes and it takes less than 10 minutes.
If you buy/sell stocks using ISK and have a mortgage all of that is manage for you. You just review the numbers and sign of on it (using your digital identity). Then you get your returns.
The US tax system is perplexing to me.
I live in Sweden. Yeah, that country. Not only do we have a bank issued digital identity our revenue service has a online system for doing your taxes and it takes less than 10 minutes.
If you buy/sell stocks using ISK and have a mortgage all of that is manage for you. You just review the numbers and sign of on it (using your digital identity). Then you get your returns.
The US tax system is perplexing to me.
Each state has is own tax requirements, the federal government has it's own tax requirements, some cities (NYC, Detroit etc) have they own tax requirements.
You have the ability to specify how much tax you wish to be with held by your employer if you are employed. You need to file taxes quarterly if you are self employed.
It's complicated because the variation of tax paying. It becomes bottom up rather than top down.
It's complicated because the variation of tax paying. It becomes bottom up rather than top down.
Different districts in Sweden have different rates but that's it.
I was mostly upset by them asking for a fee if you do taxes digitally. That should make it easier for them.
I was mostly upset by them asking for a fee if you do taxes digitally. That should make it easier for them.
Except you're paying $40 to a company that prevents you from having what every other modern western country has: $0, and the government did it for you.
They stole your $40 every year and used it to lobby Congress.
They stole your $40 every year and used it to lobby Congress.
You can do your taxes for free, it's just a total pita because the tax code is complicated.
We have a TON of this kind of catch-22 in the US. Capitalism and all; you can choose the free complicated way or the not-free easy way. You’re still free to complain about either. If I had my way, we’d do a progressive flat-tax; going as high as 75% for anyone making more than 1 million a year with NO returns or deductions whatsoever—-I’m sure you’d happily call me a socialist dunce if I proposed that though.
> If I had my way, we’d do a progressive flat-tax; going as high as 75% for anyone making more than 1 million a year with NO returns or deductions whatsoever
"Progressive flat tax" Those two things are the opposite of each other.
"Progressive flat tax" Those two things are the opposite of each other.
Flat taxes are not "progressive taxes", you don't know what you are talking about.
> why not count the $40 out of it to be sure your returns were done right?
Do you realize how absurd it is to justify having to pay a fee… just to give the government our money? It’s a weird argument to make especially when normalizing the whole TurboTax angle, a company that is not only the result of but a perpetuator of our broken system. Lobby to keep our system broken and inefficient to rake in money from taxpayers.
Not only should the process be free — no exceptions — but it should be painless too. And we have not checked either one of those boxes. And people will continue supporting TurboTax to inject their $40 right into the company’s lobbying budget.
It shocks me sometimes how little imagination for innovation some people have, especially as it relates to the government and the ways our institutions are ran. This is not the norm in many other countries around the world and neither should it be.
Do you realize how absurd it is to justify having to pay a fee… just to give the government our money? It’s a weird argument to make especially when normalizing the whole TurboTax angle, a company that is not only the result of but a perpetuator of our broken system. Lobby to keep our system broken and inefficient to rake in money from taxpayers.
Not only should the process be free — no exceptions — but it should be painless too. And we have not checked either one of those boxes. And people will continue supporting TurboTax to inject their $40 right into the company’s lobbying budget.
It shocks me sometimes how little imagination for innovation some people have, especially as it relates to the government and the ways our institutions are ran. This is not the norm in many other countries around the world and neither should it be.
Hey, you’re free to file freely via mail all you want—I get Intuit is a problem, but I choose $40 as an easy way to double check my work and that’s it. Its the US, freedom above sense sometimes, whatever.
The most American response ever. “I know it’s insane and stupid but at least freedom.” I would sit here and explain how what you’re describing is only an illusion of freedom but I feel I’ll continue this cascade of ignorance.
Given the existence of totally free federal and state e-filing options, the situation is analogous to bemoaning sales of Coke when generic soda exists, and hoping that government soda will put Coke out of business. Now that consumers are not inhibited, what remains is a marketing problem.
As someone with not a lot of income who would prefer to maximize their return where are theses free e-filing options?
I would start with Cash App Tax, formerly CreditKarma free tax software. Depending on your income you might also be able to use MyFreeTaxes, a United Way initiative.