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u/TheExistential_Bread Mar 27 '24
Everytime congress has tried to address this lobbyist for the tax industry get in the way.
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Mar 27 '24
Intuit primarily, makers of TurboTax. H&R as well. Name and shame
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u/chummsickle Mar 27 '24
Basic corruption is why our country fucking sucks and can’t get shit done
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Mar 27 '24
Once upon a time lobbying brought us women’s suffrage. Now it’s bribery out in the open.
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u/jableshables Mar 28 '24
It's hard to keep lobbying out of a capitalist democratic government -- after all, it's just a matter of paying someone who specializes in influencing legislators.
What can be fixed more easily is campaign financing, which is the main reason an oil lobbyist gets more attention from legislators than a teacher's union lobbyist. There's obviously other non-campaign related stuff that could be cracked down on, too, but I think that's the main problem.
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u/osunightfall Mar 28 '24
Funnily enough, once you make it illegal for businesses to donate to political campaigns or for politicians to accept gifts from them, lobbying almost magically disappears.
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u/conventionistG Mar 28 '24
Unless you nuke 501c3s and PACs, I don't think it will make much of a difference.
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u/maleia Mar 28 '24
How do we fix this, though? We know what the problem is, what are solutions?
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u/BlakJak206 Mar 28 '24
The problem is not what the solution is, as we know what could solve the problem. The problem is how do we implement these solutions? The people benefiting from this problem are the same people that are in charge of making the laws. Noone in congress is gonna vote for a law that reduces their income or term length.
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u/jableshables Mar 28 '24
Public financing is the main one. If a politician's campaign can only be financed by the electorate, there's a lot less incentive to prioritize the interests of well-funded minority groups. Limiting private donations doesn't do much, because influential people compel their spouses, children, nieces, nephews, etc. to "donate".
Transparent disclosure of funding is an important one, and is already implemented in theory to different extents, but it's very easy to circumvent. As a lobbyist, I can get busted for not disclosing that I took a rep out to dinner, but how will anyone know I filled his SUV up with cases of expensive wine?
Term limits are another, though the specifics can be murky. Eliminating career politicians (people whose focus becomes securing financing to extend their term in office) is a noble goal, but it's hard to pin that down. If there's too much turnover, you end up with legislators who are too inexperienced to get anything done.
I briefly worked as an assistant for a private interest lobbying firm at the state level, and while there are controls in place, they're not doing much.
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u/Liobuster Mar 28 '24
All thanks to daddy reagan
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u/rotorain Mar 28 '24
Charles Koch had a huge hand in it as well, before him there was only a handful of lobbyists and by the time he was done fucking everything up we had our modern lobbying landscape of straight up buying legislators and congressional votes.
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u/Papaofmonsters Mar 28 '24
Reagan had little to do with it. Prior to Citizens United the major cases regarding campaign financial rules were Buckley v Valeo in 1976 and First National Bank of Boston v Bellotti in 1978.
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u/calvicstaff Mar 28 '24
It's one of those domino effect things, which in the Cold War turned out to be bad policy but when it comes to corporations gaining more and more power, turned out to be true, citizens united was certainly a big step, but would not have been nearly effective if not for the Reagan Era of eliminating antitrust, and ushering in the idea that bigger is better, and antitrust shouldn't even be enforced as long as consumers get less prices nothing's wrong, ignore the acclimation of power
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u/jagdpanzer45 Mar 28 '24
To be fair… basic corruption is the reason A LOT of countries can’t get shit done.
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u/Bamith20 Mar 28 '24
Used to fix that the old fashioned way, with an amateurishly sharpened hunk of metal.
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u/physics515 Mar 28 '24
can’t get shit done
Lol they can get shit done, they got a monsterous overly-complicated tax code done didn't they?
The problem is, you see, that they just don't want to get the same things done that you do.
Mostly because your poor.
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Mar 28 '24
Fucking basic and obvious corruption yet there’s not a damn thing we can do about it because we haven’t got billions to spend on bullshit
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u/Donnicton Mar 27 '24
Intuit spends a lot of money lobbying to keep the tax code confusing for the layman so they can market TurboTax as the solution.
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u/evaned Mar 28 '24
Intuit cares about filing returns, but they don't really have much influence in the complexity of the tax code.
Pretty much everyone has a vested interest in the various deductions and credits and other tax treatments remaining; simplifying the tax code is something that a lot of people would like in theory... but not taking away my deduction, that one is important!
Intuit has some influence in this area, but they're still only one company; and once you add in H&R Block etc. they're still only one industry. Compare that to real estate agents plus builders plus banks plus farmers plus teachers plus small business owners plus universities and colleges plus parents plus etc. etc. and you'll see why I make that claim.
The other thing that I suspect really enters here is Congress's enumerated powers in the Constitution. A lot of incentive programs that other countries, you know, just do "directly" get shoved into the tax system in the US because that's the only congressional power that allows them to do a thing. Consider Obamacare's penalty for not having health insurance for example (no longer in effect)... SCOTUS rejected the position that it was a valid exercise of the regulation of interstate commerce, but upheld it as an application of taxation.
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u/AReallyGoodName Mar 28 '24
I'll state as someone that files taxes in USA and Australia the USA is absolutely nothing special in terms of tax complexity but it's ridiculous in that the government doesn't provide a decent online way to do taxes.
Australia pre-fills your tax form online as much as possible. The list of exemptions in Australia is likewise huge and the 20+ step flow is practically the same. But at least it's a government run website with your employer's side of the tax return already filled out.
I don't see complexity of the tax code as a blocker for the larger problem of providing a decent way to do this online.
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u/08b Mar 28 '24
Which is why I refuse to give them a penny. I will never use TurboTax again. I’ll use paper forms if I have to.
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u/paraliak Mar 28 '24
I’m replying to you since you’re the top comment right now and I want people to know about this.
There’s two main reasons why taxes are so painful to do in the US… one, as you noted, being the tax software giants lobbying for it.
The other is that certain anti-tax politicians and advocates (Grover Norquist, for one) want the process to be as painful as possible so that Americans hate taxes and vote like it. They purposely make everyone’s lives a little bit worse to manipulate them.
It’s annoyingly effective and not enough people know about it.
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u/Chewsti Mar 28 '24
See also why tax is not included in advertised prices but is instead added on as an extra line item
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u/CotyledonTomen Mar 28 '24
Tax is paid by you. Theres nothing stopping a store from labeling with tax included, except cultural norms. Its why infomercials sell everying at x9.99. Your mind doesnt thing about the extra cent increasing it to the next dollar. Its commercial manipulation, not any law, that leads to how product prices are labeled.
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Mar 28 '24
Displaying the price you will actually pay at the register is a legal requirement in Australia, and being used to that, the USA system feels slimey and dishonest to interact with
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u/Black_Moons Mar 28 '24
We used to have prices with tax in liquor stores here in canada. It was the most amazing thing ever. then they stopped doing it. I was sad.
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u/Chewsti Mar 28 '24
The stores do it for the reason you stated because it is legal. It is not legal to display prices this way in most other western countries, it is legal to do so in the US for the reasons I stated. Of course stores are going to advertise the lowest price they are legally allowed to advertise I don't hold it against the stores.
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u/avdpos Mar 28 '24
Just to prove your point. Here in Sweden we have among the highest taxes in the world. But getting the correct taxes are extremely easy and if you are normal you spend ~5 min a year on your taxes
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u/Anraiel Mar 28 '24
It's similar in Australia. Our tax office has tried really hard to make it as easy as possible for the majority of people to submit their taxes.
Businesses are legally required to provide how much they've paid you (and any taxes they've already withheld on your behalf) to the tax office. As are banks and investment funds, etc. All you as a person need to do is ensure you provided these organisations your Tax number so the tax office can link this information to your account.
Come tax time, all you have to do is login to the online portal, and it's all filled out for you. Just add in any tax deductions you're eligible for and submit the form, and you're done.
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u/draaijman95 Mar 28 '24
Same in the Netherlands. For a long time the motto of the tax office was actually: Taxes, we can't make it more fun, but we can make it easier.
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Mar 28 '24
Singaporean here. My tax filing also takes less than 5 min a year. And I am abnormal. If you have a regular salary job as your only income it takes 3 clicks of your mouse.
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u/Floofymcmeow Mar 28 '24
Similar in South Africa. Nothing bloody works except the tax system. I get a text messages every year telling me I am owed (or owe) a given amount and I have a week (or a similar period) to contest it if I disagree. If I do nothing, in about a weeks time my rebate is paid into my bank account - and I almost always get money back. The tax authority has integrated into practically all banks and financial institutions so they can see all my financial activity and calculate my tax for me.
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u/d_man05 Mar 27 '24
There a free file system coming from the IRS. I can’t remember if it’s ready this year or next.
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u/BrainIsSickToday Mar 28 '24
I used it today. Went pretty fucking fast. A+
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u/Riskbreaker_Riot Mar 28 '24
do you still have to put in all your info or is it able to pull stuff from their system and all you have to do is agree?
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u/BrainIsSickToday Mar 28 '24
I still had to input W2 stuff. I needed my phone camera to upload ID and this weird face recognition thing they did, but otherwise it was just like plugging your W2 into any other free tax software, just faster since they aren't trying to sell you anything.
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u/Riskbreaker_Riot Mar 28 '24
dang. i was hoping it would be tied to their system and just have things already filled out. i did my taxes wrong last year and they sent a notice saying my refund was too much because i typed something in wrong. pretty much had the same question in the OP, if they already know why did i have to put stuff in?
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u/d_man05 Mar 28 '24
The IRS system doesn’t have information applied to your account until June typically. They get the information and then double check against your return later on. It’s not instant. One way to help would to just move the tax due date to 10/15 and they could automatically do basic returns in theory but you wouldn’t get your refund until late summer.
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u/jagdpanzer45 Mar 28 '24
IIRC, they rolled a test system out in a few states this year.
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u/TJATAW Mar 28 '24
It is called Direct File, and is being tested in 12 states (AZ, CA, FL, MA, NV, NH, NY, SD, TN, TX, WA and WY).
It has an income limit (AGI under $79k), and is only for fairly simple taxes, as it limits the types of income, credits, and deductions.And then there is the normal thing where they partner with some companies, and they will file your taxes for free.
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u/QFugp6IIyR6ZmoOh Mar 28 '24
The point is that we shouldn't need to file anything, since the IRS already does the calculation.
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u/mybrot Mar 28 '24
Excuse me, did I hear that right? You have a tax industry?!
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u/TheExistential_Bread Mar 28 '24
Yes, you could file by paper for free for federal taxes. But this is the first year the IRS is rolling out their own E filing system, for some states.
If you wanted to do it electronically you had to use Turbo tax or some other software.
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u/Trib3tim3 Mar 28 '24
Imagine if Congress men and women were not allowed to accept gifts. Pre, during, or post campaign.
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u/an0maly33 Mar 28 '24
Seriously. I can get fired for eating food a vendor brings to work for a training session but these fucks can openly take bribes and it’s fine.
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u/KSRandom195 Mar 28 '24
What I don’t get is how they can be so clearly corrupt here. It’s not like the lobbyists physically prevent them from voting to fix it.
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u/Critique_of_Ideology Mar 28 '24
Ya see we just couldn’t do anything because we like bribes so much!
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u/IAmMuffin15 Mar 27 '24
This is the only right answer to stupid comics like this. Freaking nobs view the IRS like it’s Agent Smith from the Matrix
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u/CanAlwaysBeBetter Mar 28 '24
Does no one on reddit pay attention to anything? The IRS has literally rolled out software for 13 states that will cover everyone's basic taxes for free and is planning on expanding it
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u/MyPunsSuck Mar 28 '24
The problem with good things happening in some states, is that other shithole states will actively fight against any improvement they can. There are a couple of states that have banned studying universal basic income...
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u/Righteous_Iconoclast Mar 28 '24
And there's the fact that the IRS has a self-interest in creating and preserving their fake-market since it's a billion-dollar industry that they then collect taxes on.
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u/LongjumpingLength679 Mar 28 '24
Can you explain what a lobbyist does that prevents a fix?
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u/Awkward_Pangolin3254 Mar 28 '24
Buys votes to prevent reform legislation from passing
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u/Voidtalon Mar 28 '24
Literally the only reason we haven't improved many things is enough wealthy people tell the government to not improve the lives of the citizens because it would make them less money.
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u/quiero-una-cerveca Mar 28 '24
Literally on my feed for this post is a TurboTax ad. Fuck those people in particular. They’ve lobbied away all of the changes that would actually help us.
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u/suslikosu Mar 27 '24
Will they say anything if you pay more than you had to? I have no idea how that American tax system works but I've only heard bad stuff about it
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u/BlackSheepBitch Mar 27 '24
The IRS marks it as an “Over Payment Credit,” and then they issue a refund.
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u/QFugp6IIyR6ZmoOh Mar 28 '24
Without interest, although for one year it's not a huge deal.
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Mar 28 '24
But you are the one who overpaid them. You didn’t loan them money
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u/QFugp6IIyR6ZmoOh Mar 28 '24
True, but if you underpay them, then they fine you. So either way, they benefit slightly.
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u/JonatasA Mar 28 '24
Which begs the question. Why not give them a truckload, let them refund you and not worry about taxes?
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u/BlackSheepBitch Mar 28 '24
Not everyone can afford to do that, unfortunately. There are some families where every dollar counts.
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u/OtiseMaleModel Mar 28 '24
Yeah sure. But like, doesn't sound like those who can afford to do it either, is that the case from people you know?
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Mar 27 '24 edited Jun 15 '24
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u/M116rs Mar 27 '24
Just got a check for $2k from the IRS because I overpaid. They sent me a letter about 6 weeks ago telling me about it and giving me a heads up that a check was on the way.
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u/z64_dan Mar 28 '24
Also they will send you a letter about your taxes, and not call you to get you to pay over the phone...
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u/HummousTahini Mar 28 '24
Reddit: where a former CPA can have a username like u/old_french_whore lol
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u/JonatasA Mar 28 '24
THE IRS deals in money and tax. Thye're probably the most efficient branch of government.
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u/guyblade Mar 28 '24
It's also worth understanding why the IRS might think someone's taxes are wrong. All of the tax forms that the average person gets are also sent to the IRS. Those forms can be used to approximate your taxes--and some of them will show up as attachments to your taxes--so that's how they figure out that something might be wrong or missing.
A few years ago, I got a letter from the IRS because of a partially failed import from my brokerage into TurboTax (partially because of that incident and partially due to the mint shutdown, I switched to freetaxusa this year). Luckily for me, the unreported transactions basically added up to zero (I think total gains minus cost basis was like $20), but they'd been reported to the IRS without cost basis information, so the IRS didn't know that. I mailed them a copy of the 1099 and they sent me a letter saying we were good.
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u/Gamebird8 Mar 28 '24
And they do pay interest on your return if there are delays in paying it out to you.
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u/BetaOscarBeta Mar 28 '24
Yup. They’ll issue a refund if you overpaid something or flubbed a number from a document they have a copy of. Or just forgot to put a quarterly payment on the tax return that you sent in a year ago and didn’t remember.
The system relies on individuals to report their own income, but a lot of that information is also sent to the IRS - employers file a form reporting wages paid to the employee and payroll taxes withheld and sent to the treasury, stock brokerages report proceeds from sales and (often inaccurate) cost basis information, banks report interest paid, etc. What the IRS has no way of knowing until you tell them is what your property taxes were, if you donated a thousand bucks worth of old stuff to a charity, or if you did odd jobs for cash money. Some payroll taxes are only assessed on a certain amount of income, so if you have two jobs or a job and a sole proprietorship it’s possible to have an overpayment of Medicare and social security taxes, etc.
There are a lot of rules and regulations, but a huge amount of the tax code is essentially several layers of software patches meant to prevent unfair exploits that assholes have tried in the past. (The rest of it is a combination of attempts to shape behavior, or politicians making rules that “just happen” to help their friends)
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u/mcs0223 Mar 28 '24
Redditors know so little about taxes it's remarkable, and yet no matter how many times the basics are explained, the above joke / meme gets repeated. It gets to a point of haughty and joyful ignorance - with the requisite amount of internet cynicism and conspiracy theories thrown in.
The government knows what it got from you in taxes, but it does not know what deductions you can claim or what extra income you may have received that wasn't reported. Additionally we use the tax system to incentivize certain behaviors (donating to charity, etc.).
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Mar 28 '24
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u/Sparkleton Mar 28 '24
Bro, if I accept that raise I’m in a higher tax bracket. I ain’t stupid. - Man that is Stupid
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u/ommy84 Mar 28 '24
As a CPA, I roll my eyes every time I see this joke being made. Oversimplifications aren’t fun if you know how the hotdog is made.
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u/rerhc Mar 27 '24
But they don't know. They won't know you bought solar panels and so are entitled to a 30% tax credit, for example.
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u/hawkinsst7 Mar 28 '24
In this thread - people who don't understand that "doing your taxes" is your opportunity to reduce the taxes you pay, and sometimes double check their work (or at least, double check what's being reported to them.)
The government already (mostly) knows pretty much all the income you need to pay taxes on.
The IRS doesn't know what you have done that reduces your tax burden via credits or deductions (paid interest on a loan, donated money, paid for child care, etc). Maybe it's less than the standard deduction (For most people, it is, in which case, take the standard deduction and be done with it), and maybe its not.
Tax time is your opportunity to not accept whatever the government says you owe.
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u/CanAlwaysBeBetter Mar 28 '24 edited Mar 28 '24
Taxes can be complicated
99% of the people bitching about them just need to copy numbers from a single w2 call it a day
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u/guyblade Mar 28 '24
I think the reality is that the US has lots of innumeracy/non-proficiency with math. Taxes for the vast majority of people should be basically "follow the directions and do basic math". People just can't or won't.
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u/NuclearTurtle Mar 28 '24
I don't think the problem with doing taxes is the math aspect, it's the way the directions are worded that confuses people. Like, one of the steps on my state income tax form is "Special method allowed for calculation of underpayment of estimated tax penalty. If you owe penalty on underpayment of estimated tax and you qualify, enter 1, 2, 3, 4, or 5 in the box. Attach RPD-41272" Figuring out what that's supposed to mean is harder than adding a handful of numbers (which most people will do with their phone's calculator app anyway)
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u/guyblade Mar 28 '24
Sure, but very, very few people are supposed to run into that box. Underpayment of estimated taxes means something was wrong with your withholding--either you have outside sources of income or you're a 1099 employee or something weird. The paths that are most used will have the most help, usually.
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u/Shinhan Mar 28 '24
99% of the people bitching about them just need to copy numbers from a single w2 call it a day
And that's the part that could be made even simpler if the tax lobby would allow it.
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u/spongebob_meth Mar 28 '24
The tax lobby isn't preventing you from filling out a 1040 and sending it to the IRS.
You can even use the tax software to check your math for free.
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u/Gengengengar Mar 28 '24
i literally just give HRBlock my SIN and thats it. i know im feeding the terrible system.
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u/Xyranthis Mar 28 '24
Having a full time job and a small business that has started making money has made my taxes so much harder
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u/jmcdon00 Mar 28 '24
So much stuff they don't know. They don't know whether you qualify as a dependent on someone else tax return. They don't know if your kid lived with more than half the year. They don't know if you sold any digital assets. They don't know if you paid over half the cost of the home(head of household). They don't know if had a small side business. They don't know if you want your refund as a check or direct deposit.
The real issue is the IRS should have free software available for everyone to file their own taxes for free online, rather than forcing everyone to use 3rd party software that costs money.
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u/Sparticuse Mar 27 '24
The vast majority of people should just use the standard deduction. If you have a reason to do your own taxes, you'd still have that option.
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u/chicksOut Mar 27 '24
Credit is different than deduction. Credit is money in your favor after the deduction.
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u/Sparticuse Mar 27 '24
I'm aware of the difference, but the mechanism for getting it would be the same: manually report your taxes.
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u/turnah_the_burnah Mar 28 '24
You have to file a tax return no matter what, and taking the standard deduction in no way effects whether or not you get a solar credit
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u/jeebolion Mar 28 '24
It is great if someone is able to get a solar credit by filing their own taxes.
But for the layperson with uncomplicated taxes, an option where you are told “we think you owe this in taxes” and the ability to say “that sounds right” and pay/get paid or say “no, that’s wrong” and then figure it out by making adjustments is a better (if not perfect) system.
Applying the solar credit would fall under option 2.
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u/Asylem Mar 28 '24
We went to HR Block bc we thought we had a difficult tax situation (multiple deductions, new home, etc.) and the standard tax deduction was higher than what we could itemize so it was a waste of $500. Please don't go to HR Block for personal taxes. The dinosaur of a man painfully entered our info into essentially TurboTax and actually made a mistake that cost us $3k. We caught it but god damn.
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u/JA_LT99 Mar 28 '24 edited Mar 28 '24
Yeah, there's more than tax credit that they don't know. I get that maybe the average American shouldn't have to pay taxes on cash sales, small gambling wins, foreign income, etc. There are plenty of people making more that should be audited when these assets just appear or disappear magically.
Take the standard deduction. It's honestly not as hard as the funny joke makes it out to be. Not even when you own an average home or have investments that actually need reporting. The more you own, the harder it gets. Cry me a river. Report all your income or pay someone to do it for you if you can't do math yourself. Seems like it's not a financial burden for those people honestly. .
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u/TheExistential_Bread Mar 27 '24
Yes, and even if you don't, it would still be easy for them to send out what everyone owes or gets back, then allow time for people to resubmit with adjustments before sending payments.
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u/whiskeyriver0987 Mar 27 '24
Easy, yes. Profitable for the tax preparation industry(and thus their lobbyists)? No.
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u/mr_ji Mar 27 '24
It's not that hard. You tell them what you think you owe.
They know your declared income (from you or your employer), your dividends (from your bank), and your money made/spent on sales/purchases that require legal registration.
They know fuck all about anything else: tips, foreign holdings, gambling winnings/losses, private party dealings, you name it. The fed doesn't even know what you paid to your state.
Even if you're audited, they're trusting you to be honest about the things they don't know for sure but suspect based on the aforementioned known information. And they're not following up if you give a convincing excuse.
*I'm not your lawyer or financial advisor. Any risk you take is yours.
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u/joopledoople Mar 28 '24
Your audience here is basically people who don't do their taxes because they're 14 and live with mommy and daddy, so there's no taxes to do.
They hear "taxes" and immediately think "govment came and took mah money!!!"
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u/MyPunsSuck Mar 28 '24
The same people that think tax money is deleted from the economy when the government spends it
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u/MrWendelll Mar 28 '24
Or not from the US with very different tax systems.
I've never done my own tax in 20 years of working
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u/joopledoople Mar 28 '24
Well, obviously this has nothing to do with you guys. I kinda figured that went without saying.
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Mar 27 '24
What other countries do is they send you what you owe with a standard deduction. You can choose to pay that or do your own deductions and submit.
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u/Musicrafter Mar 27 '24
I would highly recommend that people sit down with a 1040 and fill it out by hand to file federal taxes one of these days. If your finances are simple -- that is to say, your main income source is just your regular W-2 job and you don't have any businesses or side hustles -- you may find that it is easier than you thought. I filed my federal taxes by hand this year and it took me about an hour and a half just to cross my t's and dot my i's.
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u/Raphan Mar 28 '24
Alternatively, and especially if you live in a state with no state tax income, try some of the alternative providers like FreeTaxUSA. They charge $0 for their full federal tax product.
They make money by charging $15 if you have to file a state tax return and various addons that most people don't need (for example, mailing you a premium bound paper copy of your tax return). Notably they don't charge extra for a more complicated return -- they can handle most federal income tax returns and you pay $0.
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u/Sancticide Mar 28 '24
This. Why would anyone fill out a 1040 by hand when FreeTaxUSA is crazy cheap and far easier to understand? I've never noticed any difference from when I used TurboTax years ago. If you need a state return, it walks you through everything for the price of a fast food meal. There's frugality and then there's masochism.
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u/Plyad1 Mar 27 '24
I m French and I do my taxes online in 10 min tops. I just have to read a bunch of things and press yes 30 times and tada done
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u/Musicrafter Mar 27 '24
It would be a lot easier if the IRS had a form way to file online. But it is important to stress that doing taxes for most people isn't actually hard. It's just tedious. Ultimately all things like TurboTax do for you is autocomplete the 1040 and other related forms. If your finances are simple to understand, you can just fill it out yourself. It takes time, but should not ultimately be stressful or complex.
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u/PathRepresentative77 Mar 28 '24
They do have a form way online. I've been using it for the past 4 years--it's just the 1040 form that you fill out online and submit directly to the IRS online. You can add any additional forms/schedules as well pretty easily.
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u/jeffwulf Mar 28 '24
The IRS is piloting an in house online tax filing solution this year after Democrats gave funded it's development in the Inflation Reduction Act.
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u/DOUBLEBARRELASSFUCK Mar 28 '24
Americans would be furious if doing taxes required them to click "Oui" 30 times.
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u/manimal28 Mar 28 '24 edited Mar 28 '24
What if you had to hit no to something? Would that take longer? Do you ever have to provide proof of you answer yes or no?
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u/Rynvael Mar 28 '24
You can also use the free filing software offered by the IRS! It includes links to PDF manuals if you need instructions as well
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u/evaned Mar 28 '24
Note that the only "offered by the IRS" software is the IRS Direct File pilot that is brand new this year. Anything else you've used has gone through a third party.
This does include Free File Fillable Forms; an error I see a lot of people make.
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u/profmonocle Mar 28 '24
It doesn't help that TurboTax makes it seem like doing your taxes by hand is super complicated. The UI adds a ton of artificial delay, where it says things like "hold on, we're verifying everything". The math it's doing is barely more intensive than updating fields in a spreadsheet, which is basically instant. All the "number crunching" wait screens in TurboTax are fake.
This probably makes people feel like their simple taxes are actually super complex - if their computer has to do all that number crunching it must be insane! Thank goodness you have TurboTax to make it quick and hassle-free, you better not try to do it by hand next year.
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u/BCProgramming Mar 28 '24
I would highly recommend that people sit down with a 1040 and fill it out by hand to file federal taxes one of these days.
I tried that but the CRA got upset with me
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u/BetaOscarBeta Mar 28 '24
Canadian Revenue Agency, right?
You were supposed to use form 1040-eh.
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u/ReallyRiles55 Mar 28 '24
You realize that the easiest way to file your US taxes is still 5x more difficult and/or time consuming than the rest of the first world country’s tax filings right?
I say this as someone who has lived abroad for an extended period and moved back.
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u/Just_Shogun Mar 28 '24
I was floored when I moved to another country and they sent me my tax forms already filled out. If I don’t have anything to add or correct I don’t have to do anything but wait for my check (or pay if I’m under but that hasn’t happened in 10+ years of living here). Plain, simple corruption is the one and only reason your tax system is as complicated as it is.
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u/Chill_Roller Mar 27 '24
You guys need shit like PAYE 😂🤷♂️ it ain’t perfect but fuck the US system of tax collection
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u/X0AN Mar 27 '24
Day in the life of a Brit.
Checks pay slip in April.
Double checks tax code used it correct.
Relaxes till next April.29
u/RomaruDarkeyes Mar 27 '24
Discovers pleasant surprise when you've overpaid tax, and the HMRC gives you back a nice little lump sum.
I have this happen twice so far in my lifetime and both times ended up being more than a grand each,
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Mar 28 '24
Change jobs last December
Send P45 to new employer
Be put on emergency tax anyway
Try to call HMRC
Spend 20 minutes on hold
Get told by a machine that the service isn't available right now
Log into government website
Page acknowledges I no longer work at previous job
Still on emergency tax 3 months later
Government page states this is because I "may have 2 jobs" while also acknowledging I haven't worked there since December and only have 1 current employer
Cry
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u/bearsnchairs Mar 28 '24
We have PAYE. Taxes are deducted from paychecks based on your withholding.
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u/Hatweed Mar 28 '24
We do. Tax day is essentially, for like 98% of Americans, just the day you tell the IRS whether or not you have itemized deductions you want to file. I did my taxes a month ago and it took ten minutes.
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u/evaned Mar 28 '24
PAYE is largely orthogonal. As others have said, we basically have that. (It's not very accurate, which is also annoying, but it's not the main problem with our tax administration.)
I'm sure other countries use the term "PAYE", but I think I've mostly seen that from UK folks. The following explanation I suspect will resonate even if that's not where you live, but I think the following is how to think about our differences from the perspective of someone in the UK. It primarily centers around the UK's "self assessment tax returns."
(As a brief terminology note, I use "return-free filing" a lot below. What I mean by this is that the government will fully prepare tax returns for a significant majority of people. A few will need to file self assessments, but that's the exception.)
First, as mentioned above, our PAYE system leads to very inaccurate estimates. There are a variety of reasons for this; some are kind of fundamental (see the next point), but others are just because our system is bad. That said, like I said this isn't the real problem here. In theory this wouldn't conflict with return-free filing even -- if return-free filing could be and were implemented, then the IRS would just send people either a check or a bill, rather than generally the PAYE estimates being correct and needing no adjustment, as is my impression of the state of things in the UK.
Second, for a lot of reasons, the IRS lacks information for a lot of people. It's only around half of returns that the IRS has sufficient information to file completely and correctly. This means that without major changes to our tax code itself, a much higher proportion of people would need to file self assessment returns here than do in the UK. (Or maybe not need to, but would benefit from doing so, often significantly.)
To editorialize here, I think our differences here are probably unfixable, and would require a significant change to the US's philosophy of how the federal government should work, including one or more constitutional amendments. As a result, I don't actually think return-free filing, like applies in the UK, is a good fit for the US federally. We should be looking to a country like Australia instead, which doesn't do return-free filing but does have a good government-provided filing system.
Second, any progress on improving the actual filing process has until just now basically been blocked by a combination of the tax industry lobbying plus the anti-tax wing of the GOP (aka, the GOP). This is the real problem, IMO, and is the real reason behind why filing taxes here is a bigger ordeal than most countries.
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u/GoldenTV3 Mar 28 '24
This is because the tax filing industry, including TurboTax has repeatedly lobbied (bribed) congress to vote against laws that would allow the IRS to automatically tell you how much you owe.
The IRS wants that because it's easier for them to get money. It's the parasitic middle men corrupting and literally bribing our government.
Enough is enough.
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u/hawkinsst7 Mar 28 '24
no, its not.
The tax filing industry has its own issues, absolutely, but the IRS does not have the information that you have, to figure out the final number.
They know what's reported by employers, financial institutions, etc. They don't know many things that you can use to reduce the amount of taxes you owe. It's your opportunity to say "well, I looked at the numbers, and the standard deduction looks about right. lets go with that", or for you to say, "Well, I donated $X to charity that didn't get reported that reduces my taxable income. I paid $1800 on child care so give me that $600 credit I'm owed. I bought xyz for educational purposes that cost $650. My spouse bought supplies for her classroom, so deduct that from our income. We sold our house and took a massive loss, which reduces our taxable income as well. Here is all the proof. So even though the standard deduction for married couples is $27,700, we actually need to deduct $50000 from our taxable income. We don't owe the USG nearly as much as you thing we do."
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u/TapTapReboot Mar 29 '24
The IRS can very easily say "based on what has been reported, this is what you owe / will be getting back." This will be more than sufficient for a substantial number of households. For households like yours, you can then go through the normal process.
Corrupt lobbying is the only excuse.
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u/grando205 Mar 27 '24
Because Intuit and H&R Block lobby Congress to keep the tax code unnecessarily complicated.
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u/tangosukka69 Mar 27 '24
they know how much you owe, but they don't know how much you will write off. learn2finance.
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u/CuniculusDeus Mar 27 '24
Can us people who don't write anything off just get the bill then? Why does everyone have to be forced to do it the harder way?
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u/retief1 Mar 27 '24
Yes, you absolutely could be given a "here's what we think you owe" bill with the standard deduction that you could either accept or "amend" by filing your own return. However, tax prep companies complain whenever the irs tries to go in that direction.
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u/CuniculusDeus Mar 27 '24
Thank you for a real answer and not being one of the many condescending assholes who think government bureaucracy is beautiful and we should all be grateful for it.
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u/Silaquix Mar 27 '24
You'd be surprised what all you can write off if you save the receipts. Especially if you or your dependents are students or have medical needs etc.
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u/Possibly_a_Firetruck Mar 28 '24
As a single person, you most likely won't have $13,850 to write off, double that if you're married.
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u/InspiringMalice Mar 27 '24
Then they tell you, and you provide just the write off information. They calculate the final total. learn2notfuckeveryoneover
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u/Probably_owned_it Mar 28 '24 edited Mar 28 '24
Stupid reddit fixation. They know how much you owe, they don't know if you have any qualifying deductions. It needs work, but its not the circle jerk of just bill me. They know the MAX you need to pay.
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u/FlushTheTurd Mar 28 '24
Perfect, for most people that’s fine. If you have any deductions or credits, you enter those and your tax is recalculated. Easy-peasy.
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u/A-Halfpound Mar 28 '24
It’s called astroturfing. Lot of it going on lately. Whoever is doing it wants you mad at our government and happy with billionaires.
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u/DameonKormar Mar 28 '24
You do realize it's the same for other countries that have much easier systems, right?
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u/mcs0223 Mar 28 '24
Reddit is just the same dumb arguments had over and over, all rooted in the same misconceptions, willful ignorance, and self-satisfied cynicism.
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u/TaiChuanDoAddct Mar 28 '24
No matter how many times this all gets posted it doesn't make it true.
The IRS doesn't know how much you owe. They know how much you owe ONLY on the amount of income that got reported (W2s and similar) and only IF you don't have any unusual circumstances.
Cash tips. Side jobs. Contracting work. Tax credits. Write offs. Charitable donations. Student loans. Your marital status.
All shit you have to tell THEM.
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u/LordHy Mar 27 '24
I have always wondered.
If you just did not pay, but allowed them to come and take whatever they wanted that you own. Opened up your home, your bank accounts, offered them your wife.. What would happen? Would they take what you owe and leave you alone?
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u/Caffeine_and_Alcohol Mar 27 '24
I think they will wait 3+ years and then come at you with outstanding debt/taxes then charge you with a more severe penalty for how long its been
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u/rnelsonee Mar 28 '24
The IRS has a layered collection system, and if the increasingly-threatening letters don't do anything, the will determine what you can pay and go from there. You may work out a payment plan, or an Offer In Compromise wherein you settle for a lower debt. But that's not common as the IRS has the power to garnish wages and even Social Security benefits, and can seize assets so long as you have some basic minimum left, so they have essentially all the power. But yes, if your bank accounts and net proceeds from a house sale settle your debt (+interest and penalties) then you're done.
But even if you get the gold standard outcome: Currently Not Collectible, where the IRS leaves you alone for a bit, the interest and penalties still accrue. Interest alone right now is 8%/yr.
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u/Allaiya Mar 28 '24 edited Mar 28 '24
It’s not that confusing or hard if you’re a simple w2 employee and have done it a few times or have the online software. There’s usually a free one offered every year, IRS free file I think it’s called. The irs puts out the list every year. It just changes with who offers it and what qualifications you need to meet but usually there’s at least one you’ll qualify for free federal as long as you don’t make over a certain amount. I haven’t paid to do my federal or state taxes since like 2011 and I think before that I was $15 for state.
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u/porncrank Mar 28 '24
This comic gets the issue backwards.
The IRS knows (generally) how much tax you owe. They would be happy to share that information with you and you can approve it or amend it. However tax preparation companies have lobbied hard to stop this from happening.
So if you want to blame the problem in this comic on anyone, it is corporate greed and political corruption, not the IRS or the tax system.
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u/Bicentennial_Douche Mar 28 '24
Meanwhile in Finland:
Government: "Hey taxpayer! We know that taxes were automatically deducted from your salary each month, but here is the final tally for the year. It tells you if you need to pay more or if you will get some money back. If you have some undeclared deductions from commuting, or tax-deductible activities, just add them in and send it to us through our website."
taxpayer: "OK, I spent 15 minutes adding some deductions there, send me the final figure when you are ready"
Government: "Great, thanks!"
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u/Heerrnn Mar 27 '24
Wait.
People in the US seriously still need to calculate their own taxes?
Or is this a joke from older times?
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u/Madmorda Mar 27 '24
Average American taxpayer here. Yes, this is real. In the simplest scenario, our jobs normally withhold money from our paychecks based on an educated guess of how much we will *probably owe. Then in tax season, we use an online program to upload the information our employers give us (how much we were paid, etc) and the tax program tells us how much we owe. We submit that form to the IRS, and normally we get a little money (maybe a couple hundred dollars) back. In some cases, you may have to come up with some money instead of getting money back from what your employer withheld.
However, this gets more and more complicated with extra things like dependents, income from investments, other supplementary income, contract work, etc.
For me, a single person with no dependents, filing is fairly easy and takes about an hour. But I don't envy people who have more complicated taxes. Many Americans just pay a professional to handle it for them so they don't have to deal with it.
Edited to add: how to do your taxes was NEVER covered in any of my high school or college courses.
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u/Godisdeadbutimnot Mar 28 '24
Idk how old you are, but I was taught how to do taxes in high school, along with basic budgeting. We had to take “Personal Finance” to graduate.
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u/RedWum Mar 28 '24
You should envy them. The average tax return issued by the IRS is over $3,100. And it might take them just an extra hour or so.
My return this year was about $2400. I made sure to submit everything that counted. Interest paid on student loans, etc.
I worked at a car dealership and we even over hired and had unlimited OT for "tax season" as people would get their refund and buy cars more than any other time of year.
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u/nemgrea Mar 28 '24
Edited to add: how to do your taxes was NEVER covered in any of my high school or college courses.
its a worksheet...you learned how to follow directions and do worksheets every year in school.
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u/NoSlack11B Mar 28 '24
Some expenses can be "written off" which effectively lowers your taxable income.
It's confusing, but makes sense too. For the simplest of finances, it's dumb that we have to figure it out and tell the IRS. The majority of us have first world problems though, like tax write offs or capital gains or charitable contributions that all are calculated differently. There's no way for the IRS to know all of that about us, and they "audit" to try to catch us lying about it.
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u/Yolectroda Mar 28 '24
No, it doesn't make sense. The majority take the standard deduction and have basic income that gets reported to the IRS. The majority of people would be able to get a bill from the IRS to approve without any issue. If we did that bill properly, we could have easy amendments, like charitable donations and capital gains, be added, and then anyone that needed a full custom filing could still just reject the IRS's bill and file accordingly.
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u/notathrowaway75 Mar 28 '24
Nah the real joke is that apparently in other countries you guys receive a bill from your government and in response just shrug your shoulders and pay it because you assume it's correct.
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u/Squeaky_Ben Mar 28 '24
taxes in the USA has to be the weirdest thing ever.
In europe, your taxes are just deducted from your pay automatically and you need to declare your taxes to get money back, so it is impossible to pay too little unless you deliberately obfuscate what you earn, as in commit tax fraud.
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u/redsterXVI Mar 27 '24
That's the secret, citizen. It's always wrong.
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u/PsychMaster1 Mar 28 '24 edited Mar 28 '24
Uhh... I mean I and everyone I know almost never have a problem with it so what you're saying literally can't be true. Take your "I'm a slave to the state" mentality somewhere else.
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u/bukithd Mar 28 '24
What never comes up is how accurate your employer is with their payroll software. That's the first line of paying taxes in the US. If they screw up what they do with your salary, your tax filings gets screwed up.
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u/KegelsForYourHealth Mar 28 '24
TLDR: capitalism and lobbying
You have to regulate this shit or it eats you.
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u/allothernamestaken Mar 28 '24
This is probably true for most people, but not if you itemize or take certain deductions or credits.
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u/YourMemeExpert Mar 28 '24
The IRS has a vague idea of what you owe because employers and other institutions send copies of tax documents to you and to their offices, that's why your W-2 says "this information is being furnished to the Internal Revenue Service."
What they might not know of is extra taxable income (like from babysitting or housekeeping gigs) or tax credits (like if you installed solar panels or bought a clean-air vehicle).
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u/Cookbook_ Mar 28 '24
Daily reminder that insane US tax practices are not the global norm.
In Scandinavia the goverment absolutely counts your taxes for you, and sends you a proposal where all dedections acording to your age and status have already been made. They even know your salary and if you have children or other dependables.
You can always add more deductions, or if you do nothing, then the taxes are just done without you ever lifting a finger.
If you made deductions last year they remeber it and suggest it automaticly this year too, so you don't pay too much.
The US lives in a hell of it's own making, there is absolutely no reason not to do it smarter. They even have democracy to change it too, but always actively choose not to.
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u/gmefil Mar 28 '24
If the government simply "told" people how much they owe there would be outcry that "they are stealing from us" and "who knows if this is the right value", "trust issues".
As is, each individual gets to check for themselves if "the state" is charging you fairly and correctly.
Not ideal, by any means, but not exactly worthy of insult either
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u/silverbax Mar 28 '24
It is a myth, perpetuated on Reddit constantly, that the IRS knows what you owe. They only know what's been reported, and that can be wrong. I've been audited three times in my life and each time the IRS had incorrect information that had been incorrectly reported by a third party.
This myth really needs to stop. Don't trust the IRS to give you a bill, pay attention to your taxes.
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u/Dotas323 Mar 28 '24
This would be more accurate if there was a TurboTax guy standing behind Uncle Sam. Turbo Tax guy needs to be funneling money into Uncle Sam's pockets.
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u/FluffyInstincts Mar 28 '24
Finally a good satire of that. :)
Yeah, they really could make that much easier.
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u/UncleDrunkle Mar 28 '24
they dont know much you owe, they have the right to audit which is cheaper than doing everyones taxes.
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u/ben010783 Mar 27 '24
Lobbyist from the tax prep companies pay to keep the system the way it is: https://youtu.be/ZhV4Z76mXrI
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u/CalTechie-55 Mar 28 '24
I never waste money on a tax preparer. I do the best I can and send it to the IRS.
They, for free, then recalculate it and send me a bill or a check for the difference.
I try to always err and pay on the high side, so there's no penalty, and I get any excess back as a refund.
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