[HN Gopher] FTC Is Investigating Intuit over TurboTax Practices
___________________________________________________________________
FTC Is Investigating Intuit over TurboTax Practices
Author : justinpropub
Score : 341 points
Date : 2020-09-08 15:01 UTC (7 hours ago)
(HTM) web link (www.propublica.org)
(TXT) w3m dump (www.propublica.org)
| supernova87a wrote:
| Why are we bothering with the small potatoes in the room
| (TurboTax not putting URLs to free tax filing, etc. etc) when the
| elephant is:
|
| "Why isn't the IRS giving people a way to prepopulate and file
| taxes for free with the financial info that the IRS already has
| on everyone?"
|
| Well, I suppose it's just a product of the corporate interests
| and congressional deadlock that prevents us from doing a
| multitude of things right now. Other countries manage to do this
| just fine.
| scott_s wrote:
| Because we know the answer: the IRS is prevented from doing
| that by law. Lobbied by Intuit. If you google around, you can
| find stories on it.
|
| edit: save_ferris linked to an excellent story below:
| https://www.propublica.org/article/filing-taxes-could-be-fre...
| dbalbright wrote:
| Yep. One such story is a podcast episode from Planet Money ht
| tps://www.npr.org/sections/money/2019/04/03/709656642/epis...
| rootusrootus wrote:
| Grover Norquist is probably more of the reason than Intuit.
| apta wrote:
| It's outright ludicrous how a private company is able to
| introduce a law that prevents a government agency from doing
| its job.
| crispyporkbites wrote:
| Ok so I don't know much about the us legal and political
| system, but a couple of questions:
|
| - why does a judge in a lawsuit get to make the decision
| here? I.e. why is this kind of law not debated as part of
| public discourse and a decision made through a democratic
| path?
|
| - given this benefits a tiny fraction of people in the US,
| why doesn't a particular party/politician take a stand on it
| as a policy to win a chunk of votes?
|
| For the first point, a UK former judge spoke extensively on
| the topic of the courts overstepping their remit as part of
| the 2019 Reith lectures:
| https://www.bbc.co.uk/programmes/m00057m8
| OJFord wrote:
| Or just taxing at source for the common things, so that
| 'filling taxes' isn't something most people have to do.
| Broken_Hippo wrote:
| I'm pretty sure payroll taxes are things taxed at the source:
| I'm not sure there is a less painful way to tax for, say,
| social security or military spending. I'd honestly be happy
| changing some things into payroll taxes, honestly: Gasoline
| taxes, for example, aren't going to fund roads as much in the
| future (and efficient cars are already causing issues). Folks
| that work use roads in most cases, though, even if they use
| public transportation.
|
| We (Americans) still, in general, don't need to file taxes
| like we do, though. The US has tons of paperwork: Norway
| sends me an electronic document to look over and unless I
| _want_ to file, I owe money, or something is wrong, I don 't
| have to do anything. They will automatically pay out refunds.
| Sure, I still "file taxes", but realistically, I just look
| over some electronic paperwork.
|
| This method of "filing taxes" makes it easy to comply with
| filing and I'm guessing it makes collection rates better with
| less work.
| rootusrootus wrote:
| > This method of "filing taxes" makes it easy to comply
| with filing and I'm guessing it makes collection rates
| better with less work.
|
| This is by design, in the US the anti-tax crowd wants
| filing taxes to be harder and more inefficient. It serves
| their purposes. And they are a powerful lobbying group.
| Broken_Hippo wrote:
| While the anti-tax folks sometimes want this, I'm pretty
| sure most of the actual lobbying that keeps it difficult
| is done by the tax software companies - Intuit, for
| example.
|
| Not including sales tax actually demonstrates more
| clearly the result of anti-tax sentiment, though I'm
| still not convinced it is lobbying itself that does this.
| Instead, the same sort of folks go into politics and
| directly get involved in making laws about this sort of
| thing. Of course, this is built on a long-standing anti-
| tax sentiment in the US that folks tie into an "origin
| story" of sorts (taxation from England minimally helped
| spur the revolution).
|
| And they do have a point: The more of a pain a tax is for
| the taxpaper, the more they think about disliking taxes.
| But it doesn't realistically go that far: We do all sorts
| of things to make paying taxes easier for folks. Gasoline
| prices include all taxes (from federal down to sales
| tax). Payroll taxes are deducted from your paycheck.
| Stores collect sales tax instead of you sending it to the
| government. Prepaid phone plans still have taxes included
| and renters don't pay for property tax directly.And so
| on.
| ceejayoz wrote:
| I'm not sure why you're being downvoted. In 2005, Grover
| Norquist had this to say:
|
| > Doing taxes keeps citizens aware of the tax burden
| imposed upon them by the government.
|
| https://theweek.com/articles/825902/how-republicans-
| trapped-...
| noir_lord wrote:
| In the UK if you are an employee of one company you get
| PAYE (Pay as You Earn) which is dealt with by your
| employer.
|
| I'm 40 and have never had to do a tax return, I get a
| summary at the end of the year and a breakdown on each pay
| slip and that's pretty much it.
|
| It's one of those silent services that government does so
| well it pretty much disappears into the background.
| oconnor663 wrote:
| Maybe this is already clear, but in the US "tax
| witholding" done by your employer is mandatory for most
| people. So all the paperwork we do at filing time is just
| to compute the _difference_ between what was withheld and
| what you owe.
| andybak wrote:
| In the UK that's normally also done for you.
|
| Only in exceptional circumstances does a normal waged
| employee have to have anything to do with taxes.
|
| Until I was self-employed in my 30s I never filled out a
| tax form. Some people never do.
|
| You're being swindled in the US.
| supernova87a wrote:
| Given how much our system taxes based on brackets and
| deductions, etc that are only apparent at the end of a year,
| that is probably not possible for the bulk of tax revenue.
| Also, people have many, many different thoughts on VAT, etc.
| IshKebab wrote:
| Erm, loads of countries don't require employees to file
| taxes. Your employer takes care of it for you.
|
| If you have an unusual tax situation you have to do it
| still, but 99% of people just have 1 job with 1 salary.
| 3327 wrote:
| Finally. Turbotax is fraud on so many levels I cannot even get
| started.
| sriram_sun wrote:
| Intuit has already done the math. The actual profits from this
| practice will far outweigh the ensuing fines with "No admission
| of wrongdoing".
| rietta wrote:
| I just buy one copy of TurboTax Home and Business each year and
| then everyone in my family uses it one at a time and free Federal
| efile. My parents both have different LLCs, I have a business, my
| sister has a business. We print and mail state returns because no
| reason to pay yet again for each State efile. I've become the
| defacto family accountant/keeper of tax file backups.
| wffurr wrote:
| What's the least scammy alternative to TurboTax? I keep paying
| for it every year because it's what I'm used to, and I have
| capital gains and all that junk so I can't free file.
| mindslight wrote:
| Torrent turbotax, run it in a VM without net access, and
| physically mail your tax return in. Or if your figures are
| relatively simple, just fill out the forms yourself. It helps
| to know how the formulas work out for tax avoidance purposes,
| anyway.
| amir734jj wrote:
| Man, that was savage!
| Kalium wrote:
| CreditKarma lets you file capital gains and so on for free.
| mkskm wrote:
| Make sure to opt out of personal info sharing before doing
| this. There's a subtle disclosure permitting selling info to
| affiliates before enrolling in their tax program that can be
| declined (it looks required at first glance but isn't).
| adeledeweylopez wrote:
| And they're getting bought by Intuit (TurboTax)...
| mkskm wrote:
| I've been using Taxfyle recently. It can be a little more
| expensive but saves time since all you have to do is upload
| forms for a CPA to fill out. There's also TaxAct if you want to
| do it yourself. I refuse to give money to Intuit.
| mikem170 wrote:
| I'll put in a good word for https://olt.com
|
| I've been using them for years. It would cost most people
| $10-20 for fed 1040a and state taxes, extra help is available
| for extra money. In an income tax-free state I paid $0 to file
| my federal return and have it direct deposited to my bank
| account. No dark patterns.
|
| And their privacy policy was decent. I was not happy with what
| I saw on Intuit's site, especially given the data I'd be
| trusting them with.
| beckler wrote:
| Don't know how this isn't mentioned already, but I've used
| FreeTaxUSA for the last two years, and I've really enjoyed it.
| It does not hold your hand as much as TurboTax, but they'll
| walk you through every step. I still pretty easy to use, plus
| it's rather affordable.
|
| https://www.freetaxusa.com/
| zie wrote:
| You can pay a tax professional for about the $100 that turbo
| tax apparently charges.
|
| There is an OSS tax solver here:
| https://opentaxsolver.sourceforge.net/
|
| Only does IRS, not state, works fine for me so far.
| Bedon292 wrote:
| For some reason that link doesn't work foe me (may be a DNS
| issue on my part). Appears to be here:
| https://sourceforge.net/projects/opentaxsolver/
|
| And it does seem to have a few states, at least in text form.
| tomjakubowski wrote:
| The link needs http:// to work. In 2020 Sourceforge doesn't
| host project webpages on https.
|
| http://opentaxsolver.sourceforge.net/
| gkfasdfasdf wrote:
| Obligatory mention of https://www.turbotaxsucksass.com/, which
| takes you directly to _real_ free file option of each major
| online tax prep site, bypassing all the misleading not-actually-
| free filing options that the sites loudly advertise.
| swiley wrote:
| I thought the official IRS form filler was discontinued? Does
| this just take you to another intuit competitor?
|
| EDIT: it just sends you to the free version of turbo tax and
| has links for the competitors heh
| TheJoeMan wrote:
| What's crazy is there is a tier of Turbotax called "Free"
| (not free if you make almost any money) and "Free File"
| (actually free)
| masklinn wrote:
| > I thought the official IRS form filler was discontinued?
|
| IRS's own service was discontinued after an agreement with
| tax preparation companies that _they_ would provide such a
| service (the IRS Free File Program) if your AGI is below 69k
| (nice).
|
| Which they do, but try to hide as much as they can via
| negative SEO and various dark pattern, so that you
| unknowingly get directed towards "free" offers which quickly
| require you to pay.
|
| There's plenty of information all over the net. And I thought
| I remembered LWT doing an episode on that recently, but
| apparently it was Patriot Act... in what I now learn was the
| last episode, that _would_ certainly explain why it 's been
| so long I've seen an episode pop up in my feed.
| pmiller2 wrote:
| Unfortunately, _Patriot Act with Hasan Minhaj_ was
| canceled[0]. The last episode was June 28, 2020: "Why
| Doing Taxes Is So Hard"
|
| It's too bad. I thought it was a really worthwhile show.
|
| ---
|
| [0]: https://variety.com/2020/tv/news/hasan-minhaj-patriot-
| act-ca...
| masklinn wrote:
| Yes, that's what I meant by "last episode". I should
| probably have written "final" or "ultimate".
| ourmandave wrote:
| Ironically, for most people the IRS has a copy of most your forms
| (W2, 1099s, etc.) already and can do your taxes for you if you
| want.
| owenmarshall wrote:
| I work and live in different states, but those states have a
| reciprocal agreement: any local taxes I pay to my employer's
| state are a credit for my home state income taxes.
|
| Last year a Turbotax glitch (combined with my inattentiveness!)
| accidentally marked my local taxes as belonging to my home
| state - this made it appear like I paid significantly too much
| for local taxes. I filed and happily but surprisingly expected
| a large refund. Instead, I received a more typical refund and a
| letter from the Dept. of Revenue showing that the state had
| amended my return to match their records and that no further
| action was required.
|
| My taxes could be this simple every time. What a bummer that
| they aren't.
| ourmandave wrote:
| I moved from IL to IA one year and had to file both states.
|
| I did it by hand and screwed up the IA one somehow. =(
|
| They eventually sent me the corrected form and a refund I was
| actually due.
|
| It was like drawing the Monopoly card "Bank error in your
| favor. Collect $200."
| chungalunga wrote:
| Yep, they'll eventually send you a bill if you owe.
|
| For some strange reason they won't send you a refund if you're
| eligible.
| briandear wrote:
| Not sure I understand the hate for TurboTax. Literally not a
| single person is forced to use it. I do use it and it's a very
| good product for the most part.
|
| Perhaps energy should be directed at the actual tax code
| complexity rather than software built to help navigate filing.
|
| Ted Cruz's tax plan would have practically eliminated the need
| for TurboTax-type software. https://taxfoundation.org/details-
| and-analysis-senator-ted-c...
|
| But, let's not forget what Milton Friedman had to say about tax
| reform: https://www.youtube.com/watch?v=TruCIPy79w8
| Izkata wrote:
| > Perhaps energy should be directed at the actual tax code
| complexity rather than software built to help navigate filing.
|
| Two years ago the paper form for standard federal 1040 was cut
| to about 1/4th its previous length. It's happening, just
| slowly.
|
| (Yes, I still use the paper forms yearly for both federal and
| state. I've never seen any software as necessary for filing
| taxes...)
| [deleted]
| save_ferris wrote:
| > Perhaps energy should be directed at the actual tax code
| complexity rather than software built to help navigate filing.
|
| It's hard to tackle the complexity of the tax code when the
| company you're defending here has spent millions to keep it
| complex and out of the hands of the government.[0]
|
| The "tax complexity" argument is a red herring when talking
| about tax prep. The US government could absolutely offer free
| tax filing services to taxpayers without the help of private
| industry and also without needing to simplify the tax code. I'm
| not saying that the complexity of the tax code isn't a problem,
| but it's out of scope here. The idea that the complexity of the
| US tax code standing in the way of better filing options for
| taxpayers has absolutely no merit when companies are spending
| millions to fight legislation that gives the government the
| ability to offer its own tax prep software.
|
| This is rent-seeking behavior on the part of private industry,
| plain and simple.
|
| 0: https://www.propublica.org/article/filing-taxes-could-be-
| fre...
| twblalock wrote:
| I don't blame lobbyists for anything. I blame the politicians
| for doing what the lobbyists asked for.
| StillBored wrote:
| And just to add to this, the IRS software could be
| significantly easier to use than the commercial offerings.
|
| That is because they could pre-populate much of the
| W2/1099/stock sales/etc data since its all being reported to
| the IRS from other organizations. For the vast majority of
| people it could be as simple as logging into a web site and
| clicking "no" to a bunch of questions like "did you have more
| than 20k of medical bills last year", and then "I accept" at
| the bottom where it prints your final tax. As I understand
| it, that is how some other countries handle their taxes..
| syshum wrote:
| >>>And just to add to this, the IRS software could be
| significantly easier to use than the commercial offerings.
|
| Someone has never worked in government contracting or
| developing Software from Government Committee
|
| a IRS Tax Software would look more than the universally
| hated Unemployment Systems, or the government healthcare
| markets
|
| Not a easy to use streamline system
|
| If you want something to be inefficient, have the
| government do it
| colejohnson66 wrote:
| Here's the thing though: the IRS _already_ has all the
| information they need for a majority of the population.
| Why does everyone need to fill out forms themselves only
| for the government a few years later to say you did it
| wrong?
| toomuchtodo wrote:
| Because some people are irrationally biased against
| government providing services or collecting taxes in
| general. These are ingrained belief systems being
| challenged.
| jaywalk wrote:
| Ridiculous thing to say. I am a small government person,
| and I believe taxation is theft. However, I am a realist
| and so I recognize that taxes are part of our reality. I
| am 100% in favor of the IRS making it as easy as possible
| for people to do their taxes, because they already have
| 99% of the info needed.
| kevin_thibedeau wrote:
| > I believe taxation is theft
|
| Then please stop using the things we fund with them.
| Roads, GPS, etc.
| jaywalk wrote:
| I'm funding them too, so no.
| Octoth0rpe wrote:
| > I believe taxation is theft
|
| > However, I am a realist
|
| Choose one.
| jaywalk wrote:
| I have no idea how you see those two things as mutually
| exclusive.
| Ericson2314 wrote:
| If taxation is theft, so are the vast majority of jobs.
| jaywalk wrote:
| I have a choice of jobs, including working for myself. I
| have no choice in paying taxes.
| ardy42 wrote:
| > I have a choice of jobs, including working for myself.
| I have no choice in paying taxes.
|
| You totally do have choice to not pay your taxes, just
| like you have a choice to not pay your rent or mortgage
| or renege on other kinds of private contracts. The making
| those choices may lead to outcomes that aren't good for
| you, but it doesn't mean you have no choice.
| Ericson2314 wrote:
| You can move to a place with no income tax. Now, you
| might argue that is impractical, but so getting a non-
| shit job for many people.
|
| I happen to think the government should impose taxes, and
| tax evasion is a moral failing, but I also recognized
| people were born into a contract with the government, and
| I'm not going to argue that's fair.
| syshum wrote:
| The fact is that the government, like a thief, says to a
| man: Your money, or your life. And many, if not most,
| taxes are paid under the compulsion of that threat.
|
| The government does not, indeed, waylay a man in a lonely
| place, spring upon him from the road side, and, holding a
| pistol to his head, proceed to rifle his pockets. But the
| robbery is none the less a robbery on that account; and
| it is far more dastardly and shameful.
|
| --Lysander Spooner
| krapp wrote:
| > The fact is that the government, like a thief, says to
| a man: Your money, or your life. And many, if not most,
| taxes are paid under the compulsion of that threat.
|
| Yes, but I like civil society, infrastructure, paved
| roads and what little social safety net we have in this
| country, so...
| jaywalk wrote:
| So you see taxes as necessary. That's fine. It doesn't
| invalidate the point being made.
| krapp wrote:
| But are taxes really theft if I'm willing to pay them and
| I'm getting something of value back in return?
|
| Maybe it's extortionate, but the entire premise of
| government and the social contract is extortionate to a
| degree.
| syshum wrote:
| Ahh yes, the running joke of "But who will pave the
| roads", this has be debunked so many times it is now a
| meme in libertarian circles yet people still bring it up
| anyone some mentions that income based taxation is theft.
|
| Sad reality is most private roads are better maintained
| than the public roads which driving to my home everyday
| is like a obstacle course.
|
| Then there is the fact the vast majority of Roads (in the
| US) are paid for not with Income taxes but with User
| Fee's such as Gas Taxes, Car Registration, Wheel Taxes,
| Tire Fee's, Sales Taxes on Cars, and many other sources
|
| But hey let keep up with the narrative that with out
| income taxes we would all be driving on mud paths
| ardy42 wrote:
| > and I believe taxation is theft
|
| Money, taxes, and the crime of theft are all creatures of
| the law. Taxes aren't theft because that would be a
| literal contradiction. Taxes are just part of the rules
| about how money operates.
|
| I should also note that 1) the law isn't just what some
| individual or other feels is natural, 2) I'd imagine that
| primitive law that defines theft also defines obligations
| to the community (which are analogous to taxes).
| karlp wrote:
| What's the point of your belief if you know it can't
| happen?
| scott_s wrote:
| You may think it's a ridiculous thing to say, and I also
| think it's a ridiculous thing to say. But Grover Norquist
| uses this exact line of reasoning when arguing against
| the IRS pre-populating taxes - and Grover Norquist has
| enormous influence on what policy positions many
| Republicans take regarding taxes.
|
| edit: transcript from an NPR interview where Norquist
| takes this position:
| https://www.npr.org/transcripts/521132960
| save_ferris wrote:
| > If you want something to be inefficient, have the
| government do it
|
| Would you rather have a system that's inefficiently built
| by a government or one efficiently built by a private
| company that illegally extracts fees from users, as the
| FTC alleges Intuit has done? What's the point of being
| obsessed with "efficiency" when the company screws end
| users anyway?
| syshum wrote:
| That is a false dilemma, I know this will shock you, but
| it is possible to have private companies that do not
| illegally extract fees from users, and at the same time
| not have government created software....
|
| I support the FTC's actions to go after intuit, but I
| have filled my taxes every year for many decades and not
| used Turbo Tax.
| StillBored wrote:
| I have, and sometimes it goes well, but you don't hear
| about those cases.
|
| OTOH, you have to remember that the IRS is already
| developing a fairly complex bit of software which allows
| the tax companies to "e-file" the tax returns. Then they
| are verifying those companies results in house against
| the data they already have. At which point, apparently
| the returns are either rejected, or assigned some kind of
| weight for a human inspector to come along and review for
| whether a formal audit should be undertaken.
|
| So, its quite possible that cutting out the e-file
| portion and replacing it with a webUI actually simplifies
| things.
| d4rti wrote:
| HMRC manage to do this just fine in the UK.
|
| I'm sure many other governments around the world do the
| same.
| ciarannolan wrote:
| > a IRS Tax Software would look more than the universally
| hated Unemployment Systems, or the government healthcare
| markets
|
| Consider that your opinion on what is "universally hated"
| is mostly shaped by the sources of information that you
| consume. Yours happens to be wrong. Overall the country
| views ObamaCare ~50% favorably, with some specific parts
| close to 90% approval.
|
| > Following Republican efforts to repeal the Affordable
| Care Act (ACA) in the summer of 2017, KFF Health Tracking
| Polls have found a slight uptick in overall favorability
| towards the 2010 health care law. The most recent KFF
| Tracking Poll shows over half of the public (52%) hold
| favorable opinions of the ACA while about four in ten
| (41%) hold a negative opinion of the law. [1]
|
| > Some 55% of Americans support the ACA, a record high
| since the law went into effect a decade ago, according to
| a recent report by the Kaiser Family Foundation, while
| 37% of the 130,000 respondents in the nationally
| representative poll hold unfavorable views. [2]
|
| > But the election of Donald Trump and efforts by
| Republicans to repeal the ACA have boosted the law's
| popularity. Since November 2016, on average, 49.4% of the
| public has had a positive view of the law, compared with
| 41.6% who view it unfavorably. [3]
|
| [1] https://www.kff.org/health-reform/poll-
| finding/6-charts-abou...
|
| [2] https://www.marketwatch.com/story/the-affordable-
| care-act-is...
|
| [3] https://www.ajmc.com/view/how-has-public-opinion-on-
| the-aca-...
| syshum wrote:
| >>Consider that your opinion on what is "universally
| hated" is mostly shaped by the sources of information
| that you consume.
|
| Clearly I was not commenting on ACA but on the Websites
| people use to Sign up for Government Subsidized Plans
| under the ACA which have continually been reviewed poorly
| by the people needing to use them.
| rayiner wrote:
| > Consider that your opinion on what is "universally
| hated" is mostly shaped by the sources of information
| that you consume. Yours happens to be wrong. Overall the
| country views ObamaCare ~50% favorably, with some
| specific parts close to 90% approval
|
| I support the ACA, but when you implement the benefits in
| a law and repeal or ignore most of the new taxes and
| mandates, that will happen.
| ciarannolan wrote:
| I thought just the individual mandate was struck down by
| the SCOTUS. What other pieces make up most of the new
| taxes and mandates that were repealed or ignored?
| areyousure wrote:
| The individual mandate was _upheld_ by the SCOTUS in
| 2012: https://en.wikipedia.org/wiki/National_Federation_o
| f_Indepen...
|
| Rather, the individual mandate was zeroed out in 2017: ht
| tps://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017
|
| The Cadillac tax has been delayed, seemingly
| indefinitely:
| https://en.wikipedia.org/wiki/Cadillac_insurance_plan
|
| The employer mandate was delayed.
|
| The Independent Payment Advisory Board was canceled: http
| s://en.wikipedia.org/wiki/Independent_Payment_Advisory_B.
| ..
|
| The nutrition labeling requirements were delayed from
| 2010 to 2018.
|
| There are many other more technical provisions that have
| been delayed as well. It is easy to find many relevant
| sources online, though it's hard to keep them up to date
| because many delays just continue! https://cgsnet.org/ckf
| inder/userfiles/files/ACA_Delays_at_a_...
| ciarannolan wrote:
| Oh man, I was way off. Thanks for this.
| freeone3000 wrote:
| Okay? There's no reason laws have to have good and bad
| parts, like a fundamental yin-yang. You can simply write
| laws without the bad parts.
| likpok wrote:
| The ACA must have good parts and bad parts because the
| mandate makes the numbers work. Guaranteed-issue
| insurance doesn't work if healthy people can opt out
| (because you can just buy insurance after you get sick
| which makes the risk-pooling idea of insurance not work).
| freeone3000 wrote:
| Well, you can't, because of defined enrolment periods and
| coverage delay periods, and that it's impossible to tell
| ahead of time whether given insurance covers a given
| condition.
|
| In addition, medical insurance makes no sense as a risk-
| pooling strategy, as everybody consumes some medical care
| annually, and the average cost of care consumed is
| greater than the amount most people can pay. There has to
| be something else going on.
| rayiner wrote:
| There is, because we live in a finite world. Everything
| is about trade-offs. In the case of ACA, it's benefits on
| one hand, and the taxes (and the mandate) that pay for
| those benefits on the other hand.
| hellotomyrars wrote:
| You mean those universally hated unemployement systems,
| the like one in Florida which was intentionally set up to
| fail and be as hard as possible to qualify for and
| interact with so that the real, hard-working Americans
| don't have to pay to support those deadbeat lowlifes who
| don't have a job?
|
| The government is more than capable of accomplishing
| tasks. There is no inherent reason why government is
| incapable of doing anything but a corporation is capable
| of doing everything!
|
| If you design a system to fail from the outset and it
| doesn't work, then they achieved the goal. So really, the
| government nailed it. And the better part is they nailed
| it for people who feel the way you do. It's literally a
| self-fulfilling prophecy of politically-motivated people
| who don't believe in the ability of the government to get
| anything done working as hard as possible to make sure
| that the government doesn't do a good job.
| prepend wrote:
| In addition to the lobbying activities that, naturally, garner
| hate, I dislike them for just being a crappy marketing-driven
| company that is constantly trying to up sell.
|
| I've used them for about 20 years and every year it's a hassle
| to find a reasonable price, figure out what they call the
| product I need each year. I spend as much time trying to figure
| out what to buy and clicking "no" as I do filing my taxes.
|
| This is as a customer that uses them once a year and that's it.
|
| If they just sold a clean product, then it would be fine. But
| they are asshole marketing / rent seeking quite a bit.
|
| Lots of non-savvy friends buy the $200 version instead of the
| free or $50 version because of the way intuit markets within
| their product about buying audit protection and what not.
|
| It also infuriates me that their boxes software costs less than
| the web site. I think companies that sell physical copies of
| software for less than the website version are jerks.
| Obviously, they can do this, it's legal, and people fall for
| it. But I would feel bad doing this and I think anyone who does
| this is a bad person.
|
| Therefore, I hate intuit and will switch in an instant when I
| can.
| shados wrote:
| There would be no problem with TurboTax if it was a product
| that solved a real problem. If the complexity of the tax code
| and the process to file your taxes were 100% a problem created
| by the federal government and the states. It works pretty well,
| it's not too expensive, it has free options, not what's to
| like?
|
| It isn't like that though. The IRS has nearly all the pieces it
| needs, if not all the pieces, to create a system like the UK,
| where they just send you your return and you sign it unless you
| think there's a mistake. But that system doesn't exist because
| of companies like Intuit who lobby hard to prevent it from
| existing.
|
| In essence, Turbotax is solving a problem that Intuit is
| creating (or at least lobby to prevent anyone from fixing it).
| jeffbee wrote:
| > The IRS has nearly all the pieces it needs
|
| Some things would need to change to make this statement true.
| Stock brokers and portfolio managers would have to be forced
| to stop reporting gains without basis. Without the basis the
| IRS has no idea what your gains were.
| shados wrote:
| Aren't stock brokers forced NOT to include the basis right
| now?
|
| Fidelity reports the basis in a supplement section in the
| same damn document. Moving them together would be trivial,
| but I've been told the law is forcing them to do it this
| way (they didn't tell me that, I just read that somewhere.
| Not sure if it's true).
|
| As someone said, almost no one has investments. If you
| remove 401k, it's a tiny fraction of people. If the only
| thing I'd have to do to file my taxes would be going
| online, finding the list of my sales and needing to add the
| cost basis then click submit, it would still be a huge
| improvement compared to what we have now.
|
| Still, it's a problem that's pretty easily solved.
| scott_s wrote:
| Only about half of Americans have _any_ investment in the
| stock market - and yes, that includes 401ks. That means
| more than half the population can file taxes without
| information from brokers or portfolio managers, which means
| not having that information is not a good reason to not do
| this.
| jeffbee wrote:
| For people with simple tax returns, aren't they already
| using the 1040 EZ? Doesn't seem like you'd use TurboTax
| unless you were itemizing or had a Sched. D to fill out.
| scott_s wrote:
| For many years, I filled out a 1040 EZ, and I used
| TurboTax to do it. For me, it wasn't about ease of
| _filling out my taxes_ , as they were trivial. It was
| about ease of _filing my taxes_ , as it was all online
| and I didn't have to physically mail anything.
|
| So, yes, such people are already using the simplest
| possible form, but ease of filing is a big deal, and I
| suspect many people are like me and use online filing
| software for that just as much as ease of filling out the
| forms.
| jeffbee wrote:
| I guess I'm so old that my personal recollection of the
| 1040EZ was that you got it in the mail, filled it out,
| and mailed it back. There was a time wen TurboTax existed
| and e-File did not yet exist, so filing wasn't one of the
| benefits of it.
|
| I also only just realized that the IRS no longer just
| mails everybody a form 1040 and instruction book.
| syshum wrote:
| I 100% agree, to bad all you will get in response to your
| comment is how it is evil companies that prevent the noble and
| universally good government from helping the people.
|
| Unfortunately very few people seem to understand that
| government, intrinsically, is inefficient and bad at everything
| it does. This can not be avoided or changed it is the natural
| state of a monopoly.
|
| They seem to be able to recognize that when a large corporation
| that has become monopoly that is bad for people, however they
| fail to recognize that government is the worst kind of monopoly
| as unlike a corporation, they have the legal authority to put
| you in a cage if you refuse them, and kill you if you resit the
| governments attempt to put you in that cage.
| save_ferris wrote:
| > Unfortunately very few people seem to understand that
| government, intrinsically, is inefficient and bad at
| everything it does.
|
| This is a laughably false statement. It's easy to find
| stories of government projects that came in ahead of schedule
| and under budget, but you have to look for them because those
| stories don't get nearly as much attention as the inverse.
|
| Take the Hoover Dam, for example. That was one of the most
| ambitious infrastructure projects in American history, and
| came in years ahead of schedule, and millions under
| budget.[0] Google around infrastructure publications and
| you'll find dozens more stories like this.
|
| To say that every thing a government does is bad is to
| fundamentally ignore reality, which is that no, not
| everything the government does is bad. You can never be taken
| seriously making sweeping generalizations like that.
|
| 0: https://www.marketplace.org/2010/05/28/why-we-might-not-
| have...
| ultrarunner wrote:
| I'm not here to argue that "everything the government does
| is bad" because I think it's a very nuanced situation. That
| said, I feel like the Hoover Dam needs to be mentioned in
| the same breath as Hoovervilles, and as a precursor to the
| Great Depression.
|
| Arguably, this high-level decision making is the only part
| that the government _did_ , and should receive credit for,
| as the Six Companies consortium actually executed the
| construction.
|
| It's unfortunate that these arguments often involve people
| talking past one another; governments (being made up of
| people) are obviously capable of good outcomes. They're
| also capable of generating bad or inefficient outcomes.
| Those two latter points are where I think there is value in
| the discussion: is a governmental act _moral_ , and does it
| increase _efficiency_ (in the sense of humanity prevailing
| against its default state).
| save_ferris wrote:
| > Arguably, this high-level decision making is the only
| part that the government did, and should receive credit
| for, as the Six Companies consortium actually executed
| the construction.
|
| I agree with this, but couldn't it also be applied
| inversely? If a government project experiences cost
| overruns due to a private contractor poorly estimating
| the project, shouldn't blame also be placed on said
| contractor? Success is so often privatized and failure
| socialized.
| ultrarunner wrote:
| Sure, absolutely, and this is a good point. However, much
| of that comes from changing requirements or an
| unrealistic bid process to begin with. Shady business
| practices by government contractors should absolutely be
| scrutinized. It's a complicated undertaking all the way
| around.
| syshum wrote:
| What is laughable if the fact you picked a make work jobs
| program like the Hover Damn to highlight government
| efficiency...
|
| The entire purpose of project was because the government
| needed to find something for thousands of unemployed men to
| do. It was literally the definition of "busy work"
|
| Further the budget was massively reduced because they did
| not have to concern themselves with minor things like
| environmental impact, or worker safety...
|
| I hope that is not your only shinning example of government
| as it is very much tarnished by the stain of blood
| codegeek wrote:
| My argument is that Tax calculation should NOT be so complex
| that we need _any_ entity (Govt or Private) to actually run
| it. Why don 't we simplify the tax ssytem like other
| developed countries instead ? E.g. I worked in Hong Kong for
| aabout 2 years and for my taxes, the Govt. already calculated
| everything and I just had to check some boxes. Why cannot we
| do that here in the United States ? And Yes, I am aware of
| things like complex deductions etc but still, majority of
| Americans don't have that problem.
| vonmoltke wrote:
| The problem with the US tax code itself is legislation and
| corruption via tax policy. Enactment of tax credits and
| penalties is one of the few areas Congress constitutionally
| has almost unfettered authority. It's much easier to
| encourage or discourage a behavior that way than to pass
| conventional legislation and risk not being able to use the
| Get Out of Constitution Free(tm) card (aka, the Commerce
| Clause).
| triceratops wrote:
| > government, intrinsically, is inefficient and bad at
| everything it does
|
| And yet, we need it to work well if we want things like
| property rights, functioning markets, public safety, law and
| order and so on. So why not focus on how it could become
| better, instead of giving up on it?
| save_ferris wrote:
| Even better, the think tank attached to the article you linked
| to has an article explicitly rejecting the idea of pre-filled
| tax returns for taxpayers.[0]
|
| So how exactly does Ted's plan to simplify the tax code have
| anything to do with filing in the first place if the
| organization you're backing up your argument with doesn't even
| support doing away with private tax prep? You think the tax
| code is gonna be simplified to the point that Intuit just lays
| down and says "welp, no more money to be made here, the market
| solved itself out of a revenue stream"?
|
| 0: https://taxfoundation.org/pre-filled-forms-solution-tax-
| comp...
| tekknolagi wrote:
| People hate TurboTax because Intuit spends obscene amounts of
| money lobbying to keep the tax code complicated so they have a
| market.
| masklinn wrote:
| They also spend obscene amounts of money killing online
| filing being provided by either state or fed.
|
| They spent more than 1.2 million in direct lobbying against
| California's online tax preparation & declaration system
| pilot (ReadyReturn) between 2001 and 2010.
| milofeynman wrote:
| The hate comes from anyone who understands intuit lobbying
| against the interest of the US taxpayer. Instead of the US
| government acting like every other 1st world government and
| giving us a pre-calculated tax bill since they already know
| what we owe we're forced to spend hours tracking down documents
| and hoping we didn't mess up and get audited.
|
| https://www.nytimes.com/2017/04/14/opinion/filing-taxes-in-j...
| vonmoltke wrote:
| > Instead of the US government acting like every other 1st
| world government and giving us a pre-calculated tax bill
| since they already know what we owe
|
| They _don 't_ know what a given taxpayer owes. They can
| estimate based on various filings, but there is some stuff
| that is only reported by the taxpayer when filing. That said,
| it isn't an excuse to push all the work onto the taxpayer
| when almost all of what a typical taxpayer needs to fill out
| could be pre-populated.
|
| > we're forced to spend hours tracking down documents and
| hoping we didn't mess up and get audited
|
| That the IRS audits taxpayers is evidence that it doesn't
| _ever_ conclusively know what some people were supposed to
| pay in a given year, let alone by 15APR of the following
| year.
| fyz wrote:
| 2017 story on how Intuit killed the ReadyReturn program for
| pre-calculated returns for California.
|
| https://priceonomics.com/the-stanford-professor-who-fought-t...
|
| https://www.npr.org/sections/money/2017/03/22/521132960/epis...
| spicymaki wrote:
| The government (IRS) gets most of the data and can make a
| reasonable tax estimate. They should send us a bill. This find
| the loophole game is really counter productive and time
| consuming.
| klmadfejno wrote:
| God I hope this suit is successful. Lots of people here are
| discussing the regulatory trap they've got, and that's a big
| problem. But the actual problem mentioned in the suit is
| deceptive marketing. TurboTax is the worst in this regard.
|
| Last year, I, at every step of the process, declined the
| expensive options that say "maybe you'll save more money if you
| permanently switch into this paid mode". Yet after a couple hours
| of filling out forms, they said at the end that it wasn't
| possible to file using the free version, and that I would have to
| pay a couple hundred dollars. That ticked me off. They have all
| of the information required to figure this out much earlier in
| the process (income), yet they continue to allow you to pick the
| free tier up until the very end where the tedium of starting over
| with a different service is too high. Fuck em.
|
| Their UI is very nice though, especially for guiding people
| through a process that they almost intrinsically hate.
| scott_s wrote:
| > Their UI is very nice though, especially for guiding people
| through a process that they almost intrinsically hate.
|
| Which is evidence towards the idea that if they _wanted_ to
| make choosing the free or paid versions easy and obvious which
| was best for each person, they could.
| c22 wrote:
| This happened to me too. I just printed out the return they
| generated and mailed it in myself. This is actually how tax
| preparation software used to always work and it definitely
| wasn't free back then.
| Cactus2018 wrote:
| This year I was unable to get to the print-out without paying
| tvb12 wrote:
| If I remember correctly, you have to go through the IRS
| freefile page (here: https://apps.irs.gov/app/freeFile/) to
| get to the "real" free version of turbotax. The link to the
| "free edition" on the main page of their site, confusingly,
| is something else. Turbotax's income limit for free filing
| is really low, though. Max income of $36,000.
| squeaky-clean wrote:
| I make more than that and didn't have to pay to file
| electronically. I downloaded turbotax through the iOS app
| store, using the app store search. Is this specifically
| for 1099 workers or something? (I get a W-2)
|
| Edit, did some searching and it's completely free if
| you're able to file via a 1040EZ, which I'm pretty sure
| was my method. I don't know too much about tax filing
| though, so maybe I'm confused about things (I mean, I'm
| definitely confused about tax things overall, haha). I'm
| 100% positive TurboTax didn't take any additional money
| from my refund though.
| cactus2093 wrote:
| Seems like TurboTax is probably not worth the hassle of trying
| to use for free. They try to steer you at every turn into
| accidentally accepting the paid features, and if you manage to
| make it through the maze there doesn't really seem to be much
| left that makes them better than any of the simpler competitors
| if you stick to the free tiers - no saving your information
| year over year, no automatically importing the super complex
| statements from robo-advisors like Betterment, etc.
|
| It also seems like most software engineers won't qualify for
| free file anyway, because it has an income limit of $69,000 a
| year as far as I can tell.
|
| One thing I genuinely wonder, at what point will digital/web-
| based services become the default for handling information by
| the government and every other large institution? Will it ever
| happen in my lifetime? Why are we still having to pay for 3rd
| party software to fill out physical forms? Even docusign, while
| it has become very prevalent for most contracts these days and
| is very convenient, is still requiring that you fill out a
| scanned image of a physical piece of paper, instead of just
| making the contracts web-based. Why?? Why doesn't the IRS just
| have a web app like turbotax for everyone to file taxes
| through? And if the answer is that the tax code is way too
| complicated that it's prohibitively expensive for the
| government to build a site as comprehensive as Turbotax, then
| fix it!
| pc86 wrote:
| > _And if the answer is that the tax code is way too
| complicated that it 's prohibitively expensive for the
| government to build a site as comprehensive as Turbotax, then
| fix it!_
|
| "Fix it" only makes sense for bugs. It doesn't make sense for
| features. TurboTax, accounting firms, entire professional
| organizations (CPAs) live off of the fact that the tax code
| is hard to understand. Maybe it needs to be difficult to
| properly align incentives. Maybe it doesn't. But it's
| absolutely intentional.
| tssva wrote:
| Because Intuit, H&R Block and others have spent enormous
| amounts of money and time lobbying federal and state
| legislatures and executive agencies to ensure they don't.
|
| My state had developed a free filing system and had
| successfully tested it with selected tax filers for a couple
| of years. It was due to go live the following year for all
| state tax filers. Intuit and others successfully lobbied the
| state legislature and newly elected governor to ban the state
| from moving forward with deploying a solution.
| glenneroo wrote:
| Lobbying plus this bit from the article:
|
| > Under a longstanding agreement with the IRS called Free
| File, Intuit and other tax prep companies promised to offer
| free products to most Americans; in exchange, the IRS
| agreed not to create a free government tax filing option
| that would compete with the industry.
| morvita wrote:
| How do you think that agreement came about? Hard lobbying
| from the tax prep industry.
| neilfrndes wrote:
| > Why doesn't IRS have a web app like Turbotax?
|
| Because of great lobbying by Intuit. This planet money
| episode goes into the details: https://www.npr.org/sections/m
| oney/2019/04/03/709656642/epis...
| qppo wrote:
| It's the wrong question too. Why do we have to file a tax
| return at all? Shouldn't the government be filing a tax
| return with us instead?
|
| Same answer of course.
| bityard wrote:
| They answer that in the NPR podcast the parent linked to.
| But it essentially boils down to the fact that taxes are
| constitutionally voluntary yet tax evasion is illegal.
| qppo wrote:
| I'm no constitutional scholar but I don't think the IRS
| is constitutionally prohibited from sending me a filled
| out tax form and asking me if it's correct.
| koolba wrote:
| It's also FUD about how complex, or really how simple,
| doing your own taxes can be. Filling out a 1040 for the
| overwhelmingly common situation of a single job is a cake
| walk. The vast majority of people would be taking the
| standard deduction now as well.
| HumblyTossed wrote:
| > Why doesn't the IRS just have a web app like turbotax for
| everyone
|
| Because capitalism blah blah. The government isn't supposed
| to compete with businesses.
| loosescrews wrote:
| I have tried nearly all of the DIY tax offerings out there.
| CreditKarma has a relatively new completely free offering that
| I feel rivals TurboTax in ease of use. I also feel that it is
| superior to paid offerings such as H&R Block.
|
| Another completely free offering is freetax.com. I used them
| for a few years, and while not quite as easy to use, it works
| well.
|
| Note that both of these free offerings include free state tax
| filing and have no income limits or up sells.
| ceejayoz wrote:
| > CreditKarma has a relatively new completely free offering
| that I feel rivals TurboTax in ease of use.
|
| That's why Intuit bought them. Don't expect it to stick
| around. https://techcrunch.com/2020/02/24/intuit-credit-
| karma/
| bityard wrote:
| Did you mean freetaxusa.com? (freetax.com goes to a site
| called DIY Tax which doesn't look like they offer free
| returns anymore.)
|
| I've used freetaxusa.com for the past couple of years. They
| don't do the same level of hand-holding that TurboTax and
| TaxAct are famous for. So what I have done in the past is
| fill out the tricky parts in TaxAct using a free account and
| if the number look right, copy them into FreeTaxUSA.
|
| I used to use TaxAct until their prices, tiers, and upsells
| got to be flat-out usurious. FreeTaxUSA federal filing is
| free but you have to pay a small (around $15) fee if you want
| to e-file for state. _That_ is a price I can live with. I
| don't mind paying it at all if it means escaping the TurboTax
| and TaxAct traps.
| dragontamer wrote:
| I use TaxAct personally.
| guerby wrote:
| In France you can fill your tax form online since 1999
|
| https://fr.wikipedia.org/wiki/T%C3%A9l%C3%A9d%C3%A9claration...
|
| In the past years banks and companies give tax related
| information to the tax authority so for lots of people the online
| tax form is already 100% filled and correct.
|
| For the past year tax filling I just had to add to the web form
| renting income, tax deducible donations, and that was it.
| Topgamer7 wrote:
| Canada has online filing too. And there is a fully free
| software (StudioTax), that you can use for up to 20 filings.
| Its not the prettiest, but I have never paid to file my taxes
| (except to the gov't of course ;-) ).
| scott_s wrote:
| The IRS is not allowed to do this, by law. Intuit lobbied for
| that law, which made Intuit (and others?) offer a free version.
| Of course, Intuit goes to great lengths to guide people away
| from that free version.
|
| edit: save_ferris linked to an excellent story below:
| https://www.propublica.org/article/filing-taxes-could-be-fre...
| guerby wrote:
| Forgot to say that the french tax authority open sourced the
| (after FOIA-like pressure - called "CADA" in France) code that
| computes the tax amount from the tax form entries. It was
| written in a custom language (with documentation):
|
| https://github.com/etalab/calculette-impots-m-source-code
|
| You have each year code in the repo.
| elliekelly wrote:
| Do you happen to know whether the CADA pressure came from
| another branch or agency of the French government or whether
| it was some sort of transparency advocacy group?
| masklinn wrote:
| Sorta the latter but not really. It was an econ student
| (Adrien Fabre) as part of a fiscal simulation project
| (OpenFisca).
| masklinn wrote:
| I'd assume most european countries have had that for at least a
| decade e.g. Estonia's e-tax started in 2002, Belgium's tax-on-
| web in 2003.
| mulmen wrote:
| How does France build these systems? Does the government itself
| have IT development resources or do they contract out to
| private industry?
| guerby wrote:
| It depends a lot :).
|
| For the tax system it was developped with lots of free
| software, and support purchased to French IT companies. It
| was hosted on a big (for the time) linux server farm.
|
| Here are a few interviews and slides by the director of this
| project, unfortunately in French (didn't check automated
| translations, might work):
|
| https://www.toolinux.com/article/jean-marie-lapeyre-
| copernic...
|
| http://www.supelec-
| rennes.fr/sic/JOURNEES/05_10_20/lapeyre.p...
|
| The free software community in France was very happy to see
| one major ministry doing this kind of projects at the time.
| Macha wrote:
| Can't speak for France, but in Ireland this system has been
| in place since it was done on paper. Most (all?) IT work for
| the government is contracted out to private companies.
| Macha wrote:
| Same idea here in Ireland.
|
| Reasons you might need to interact with the income tax system
| here:
|
| 1. You have significant (>EUR5000) non-employment income.
|
| 2. You worked for less than 12 months and are claiming your tax
| refund.
|
| 3. You disagree with the government assessed tax reciept (which
| is based on what your employer fills in).
|
| For 90% of people then, they don't need to interact with it.
| Their employer reports their income, deducts an appropriate
| amount of taxes, and sends it to the government. End of
| process.
| vonmoltke wrote:
| > Their employer reports their income, deducts an appropriate
| amount of taxes, and sends it to the government.
|
| How does your employer know what "the appropriate amount of
| taxes" is? In the US I have always had trouble setting this
| to where I'm not at least 5% off in one direction or the
| other, and I know more than my employer about what my
| withholding rate should be.
| alkonaut wrote:
| My employer pays all my income (I don't have any side
| gigs). Unless I do something unusual like take a few months
| off for parental leave or similar, they know I make 12x my
| monthly salary exactly so they deduct my taxes from the
| table of income tax for someone having my yearly pay. It's
| going to be almost exactly correct.
|
| Reasons for deviations on the final tax would be non-income
| taxes/deductions (selling stock, income or deductions from
| interest).
| sokoloff wrote:
| If your outside income is predictable and you prefer to do
| smooth withholding, you should be able to get quite close
| with W-4 excess withholding instructions.
|
| I just try to make sure I hit the safe harbor withholding
| amounts every year (100% or 110% of last year's tax
| liability, depending on income level) and then otherwise
| just minimize withholdings.
| vonmoltke wrote:
| That's what I end up doing. The remaining difference is
| mostly from unpredictability.
|
| Still, I'm trying to understand how a system like
| Ireland's, which from this description doesn't have
| anything like a W-4, works without being significantly
| off in many cases at the end of the year.
| masklinn wrote:
| > How does your employer know what "the appropriate amount
| of taxes" is?
|
| It's an approximation based on your revenue (and they know
| how much they'll pay you). At end-year everything is
| tallied all proper and as taxpayer you either have to pay
| the missing bits (if you have extra revenues which weren't
| accounted for by your salary) or you receive a wire
| transfer from the state (if you had deductions which
| weren't taken in account e.g. dependents or whatever).
| vonmoltke wrote:
| I think I should have left the "End of process." in the
| quote, because this makes more sense. It's not the end of
| the process. The taxing authority sends you an estimate,
| you adjust based on a few factors they didn't account for
| and send it back.
|
| That still raises the question, though, of how your
| employer knows enough about your tax situation to not
| significantly over or under withhold. If my wife and I
| just relied on the basic IRS calculations on the W-4 and
| didn't specify additional withholding by dollar amount we
| would end up owing thousands, possibly over $10,000, the
| following April (before penalties). How do Ireland and
| others avoid that?
| Macha wrote:
| This is why I specified for 90% of people. Most people
| don't have significant taxable income beyond employment
| (their only other income being savings account interest
| which is handled by your bank by a similar but separate
| system), so their tax liability is their income tax on
| their employment.
|
| A lot of people in the software industry specifically
| might have significant investments, shares, maybe rental
| income, etc, and then you do need to specifically inform
| the government about those, but this isn't the case for
| the 90%.
| nurbel wrote:
| In France, my employer gets a percentage from the tax
| administration that they withold from the salary. If my
| financial situation changes, I can update my previsional
| income online
| arvindch wrote:
| It's not set by the employee, rather the employer looks at
| expected income for the year and withholds accordingly. At
| the end of the financial year, the Tax dept. does a final
| calculation and if the amount was too high/low, they send
| you a notice.
|
| Tax deduction at source is a common concept in a lot of
| countries, incl. dissimilar ones like India and the NL,
| where I have both worked. Super convenient and frictionless
| for the vast majority of employees.
| vonmoltke wrote:
| > It's not set by the employee, rather the employer looks
| at expected income for the year and withholds
| accordingly. At the end of the financial year, the Tax
| dept. does a final calculation and if the amount was too
| high/low, they send you a notice.
|
| That's my question, how does an employer or taxing
| authority know what that amount is? My employer doesn't
| know my withholding status until I tell them via a W-4,
| and that doesn't take into account how the appropriate
| amount to withhold may change due to my spouse's income.
| Is the taxation scheme just different in most European
| jurisdictions?
|
| Edit: corrected a brain fart (see below)
| sokoloff wrote:
| > The IRS doesn't know my withholding status until I tell
| them via a W-4,
|
| You don't send the W-4 into the IRS; you give it to your
| payroll department.
| vonmoltke wrote:
| Correct. I was changing my thought mid-sentence from
| "filing status" to "withholding status" and didn't
| correct the beginning.
| Macha wrote:
| Withholding =
|
| (Taxable income in each bracket * tax rate for each
| bracket) - (annual tax credits / number of annual
| payments from your employer).
|
| If you're married and want to be taxed as a couple, you
| simply send the documentation as such to the tax office
| after your wedding.
|
| You can tell your employer and they'll try adjust
| appropriately in payroll, or you can not tell them and
| the government will send you a tax refund at the end of
| the year for the partner with the higher tax bracket.
| It's optional to be taxed as a couple, so presumably
| you're opting into it because it will reduce your tax
| obligations, so there shouldn't be a case where you have
| to pay more because you're married. The same applies for
| tax credits that you don't want to tell your employer
| about.
| vonmoltke wrote:
| > If you're married and want to be taxed as a couple, you
| simply send the documentation as such to the tax office
| after your wedding.
|
| So that's one difference. I have never sent the IRS proof
| of our marriage, and they have never requested it. I
| simply updated my wife's name and our filing status in
| the year we got married.
|
| > (Taxable income in each bracket * tax rate for each
| bracket) - (annual tax credits / number of annual
| payments from your employer)
|
| > You can tell your employer and they'll try adjust
| appropriately in payroll, or you can not tell them and
| the government will send you a tax refund at the end of
| the year for the partner with the higher tax bracket.
|
| I'm confused by this. Are tax brackets always individual
| in Ireland? The reason I need to specify additional
| withholding is because each of our income withholding
| calculations starts from the lowest bracket and tops out
| at a bracket below our actual top marginal rate, which is
| determined by adding our incomes.
| lozenge wrote:
| It's achieved in three ways
|
| 1) far less deductions/carve outs in tax law, or ones
| that people can use without contacting the tax service.
| Eg pensions and charity contributions deducted by
| employer, so tax is calculated. Charity contributions
| paperwork for one off donations dealt with by the charity
| (Gift Aid scheme)
|
| 2) "tax code" five digits representing your tax status,
| that the tax office will give your company to update
| calculations when your status changes. Possibly starting
| from a phone call from you. Eg using marriage tax laws.
|
| 3) tax summary P60/P45 provided by your last
| employer(required by law) that you can give your next
| employer so they calculate correctly
|
| Sounds complicated, but it's all geared towards moving
| the burden to employers who just pay for payroll
| software, for everybody else it is very simple.
| Macha wrote:
| So let's simplify the numbers a bit compared to the
| actual system:
|
| The tax rates for a single person will be:
|
| 30000 @ 20%
|
| remainder @ 50%
|
| You earn 40000. Your spouse earns 20000.
|
| Example 1:
|
| You are taxed seperately. Your employer takes 11000 of
| your gross and sends it to the government. Your spouse's
| employer takes 4000 of their gross and sends it to the
| government. Your total tax payment is 15000.
|
| Example 2:
|
| You opt in to join taxation. Your employers have no idea
| you are married, but the tax office does (because you
| sent them documentation to opt in for joint taxation).
| The government then assesses your tax as a couple and
| realises your joint income falls into the lower tax
| bound, and your tax should only be 12000, but you paid
| 15000. You get a refund of 3000.
|
| Example 3:
|
| Same as above, but you tell your employer. You can add up
| to min(26300, spouse's income) to your standard rate tax
| bracket. Your spouse needs to inform their employer to
| deduct the same from theirs. You tell your employer you
| are transferring 10000 from your spouse's tax bracket to
| yours.
|
| Your employer's payroll now works out your tax as 40000 *
| 20% = 8000. Your spouse's employer works out their tax as
| 20000 * 20% = 4000. You pay 12000 exactly.
|
| Example 4:
|
| Same as above, but only one of you informed your
| employer, you committed tax fraud, your employer filled
| out the form wrong, whatever. You get a tax bill for
| however much under your tax liability as a pair that your
| combined tax payments were.
|
| Example 5:
|
| Your income is 25000, your spouse's income is 25000.
| Regardless of whether you are assessed individually or
| seperately, your tax is 10000. Your employers deduct 5000
| each.
|
| Of course, there's various tax credits you can apply for
| and you can inform your employer to deduct them from your
| payments or apply for them at end of year from the
| government. These can only decrease your tax bill, not
| increase it, so I'm not sure how you'd end up with an
| unexpected bill. There's also a higher base standard rate
| for married person to compensate for not being able to
| completely share your tax bands for the year (a measure
| intended to gain some extra tax income from couples with
| one high earning person and one person with a very small
| income, I guess).
| wombat-man wrote:
| sounds so amazing. I absolutely hate that we in the US all
| have to do this stupid homework assignment once a year.
| dutchmartin wrote:
| Almost the same for the Netherlands, we could do that from 1996
| [1].
|
| [1] https://over-ons.belastingdienst.nl/themas/digitalisering-
| en...
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