https://www.theverge.com/2023/10/18/23922150/irs-direct-file-pilot-available-13-states-income-tax-2024
Goodbye, TurboTax. Hello, direct filing (for some people).
This is awesome! Now the IRS just needs to send me my already completed taxes that I just verify, sign, and return, like they do in Sweden.
If they are missing something, is it easy to ammend what they send, or do you gotta start from scratch and you can only use that as a reference?
There is no 'scratch', you login and practically everything is filled out. If you want to change or add something, you can do so.
Yep, it's all a bunch of forms and you can edit the info that is prefilled.
There's a rare few forms which still need to be sent in on paper, but most can be sent in digital form.
This is nearly how it works in Canada. I grant access from my accounting software to my Canada revenue agency account and pretty much just verify it's correct and fill in some of the non registered investment stuff which happens to be mostly with the institution whose software I use anyways.
The software is free. It even checks my wifes to optimize the returns.
How does that work for businesses and investments? In the UK I don’t have to do anything for taxes with my job, but if the investments in a rental property, or something like that, are over £4000 I have to do the forms.
They give you something to sign. For the majority of people, they just say "Yeah, sounds about right" and they confirm it.
For people with added complexities, they'll do what they already currently do and add in the details you're talking about. It's literally win-win all around except for the tax soft company CEOs.
There's tax preparation software companies here in Sweden too but almost only businesses use them because most individuals don't need it.
Intuit seems to be worried. Shortly after this story was published, Rick Heineman, the company’s communications VP, emailed The Verge with an aggressive statement calling the IRS’s pilot “redundant” and “half-baked.”
“The Direct File scheme is a solution in search of a problem,” he wrote, adding that it could end up “costing billions of dollars in taxpayer money.”
"Yeah you morons! Don't use the free tools that the govt provides you! Pay us to do it!"
hes literally pointing out the problem with their own product..."redundant","solution in search of problem", "costs taxpayers stupid money".
... dude theres 4 fingers point back at you.
It's becuase Texas doesn't have state income taxes so there is literally nothing extra they need to do to comply. Same goes for Florida and Tennessee, which commenters also mentioned.
Yeah...these hard right states signing on board is making me wonder if they are doing so just to shit on the program and "have a say" on how it goes.
2024 filing season means this coming year to file 2023 taxes, not when you file your 2024 taxes in 2025, right?
Next year, 2024 Tax Filing Season (2023 Taxes)
Direct File is one more potential option from which qualifying taxpayers will be able to choose to file a 2023 federal tax return during the 2024 filing season.
Holy shit, some nice news from NH. Seems like it's been a while since we were in the news for anything other than an embarrassment or the election.
Very good news. Tired of giving money to the tax prep vampires. But initial roll out is for simple tax situations (W-2 and deducting student loan interest).
Why can’t this program also apply to selling of stocks/options as well? This information is already furnished to the IRS
This information is already furnished to the IRS
The fact that you sold it is already furnished to the IRS, yes. But not what your cost basis was, therefore not what you actually owe. You have to either calculate that yourself or have someone who knows what they're doing do it for you.
Some fancy trades perhaps not, but I have yet to have a line item not have this on it: (basis reported to the IRS)
In some European countries, paying income tax means that the government sends you a form that is already completely filled out except for your deductions, and you simply verify that it looks good, then you add in whatever deductions you have, and file it.
Because 99% of the work in filing our taxes in America is completely worthless. The government already receives information directly from the same companies who send you all those tax forms. The IRS already knows all the information. Making you input it again is just a way to ensure the maximum number of mistakes.
So the IRS is taking a good first step, but we still have a long way to go to catch up to what people in other countries already have. Instead of making me fill out the forms, and the IRS checks for errors, have the IRS automatically fill out the forms, and I'll check for errors. In a civilized country, this is something that we should already have.
It’s because the tax filing software companies lobby lawmakers to prevent exactly what you described. They want to keep the tax code complicated, so people feel the need to continue buying tax software every year. Seriously, tax software lobbies are some of the largest lobby groups in the country.
And the other half of that is that Republicans want to make paying taxes as difficult as possible so people will support tax cuts
And to take it one step further, republicans want to see governmental agencies seem incompetent and fail, thus set the course for their regulatory capture.
And seemingly right out of a super villain movie to further the above, is Project 2025:
Established in 2022, the project seeks to recruit thousands to come to Washington, D.C., to replace existing employees to restructure the Executive Branch of the federal government as to further the agenda and policies of Donald Trump. The plan would perform a quick takeover of the entire U.S. federal government under a maximalist version of the unitary executive theory – a theory proposing the president of the United States have absolute power of the executive branch – upon inauguration.
Scary times. To quote David Frum:
If conservatives become convinced that they can not win democratically, they will not abandon conservatism. The will reject democracy.
There was a massive bipartisan (well POTUS and Dems in Congress) push for this in the second half of the Bush Administration. It lost GOP support after the Republican House Caucus turned on Bush for his path to citizenship immigration reform policy. Intuit and its peers have so much money in this and in lobbying.
"According to the IRS, these are the states joining the pilot:
States with state income tax: Arizona, California, Massachusetts, and New York
States without state income tax: Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming"
Nice! I just moved out of NY State (NYC) and down to Florida, free filing and no state income tax for me!
The politics may suck, but everything else is wonderful down here in Miami. It's a lot different than central and northern Florida.
That was one of my friend's selling points about moving here lol I'd get raped with taxes in NYC. I would make $110k/year but I'd be lucky if I saw $85k.
Ugh, another example of government overreach. This is just going to make it harder for me to pretend to do taxes for 6 hours. What, do I have to keep the terms of service open to “read” for 6 hours? Who’s going to believe that?
We should be eliminating income tax, not making it easier for the government to take our money.
Complete pipe dream. The government is gonna take their share whether you like it or not, the only thing this changes is that big tac corporations won't take theirs, too
You know there are lots of other taxes than just income tax?
Roads and car infrastructure, at least in my area, is paid for entirely through through gas and car insurance taxes, occasionally property taxes if it's in a municipality. But income tax doesn't pay a penny for the roads.
Tf I want to pay tax on subsidized dino rot? Sales tax punished poor people, properly structured income tax does not.
Consumption taxes are regressive and affect the poor more than the rich.
EDIT income taxes almost certainly pay for a significant portion if not a majority of the road work in your area.
Downvoted for telling the truth. The original comment is still wrong but "what about the roads" crowd never seems to know that roads are almost entirely funded with gas tax. That's what the $3.67^9 is for
that roads are almost entirely funded with gas tax
Not even close, only 41% of road spending in the US is covered by gas taxes.
Meanwhile the IRS should do what other countries do and just use the data they already have and send you a tax bill. What we currently have for like 99% of the tax paying public is a system where you get to guess if you filled out the forms correctly and then the irs, using the data it already has for you, corrects your mistakes and sometimes penalizes you for getting it wrong. All this while allowing Intuit and others to extract even more rent from people.
How about wealth taxes instead. You know, like what we're already doing with property taxes?
Income taxes disproportionately affect the poorest in society.
Then the solution is to make the existing income tax more progressive than it already is, not just throw it away.
More progressive, close the loopholes, fund the IRS properly so they are actually able to prosecute tax cheats (usually wealthy), set a cap on tax money that can go to the military and outlaw any tax cuts that primarily benefit the top 3 tiers within 3 years of an election.
Wealth and income are related, but are not the same thing. Wealth is assets while Income is earnings. Wealth could come from saving/investing income, but it can also come from "unearned income" like the appreciation of assets.
I personally don't support Wealth Taxes because wherever they've been implements, they've had limited effects. I've yet to hear a good plan for how to execute a Wealth Tax and haven't heard good answers for questions like, "Do we allow for depreciation of wealth?" and if so, "How do we avoid that turning into a tax loophole."
Either way, wealth and income aren't the same thing.
To cut spending back to the point that the federal government can balance it's budget without income tax revenue.
A moron... sure, but uninformed, absolutely not.
I've been on this earth long enough to realize that income taxes are penalties on the working class for being too poor to make their money from investments or inheritance.
Firstly, three-quarters of highway infrastructure is funded by state investment. Even still, 82% of the entire HTF funding comes from taxes on motor fuel, not income tax.
Second, what you said doesn't even refute my original comment. Highways and interstates aren't roads.
Income tax is just a fine charged on the company for having employees. It's not taken from you, it's taken from them.
You can certainly tell you don't work. Income tax is taken from both you and your employer. Your employer matches what you pay.
That's not true. Income is taxed against the individual. Employers are required to withhold income taxes in many cases, but it's not "a fine charged on the company." It is a tax on the individual's income, withheld from the individual.
But the end result is the same. You don't "make 50k, and lose 15k to taxes", you just make 35k. That's is. That's what you make. If you want more, talk to your employer.
But the end result is the same. You don’t “make 50k, and lose 15k to taxes”, you just make 35k. That’s is. That’s what you make. If you want more, talk to your employer.
No, that's exactly what happens. Have you ever filed a tax return? We're not debating subjective interpretation here. You make a gross income that is then taxed by the government. The income tax that the government takes is taken from your gross income.
Your employer is taxed on your income by "Payroll tax", which is a tax against the employer and is not income tax:
Payroll taxes include amounts paid by both the employee and the employer to cover any federal taxes due, while income taxes specifically refer to the amount owed by the employee to cover their individual federal income taxes owed.
Source. I'm not trying to be pedantic -- in your original post, you said "Income tax is just a fine charged on the company for having employees" which is objectively not true. Income tax != payroll tax.
Yes, you're 100% factually correct. However, it's not useful to complain about an income tax because society benefits from those services. Fundamentally, if you're unhappy with your take home, you need to complain about your salary. And to accept that, you need to make the mental switch to believing that your pre-tax income is not actually your income.