In order to file taxes, you have to pay a middle-man (e.g. turbotax, tax preparer, etc etc) to file it for you. I propose the following. Every taxpayer should be allowed to login into the IRS.gov website and do your taxes right online, deductions and all, free of charge. The IRS website should have a front-end of sorts that walks the person through doing their taxes online, step-by-step, from start to finish. The IRS could link the front-end with all of the States and allow taxpayers to file their city and State returns as well. I think this is a good idea (I am biased, of course). What do you think?
If your taxes are even a bit complicated (and with current tax code it doesn’t take much for them to be complicated) you can go to 10 different tax preparers and each one will calculate a different number for you to pay. At least with them I don’t have to worry that they have some kind of skin in the game. IRS does. Against me. No thanks.
And again, if there is anything slightly out of the ordinary in your taxes, you cannot have a universal “front end” that can take all the deductions you can take into account without it asking you at least a few thousand questions. So you have to know what you’re doing to begin with.
That’s the way it works in Australia. The ATO (Australian Taxation Office) has a downloadable app called ETax that takes you step by step through lodging a tax return. It’s bog simple for your average punter, and once submitted, your refund is generally made within a week.
Prior to ETax, you could also do a tax return on paper and send it off. What amazes me is the number of ordinary people who imagine it’s all too hard and employ an accountant or tax agent to do it for them (and pay often big $ for the privilege). For most taxpayers, lodging a return takes maybe 1/2 hour and it is truly and dreadfully simple. There is no need whatsoever to have a professional do it.
Hmm, I looked on the IRS.gov website. It basically funnels you to businesses that will offer you a free federal return (but you have to pay for State), if you make below $58,000. The problem with these businesses t the federal return is free but the State return is like $40. When you said “some people can”, who are those people who can file directly with the IRS? I guess I should’ve been more specific that this idea is regards to electronic filing. I had forgot that people still do the paper return. :smack:
You’ve always been able to submit your own tax-return, but only in more recent years via electonic lodgement.
At my last job, I was sort-of a de facto Tax Assistant for workmates who’d previously had an accountant do their returns for them. These were people who earned a basic wage, had few (or no deductions), no property or business involvement and yet still felt that doing a tax return was rocket surgery or something. Once I’d gone through the steps online with them they then realized that they’d been blowing money all those years.
There IS a no-charge e-file provider right on the IRS site. FreeFile is the one I use. (Well, it is a third-party provider and you do leave the IRS site to use it, but that’s just a technicality.) If you can fill out your own tax form, you can do it for free. All the forms and schedules are there as well as the IRS instructions, but you don’t get walked through step by step. You need to know what you’re doing.
If you can’t do it yourself by reading the instructions written by the IRS, well you have to pay somebody.
Oh, I guess you found that yourself now. Except my wife and I filing jointly made more than $58,000 and we could use it. I’m not sure where you got that figure.
EDIT: I see now. Under $58,000 you download their software. Over $58,000 you use their online forms. That’s what I did.
Well, I work for the IRS. (Not in any major position, so don’t ask me for tax advice. I just type numbers into a computer all day.)
Judging from the software they have us use, the IRS isn’t exactly “cutting edge” in the IT department. A lot of the work gets done on systems that look like they run on DOS. That said, I suspect the issue is largely one of not having the capability to handle millions of tax filings, which (let’s face it) would largely come in on the same day, April 15th. Obviously, they are able to take the raw data in, since that’s what would be coming in from the tax preparers, but to have a website that would have an interactive element, or provide downloadable software, would certainly put a serious strain on their processing capabilities.
Much of the IT work that gets done in the Service is contracted out. Our in-house IT people pretty much specialize in trading out malfunctioning machines and keeping the operating systems updated. (And in fairness, there are a lot of machines to take care of.) Programming software is a job that goes to the lowest bidder who is also able to maintain security requirements and provide a reliable product.
Maybe it varies from state to state. My sister’s income is below $58K and here in NY, she filed both fed. and state taxes for free using H&R Block. Apparently she got there via My Free Taxes, which I see is linked on the NYS Dept. of Taxation & Finance site. Is that not available in other states?
I know the last time I used a service like that, I did have to pay for State (only something like $10, though). Gotta say, e-filing rocks.
Actually there was a bill being passed around wherein at the end of the year, the government sends you a statement of how much you owe or how much you’re getting back. If you agree with it, you just sign the paper, send it in, and be done with it. If you rather file your own, you would’ve had that option too.
But of course, the Tax Lobbyist put the kibosh to that idea.