
TurboTax Takes Aim at Smaller Rival in Fight for Filers - samfb
http://www.bloomberg.com/news/articles/2016-02-22/turbotax-takes-aim-at-smaller-rival-in-fight-for-filers
======
zdw
Intuit's PolOps are also continuously trying to keep the US Tax system
complex, so they have a reason to exist that isn't the case in other
countries:

[http://www.nytimes.com/2010/01/24/business/24digi.html?_r=0](http://www.nytimes.com/2010/01/24/business/24digi.html?_r=0)

[http://techcrunch.com/2013/03/27/turbotax-maker-funnels-
mill...](http://techcrunch.com/2013/03/27/turbotax-maker-funnels-millions-to-
lobby-against-easier-tax-returns/)

If you want something evil to disrupt, disrupt this.

~~~
username223
Yep -- this is some pretty evil rent-seeking. Unfortunately, disrupting it
(i.e. automatic filing) requires political action rather than tech. For people
with a single wage/salary job, the IRS already has a good idea what they owe
thanks to their employers' reporting. IRS could simply mail them "we think $X
is what you made, and $Y is what you owe," and they could either say "okay" if
they agree, or fill out the forms otherwise.

~~~
masklinn
Pretty much how it works in most of europe. Not even mailed, during the filing
period log into the tax authority's site, check that the pre-filled
declaration looks OK and validate.

~~~
willis77
Sounds glorious. In the U.S., figuring out taxes is like:

Take line 39b, multiply it by your age as determined by worksheet 6689. If you
are between 41 and 43 years of age, enter '0'. If you were not subject to the
Railroad Act of 1938's exempt dependent pension clause (this is not common),
add 13 to this number in hexadecimal, else, subtract 2 and multiply by
1.388688. If you did not have healthcare for more than 14 minutes during the
prior year and line 17 is 4 or greater and you live in a zone designated as
"clown free" by your local municipality, draw a unicode snowman on this line
and prove Fermat's theorem in the margins of Schedule Q...

~~~
algorithmsRcool
Is this really the case? Can't most people can just file with a 1040(A or EZ)
and be done pretty quickly. I was under the impression that you only have to
break out the crazy worksheets or software if you want to get fancy with your
deductions or take advantage of tax credits.

You can save alot of money this way, but really it's the deductions that are
the complication (and the audit risk...) but how can you simplify the
deduction process, you have to get specific by the very nature of the task.

~~~
SilasX
You can't file for free on the IRS site if your income is above $62k, no
matter how simple your filing is:

[https://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-
for...](https://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free)

Edit: I'd love to know a logical reason for that policy beyond "f- the rich".

~~~
dragonwriter
While you can file for free above $62,000 (you have to use the fillable forms,
and not the tax prep software), the reason I think the reason for the divide
is ultimately that the sub-$62k annual income segment isn't of particular
interest to the tax prep (software/services) industry, so providing free tax
prep software to them doesn't hit the kind of political pushback that a
generally-available solution would.

------
patio11
I last used TaxAct in 2011, and would still be using it but for an
increasingly complicated business situation which necessitates lots of
accountant time (one benefit of which is that form manipulation is thrown in
for free). It's great. If any of you are doing uncomplicated W-2 or small
business returns which don't have a gazillion moving parts, give it a spin;
it's much better than the price suggests.

Edit to add: I'd be remiss if I didn't note "Small software company in Iowa
which doesn't have a blog, didn't invent Rails, and which > 90% of HN has
never heard of before has > $100 million in annual revenue." It's a great time
to be alive, isn't it?

~~~
herge
57$ million of profit with just 150 employees too! I'll take 380k per head any
day.

------
suter
FWIW, we're taking on TurboTax in Canada,
[https://simpletax.ca](https://simpletax.ca).

The Canada Revenue Agency introduced an API this year that enables us to auto-
fill much of the return: [https://help.simpletax.ca/questions/how-to-use-
afr](https://help.simpletax.ca/questions/how-to-use-afr).

~~~
RodericDay
When do you guys think you'll tackle Quebec? There's a tech scene here, tons
of people would jump on-board instantly (as well as help develop it).

~~~
suter
We added Federal Québec support this year and plan to add the provincial
component next year: [https://simpletax.ca/jobs](https://simpletax.ca/jobs).

Québec is a challenging province because of Revenu Québec and Bill 101.

~~~
RodericDay
It is, but I also think it is worth it. I will point the few accountants I
know in your general direction.

------
tsestrich
I've used TurboTax the past few years, and completely echo the sentiment
expressed by others regarding the hidden charges that get tacked on when
starting with a "free" return. Turned out that losing money on the stock
market also cost me extra on preparation fees as well...

Partly because of the negative experiences with TurboTax, my co-founder and I
just launched a company [1] in this space. We're actually "replacing" a
TurboTax product that was recently discontinued called "Personal Pro". We're
something of an "Uber" for tax preparation, acting as an online marketplace
and platform for clients to get their taxes done by professionals. TurboTax
had tried this for a few years but it appears they're betting on a continuing
shift to DIY.

Has anyone had any experience here as a client of Personal Pro? Would love to
hear how it went!

[1] - [https://www.taxaroo.com](https://www.taxaroo.com)

~~~
iolothebard
I use H&R Block TaxCut (going on 15 years). Costs about 39.99 a year for both
my business and personal. Just keep an eye open for when it goes on sale
(retail is 89.99 I believe).

I even dropped Quickbooks after their shit 2011 "upgrade". Worst fucking
software I've ever used, but hey, it looks like it's WPF now!

------
e40
I use a CPA for my taxes, since I never want to have to deal with an audit
myself, but even if I wanted to do my own taxes, I would never use anything
Intuit made, ever. My experience with Quicken has forever soured me on that
company. Quicken was one of the worst programs I have ever used. Because of
their need to sell a yearly version of it, the UI churn and addition of bugs,
it got so bad it was nearly unusable for me. (I've been using Moneydancy for
years and it's a great replacement for Quicken.)

~~~
brianwawok
> I use a CPA for my taxes, since I never want to have to deal with an audit
> myself,

You realize the doing of the taxes and the audit defense are two separate
things, right? You can totally do your own taxes, and in the .01% chance you
got audited - hire someone to help. It's not that scary of a thing...

------
dsmithatx
TurboTax should focus on making long term paying customers happy. I did not
file taxes in 2014 since I didn't really owe much and decided to put it off. I
went last weekend to do my 2014 taxes before submitting 2015.

Turbotax told me I had to purchase the software for $60 even though I always
have used their online service until 2013. A quick Google search and I found a
free service that allowed me to get my 2014 taxes done in 30 minutes.

It was FreeTaxUsa if anyone else is in the same boat.

~~~
johnward
TurboTax and many others still have a free option:
[https://apps.irs.gov/app/freeFile/jsp/index.jsp](https://apps.irs.gov/app/freeFile/jsp/index.jsp)

~~~
dsmithatx
Not for previous years which was my whole point.

------
jonathanjaeger
I've been using TaxACT ever since I became an "adult" and started filing my
tax returns. I can't really compare it to TurboTax, which I've only used for
business taxes, but I can't imagine anything else being easier or cheaper.

It amazes me how some people who have really simple tax forms still pay
accountants..

~~~
vdnkh
>It amazes me how some people who have really simple tax forms still pay
accountants..

My W2 is "simple" (single, no kids, etc.) but I give it to an accountant
anyway. Costs $30 or so but the accountant knows certain tricks to maximize my
tax return. Not illegal, but she knows how broad exemptions can be. For
example, I work from home some days. I built a new computer. Technically, it's
exempt because it's a work expense.

~~~
brianwawok
> Technically, it's exempt because it's a work expense.

Ever play a game on it? Opps, it is no longer a work expense. Minor tax fraud
is not exactly a "trick", anyone can do it!

------
tosseraccount
Speaking of smaller rivals ... This guy provides free US federal tax forms for
Excel :
[https://sites.google.com/site/excel1040/](https://sites.google.com/site/excel1040/)
( old school shareware)

Fill in, print out, mail in. (Absolutely great if you have to file previous
years returns to qualify for Obamacare subsidies.)

Turbo Tax tries to trick/force you into buying "audit protection": "Please
enter your credit card number to submit form".

~~~
emodendroket
There's a fair bit of sleaze when you use TurboTax, at least this year:

* If you enter any IRA contributions, including Roth IRA, it suggests you update to Deluxe to get "your biggest refund" even though Roth IRA contributions don't qualify you for deductions.

* They plaster "e-filing your federal returns is free!" everywhere while obscuring the fact that they want $20 to help you e-file a state return

* The audit stuff you mentioned

* They no longer include one free state as they have in previous years, but this fact is not mentioned anywhere in the product description

~~~
istjohn
To add on to that, if you qualify for the free tier and used TurboTax in a
previous year, they make a point of showing you all the information they can
prefill from your last tax return. Then, they tell you that they will delete
this information unless you upgrade to a paid version.

Way to reward loyal customers. I found another provider to do my taxes this
year.

~~~
tosseraccount
How marketing slipped this past QC is dumbfounding.

Maybe they know their little niche will face decline and they need to squeeze
whatever they can out of it now.

------
Shivetya
Currently I use H&R and went that way after years of Turbo Tax simply for
cost. Even now the F&S version was twenty bucks cheaper than the Turbo Tax
equivalent. I figure many must think themselves locked into to continue with
Turbo Tax.

~~~
snuxoll
I use H&R Block as well, because having an LLC it is substantially cheaper for
me to do my business taxes than TurboTax.

------
berberous
I switched this year from TurboTax to FreeTaxUSA, as I we fed up paying $90
for a simple return, constantly getting up sold, and supporting an evil
company. FreeTaxUSA was $12 for state and federal, and worked just fine if you
understand how tax forms work and don't mind manually entering your 1099 data
from your brokerage firm (turbotax can login to your broker in order to
automatically populate this data, and is admittedly better at explaining the
various questions that you need to answer to do your taxes). For this crowd, I
highly recommend switching to something other than turbo tax.

~~~
quasse
I used them as well this year for the first time, because they seem to be the
only filer that will file contracting income for free. I really liked their
interface and the lack of upsells.

------
grandalf
Due to a turbo tax bug my return was flagged for an audit. Not worth it. Never
using it again.

~~~
spydum
Curious, did you review your filing documents before submitting? Was it
something inconspicuous?

~~~
grandalf
I did not. I filed electronically. I might have caught it if I'd reviewed
everything but it was a pretty complex return.

Fortunately the audit was simple once I realized what had happened and
explained it, but it was overall very time consuming.

~~~
pkaye
How does an audit work? Do you go to the IRS office? Is the conversation
pleasant or adversarial?

~~~
grandalf
It was fairly formal, but the auditor was friendly and professional. My return
was flagged as part of an IRS program to audit the forms and overall tax
collection effectiveness, so there was never any presumption that I'd tried to
evade paying taxes.

I sent over a bunch of documentation and then eventually met with the auditor
at the office for a few hours to finalize things.

------
SonicSoul
If it wasn't for this story I would have used TurboTax again. I hope this
backfires with free publicity for TaxAct and many people like me will switch
this year.

~~~
dantillberg
Me too! I started using TurboTax years ago, and have always grudgingly paid
the ever-increasing fees for the service. They're so slippery about state
filing fees.

I estimate I'll be saving about $60 as a result of this article this year. For
TurboTax, because I have a small mutual fund account, I have to upgrade to the
"Premium" option just for those extra two or three boxes. H&R Block had
similar pricing last year. TaxAct has a similar pricing strategy but much
lower prices: instead of $50 for the federal and $40 for the state, it's just
$15 each (or something like those numbers).

I'm thinking of it like this: TaxAct needs to afford their $200k houses in
Iowa, while TurboTax needs to afford their $1M houses in the Valley.

~~~
curun1r
> TurboTax needs to afford their $1M houses in the Valley.

FYI: While Intuit's main headquarters may be in Mtn View, TurboTax is
primarily based in San Diego. That's not Iowa cheap, but it's somewhere in
between.

------
morgante
My tax situation is complicated enough that I no longer want to do it myself,
but I also can't find a good accountant easily.

Why isn't there a web service which will let you easily hire a good accountant
online? There's absolutely no reason your accountant has to be local to you,
yet all the information I've found online has been for finding a "local"
professional.

I can't wait to see the Uberization of professional services.

~~~
tsestrich
I'm sorry to come in with a blatant promo, but we've just done exactly what
you described! [https://www.taxaroo.com](https://www.taxaroo.com).

We can match you with a preparer from anywhere in the country, we quote you a
hard up-front price, and you interact with your preparer entirely online.

My co-founder (a CPA) and I just launched it this year, and we've received
extremely strong interest from professional tax preparers. We actually did a
Show HN a little bit ago, but didn't get much traction:
[https://news.ycombinator.com/item?id=11074466](https://news.ycombinator.com/item?id=11074466)

Would love to hear your thoughts!

~~~
morgante
That's pretty much exactly what I was looking for and I'm giving a try right
now.

It'd be nice to have some sort of ranking/rating system, or just some way of
knowing that the preparer you recommended is qualified and good. Also it seems
odd that nearly all the accountants you suggested were in CA despite me
setting NY (not that that's a problem, it just seems odd).

~~~
tsestrich
That's awesome! We're excited to have you giving it a try.

Thanks for the feedback. I absolutely agree regarding the ranking/rating
system. We've really just recently launched, so right now we just don't have
many reviews. We do have the system in place, though, and we'll be building up
those reviews.

Regarding the preparer locations - we plan to add the ability to sort/filter
preparers, but we do only show you those that have specifically indicated that
they can handle the type of returns required based on your quote. So, if you
said you worked in NY and lived in NJ, the listed preparers will be able to
handle both states. Same goes for rental property, capital gains, etc.

If you have any feedback or issues as you go, feel free to reach out to me
directly at tim@taxaroo.com

------
nissimk
I used TurboTax for years, but last year they messed me up so now I will never
use them again. They wouldn't E-File my NY State tax form for my business
because of some missing information on their side and kept saying it would be
available soon until right before the deadline I gave up and switched to
TaxAct in a hurry. Then I had to wait for Intuit to refund the cost of my
software. It was a very unpleasant experience. I didn't like TaxAct as much
because I was used to the Turbotax interface and it couldn't automatically
pull in the numbers from the previous year, but I think it worked out OK in
the end.

------
LordKano
I have been using TaxAct for about 10 years. Thus far, I'm very happy with it.

There is one minor gripe that I have, they moved the location of the data
files so the process of making a backup copy is a little different but that's
easy to overcome once you're aware of it.

~~~
imperialdrive
That, and they are started to get a little gimmicky with the upsells etc.
Still, I enjoy using them for about 10 years too. Taxes done in about 1 beer -
can't beat it!

