In the last two years I took a leap to CreditKarma’s tax offering. It is a bit basic and not quite as endlessly full featured, but it is simple, efficient, pretty quick and quite fast. It’s also entirely free. The first year I used it I ran my numbers in a competing product to check, I was self employed at the time, which meant my tax situation wasn’t exactly easy that year.
Anyway, the numbers lined up perfectly. So I used CreditKarma to file and have been happy with it ever since. Honestly at this point I’d pay for it, just to give them a more solid business model and development budget, but as far as I know they don’t even have a paid option!
I filed in February this year. It was easy.
I actively avoid Intuit products now.
(Though, pragmatism wins here to some degree: I did use their self-employment accounting tool for a few years even when I had switched away from their tax software. That tool makes it annoyingly easy to keep accurate books and Xero just wasn’t as good and simple at what I was looking for. If I was doing it again today, I’d definitely again look for alternatives. And frankly I think I’d find them now.)
I'm looking forward to them handling all these edge cases, too, so I can fully recommend them to my friends next year.
When We Share the Information We Collect
Affiliates: We may share certain information with our affiliated companies, such as Credit Karma, to help us provide our Services and manage your account.
now, it seems fine for Credit Karma Tax to share information with Credit Karma. what exactly counts as an "affiliate" though? I mean, "affiliate marketing" is a common term, and that's pretty darn broad. I read it in the broadest terms possible, which would be "everyone we have a business relationship with", necessarily including TransUnion and probably other CRAs.
"Do you spam member or sell your list? No, we send less than one email per month. We never sell, share, or rent any consumer PII with third parties." https://www.reddit.com/r/IAmA/comments/c28od/i_started_credi...
"We make money by selling advertising on the site. We never sell or share member information" https://www.reddit.com/r/IAmA/comments/e0cfl/iama_entreprene...
"Definitely not. We hate that model too. We do just fine by showing you offers that we believe will save you money. We think that is a win win. As a test, I always suggest people create a unique email account just for us. See if you get any spam in that account. All bets are off if you use a crappy email provider ;)" https://www.reddit.com/r/IAmA/comments/3zh78n/im_ken_lin_fou...
"We are using Google business model. We don't sell or rent the information to anyone and we use it to help find the most useful loan or credit card for you. That simple." https://www.reddit.com/r/IAmA/comments/5ha7sg/im_kenneth_lin...
"We also don't sell or share your information unless you give us explicit consent. In those cases, we are generally pre-filling a form or determining if you qualify for an offer." https://www.reddit.com/r/PersonalFinanceCanada/comments/69ad...
It has been brought up a few times here: companies like H&R Block have lobbied to keep things complicated.
Unless I have some special deductions to take care of, the government should just send me something like "we have received forms x,y,z from a,b,c. This is your AGI, what we/you owe. does this look correct?"
It’s continuing existence is their fault, then. If not their sole fault.
The only way to simplify taxes is to actually remove deductions.
My deductions were usually only around ~$17,000 with pretty decent charitable contributions, I don't even have to think about if I'm going to itemized this year. I suspect I'm a pretty "average" itemizer.
You're missing the feature where your information is carried over year to year and all the forms you get can be automatically parsed. "Doing your taxes" with current software can be as simple as uploading a few PDFs and clicking next a bunch of times.
There's a middle ground with upper middle incomes and small businesses which have somewhat reasonably nontrivial tax code that applies. In the absence of software they would probably be pushed the accountant route. Generally people want this complexity because they pay less compared to proposed simpler systems.
Intuit lobbys to stop this happening because they know a lot of people don't have complex returns and if the government automatically calculates basic returns it would wipe out a large portion of their customer base.
If your adjusted gross income is less than $66,000 you can likely file your federal and potentially state taxes for free.
If you make more than $66,00 AGI, the IRS provides fillable forms that are pretty easy to use for your federal but might not be applicable in all circumstances.
For example, California has CalFile which covers most situations. There are also some options for free federal filing if your AGI exceeds $66,000 as the requirements set by Free File Alliance members vary depending on the offerings (e.g. FreeTaxUSA doesn't have AGI limits).
Their UX is absolutely atrocious. It will do the math for you, but there are a number of intermediate fields that require you to enter a value manually, but have no indication in the form of what they are. You have to go through their instructions (separate from the IRS instructions) for the form to figure out what fields require manual entry.
Eventually I was able to work my way through the form with research and experimentation.
The only thing I wasn't able to figure out was how to get it to include the penalty for failing to pay estimated taxes. I added the form to my filing and filled it out, but I could never get the number of populate into the 1040 and their form wouldn't let me enter that value manually. While I would have preferred to pay it all at once, my only option was to wait for the IRS to calculate this and bill me for it.
Can we please, please, please get 18F to rebuild this so it doesn't completely suck? Offering a solid, free alternative to Turbo Tax and other abusive companies would be so beneficial.
TurboTax and HR block lobby considerably to prevent the government from making the process of paying taxes free, fast, and painless for the overwhelming majority of taxpayers.
We can argue that the tax code should be simpler but that's a different argument.
Countries with sane tax collection systems make it easy for you to add those deductions, either on paper or with a web service run by the government, for free.
And your mortgages, unless they are from international banks, yes, the IRS already knows about those too. Let me put it this way: if it goes through a US domiciled bank, the IRS knows about it already.
Yes, people with complex tax returns do use accountants to file their taxes in countries with sane systems too, but the overwhelming majority don't need the complexity for the equivalent of a w2 and/or a couple of 1099s.
Unfortunately, I've found TurboTax is better with weird corner cases. It helped me figure out I was eligible for the American Opportunity Tax Credit (US citizen going to university in Canada) which alone was a few thousand dollars that I would have missed if I had filed a 1040-EZ on paper. It has handled 401k->roth rollovers and cost basis, reporting capital gains (when I divested from Bitcoin), paying taxes on Canadian RRSP capital gains, and sales of Restricted Stock Units. I'll probably pay to use it for the foreseeable future.
In Canada, the tax system is less arcane, so the tax software companies have to give it to university students for free to get them hooked. It's too bad that even if I move to another country, I'll have to file US tax returns for life.
If your tax situation is even remotely complicated it pays to not do it yourself. You don’t know what you don’t know.
At some point it makes sense to DIY; at another point, switching to a professional makes more sense. Figuring out where that line is can be years of "penny-wise, pound-foolish" behaviour of DIY with respect to tax prep.
What's the FLOSS analog to Turbotax?
Just to be clear-- I'm talking about a wizard that asks laypeople a clear set of curated questions and ends up with a set of tax forms that are very likely filled in with the correct answers.
It seems to be relatively well updated but I wouldn't be surprised if it made errors.
Choosing the correct tax forms is the job of the software, not the layperson. If it cannot or will not perform that job then it isn't a wizard (or at least not on the same level of time-saving as Turbotax).
If it's not a wizard then it isn't the FLOSS analog of Turbotax.
Seemed very straightforward, perhaps not as good on the suggestion front as far as potentially reducing your tax burden though.
They also managed to import my prior tax PDF from TaxAct flawlessly, so that's a plus.
My only other issue with them is that they keep emailing me telling me to get started with my filing, but I already completed my tax return weeks ago.
But instead of doubling-down on this delightful product experience, they're investing in disingenuous conversion hacks like the "PLUS Help & Tools" upgrade funnel. Designed to feel like it is part of the actual filing process, users are converted more effectively when they're led to believe this is just another step toward completing their task, similar to how users respond to native ads.
In the UX teardown, I take a more critical look at the design decisions behind the freemium funnel. I wish they were more transparent about their pricing structure up front so users could compare the benefits of products and add-ons against their needs and budget.
That's frustrating about the emails you're receiving even after filing. Let's hope they build out smarter email campaigns next year that are more aware of user actions across all TurboTax systems.
The argument is that the tax code shouldn’t be so complicated that you need to pay a fee to file your taxes smoothly and with little risk of getting it wrong (and getting audited/fined).
Really? Only millenials (whatever that means) are characterized by these values? How do you figure? My experience has been exactly the opposite, actually. But Brandon Read appears to believe that purely because of my "generation", I gravitate toward deceit and trickery. Okay, thanks for that valuable insight, Brandon. Whatever.
honestly it’s standard predatory sales technique that many many companies use, including amazon. (like pretending that prime day prices are actually a bargain)
1) Make <threshold income. (Admittedly, that sucks.) I think it is around $3k/yr.
2) Move to a place which under Section 933 of the IRC can make its own tax laws for bona fide residents. I'm doing Act 22 (and Act 20 for business, and some other things) and taking advantage of the opportunities in the Isle of Enchantment, the Commonwealth of Puerto Rico. There are some similar opportunities for US citizens in the other US territories, but PR is the best one I think, and is certainly the biggest and most developed.
Essentially, until 2035, you pay 0% short term, long term capital gains or dividends. Under Act 20, businesses pay 0-5% on exported services revenue (i.e. anything sold outside PR: SaaS, consulting, etc.). It's pretty nice. Infrastructure is an issue (although gigabit internet is $60/mo), and some costs are higher, but overall it's a good deal. It's hugely popular with cryptocurrency people after crypto to crypto trades started getting taxed fully as st cg.
(Actually I have to file 2018 too, although it will be for <$100, since I think I have some US bank accounts which earn interest.)
This is different than the Foreign Earned Income Exclusion (FEIE), where you get a $100500 (indexed) deduction, but have to file to claim it.
Maybe it was, but Hurricane Maria fucked it hard and it is unlikely to recover anytime soon. Just the other day a tree fell on a repaired power line and 640,000 people in San Juan (the capital!) lost power. That’s just crazy to me.
Savings from 0% tax pays for a pretty amazing generator/solar/lithium ion battery system. The electrical grid is being privatized and turned into a bunch of microgrids (already happening; upscale condo buildings have generators, and the homes of rich people have generators/solar.) The biggest problem is traffic lights, which don't work even in the areas with power, but outside of SJ and first-ring suburbs traffic volumes are fairly light.