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TurboTax Hides Its Free File Page from Search Engines (propublica.org)
881 points by danso 26 days ago | hide | past | web | favorite | 262 comments

Yeah they do, of course they do. They are in business to make money, after all.

The real story is the absolute travesty of government corruption that TurboTax and HR Block have perpetrated by making it illegal for the government to make tax filing as easy as it should be. It's one of the things I would immediately correct if I was king for a day.

This is directly related, I think. One reason the IRS hasn't made it easier is a deal with the industry group "Free File Alliance", which essentially privatizes this (indeed, the page TurboTax is hiding here is their Free File page).

However, while 70% of taxpayers would be eligible for free filing, in practice only 3% do — no doubt because tax prep companies make it so difficult to find and use this option. These companies are offering products like this as a carrot to prevent the IRS from competing with them, and then deliberately making them as difficult to find and use as possible.

Source: https://www.propublica.org/article/congress-is-about-to-ban-...

Edit: As a child comment pointed out, the issue was a brokerage account I opened in addition to the Roth IRA. (The Roth IRA deposit limit is smaller than the 401K deposit limit)


The problem with that is there's often caveats.

Ex: in grad school I did a summer internship, and put my profits into an IRA. Later on, I found out I could not use many free file software, because they considered handling the dividends my index funds had generated as a premium feature, even though I was below the income limit.

Eventually I found out the AARP had a free tax prep program that did not have that restriction (nor was it limited to over 65s), but it took a lot of effort to avoid paying 50+ bucks just to process a tiny, tiny bit of tax because it was in the "wrong" category.

IMHO it's not cool to nudge low income people to not save for retirement.

If anyone else has had this frustration, bookmark this page: https://secure.aarp.org/applications/VMISLocator/searchTaxAi...

I don't think this is true. Under "What you need to get started" on the IRS's Free File information page [1]:

> Forms 1099-DIV and Forms 1099-R, showing dividends and distributions from retirement and other plans paid to you during the year

Note that there is a difference between a tax product's freemium tier (where they can upsell) and their Free File product (where they cannot). A big part of the problem here is that these companies do their best to make you conflate the two — and then hide the second one, so they can upsell unsuspecting taxpayers who don't know the difference.

[1] https://www.irs.gov/e-file-providers/what-you-need-to-get-st...

Yeah, I think GP was fooled by TurboTax.

See this twitter thread from ProPublica where you can't proceed in two scenarios without an upsell...because you aren't actually on the Free File page: https://twitter.com/propublica/status/1120404531433672705

I'm confused. Income in an IRA isn't taxed, so that's not relevant for taxes. If you had post-tax investments then yes it's more complicated, but that has nothing to do with IRA/401k retirement savings?

I assume they meant a Roth IRA, which does tax deposits.

I may have mispoke. In addition to a Roth IRA, I also had a traditional brokerage account. It's my understanding even if you invest in index funds/ETFs, some of the stocks in the funds generate dividends and those can be taxable even if there's no capital gains tax on the growth in value of the index fund/ETF.

Anyways, whether it was from the brokerage I opened or the IRA, I had a class of income that would have made me need to pay to file, even though my total income was below 65k.

Another thing was foreign taxes paid (because some funds in one of your indexes are international). But they don't let you just say "listen, I'd rather skip the credit for those two whole dollars in taxes and not pay 50 dollars to file"

That's a rather big misstatement: most lower income people (most people in general actually) won't be investing post-tax, a 1099-DIV really is quite uncommon

It's still a shitty and stupid situation... but that doesn't mean it's relevant for most free filers.

You should be able to skip the foreign tax credit if you manually enter the 1099-DIV: simply enter foreign taxes paid field on the 1099-DIV as 0, and your tax software won't offer to credit it.

Am I correct in understanding that interest paid to deposits at a credit union get you a 1099-DIV? And wouldn't that mean virtually everyone who banks at a credit union would get that form? Also, anyone who owns savings bonds or CDs. Those are out of fashion these days, but many people still get them. Your point stands that these are still not the majority of the population, I just wanted to add some more pathways a person might get such a tax form.

>Am I correct in understanding that interest paid to deposits at a credit union get you a 1099-DIV?

No, income from interest paid on deposit accounts is reported on form 1099-INT, not 1099-DIV.

1099-DIV is for dividend income. 1099-INT for interest income. They are are reported different places on your tax form.

Nowadays most people don't get 1099-INTs from their banks or credit unions because interest rates are so low most people are making no more than $1-$2 a year in interest because rates are so low and financial institutions aren't required to issue 1099-INTs for interest income below $10. I used to get them from my credit union back in high school when rates were higher.

Ok, the confusing bit for me is that credit union deposits are called shares and the earnings are called dividends. However, you still get a 1099-INT, I believe because these shares are not considered securities.


Ah, yes, I can see how that would be confusing.

I never bought into all the credit union jargon ("share," "share draft", etc.) so I forgot they pay "dividends" instead of "interest."

In short, I believe this is the way it works: because credit union members are owners of the credit union, the profit paid to members are considered dividends by dictionary definition, however, the IRS considers them interest by their rules. Just like VA disability, getting a check from the government every month is obviously income, but the IRS doesn't consider VA disability income by their rules.

All it takes to generate $10 in interest is $1000 in a 1% savings account or $500 in a 2% CD. Anyone with even this small a savings will be issued a 1090-INT, no?

No because rates aren't 1-2% in a typical savings account from a standard bank. If you want 1-2% interest you'll have to have a "high interest savings account" which have historically been online-only offerings and most people really can't be bothered to open up a new account and manage multiple accounts and do the transfers.

For example, if you had $20,000 in a Chase savings account AND had a "Premier Relationship" with them then you'd get an interest rate of 0.04%, or a whopping $8 in interest for the year.


Its worth noting that rates have gone up significantly in the last year and a half, at one point it got to the point where checking accounts and savings accounts had the same interest rates at many banks and many people stopped using savings accounts entirely at that point.

Online makes it even easier. I opened a >2.5% 12 mo CD online and it took an hour max. No pre-existing relationship with the bank.

The high yield savings accounts tend to have a few strings attached but nothing I’d consider a barrier to someone with at least a job that offers direct deposit.

The biggest barrier to getting a 1090-INT is not the bank or the APR. It is having a low income and not enough money to save.

Of course, I'm not arguing its difficult or there are any barriers, I know its easy. However, I literally can't convince a single person beyond my sister to open up a high interest savings account. People just don't want to be bothered.

Me? I currently have fifteen (15) bank accounts. Chasing those sign up bonuses.

> However, I literally can't convince a single person beyond my sister to open up a high interest savings account. People just don't want to be bothered.

High-interest savings account are crappy as investments, and I'd you have to go to a different institution (or use a CD, or both) lack the frictionless (and instant) connection to primary checking that is generally the reason to use a savings account vs. a decent investment vehicle.

I can't recommend online banking enough. Fidelity and Schwab both have excellent offerings. At least through Fidelity I can buy high interest CDs for multiple banks without having to deal with the hassle you're referring to. Free checking with refunds for any ATM fees anywhere. Easily move money from checking to investment accounts and back. Open new account online within minutes. I have a car account where I set aside money for my next car, an emergency fund, a college savings fund (529), an IRA, and others. Ten accounts in all, all under one convenient interface. They even slurp in the data from my workplace 401k at a different bank so I can track that in the same place.

That may have been what caused it as well. It was a while back and my memory is fuzzy.

I've since optimized my investment strategy (small amount in checking, rest in investments)

The IRS doesn't require institutions to generate 1099s for <10 dollars in interest.

Many people's companies don't offer 401ks.

The limit for IRAs is lower than that for 401ks. It is very common to open a brokerage account if you had more than 5500 you wanted to put away.

(Ex: grad student who interns in the summer, contractor with boom and bust pay cycle, or any worker in a company that doesn't offer a 401k)

>You should be able to skip the foreign tax credit if you manually enter the 1099-DIV: simply enter foreign taxes paid field on the 1099-DIV as 0, and your tax software won't offer to credit it.

I'm not sure it's legal to lie about the contents of the 1099-DIV, even if the lie is to the government's benefit :)

Capital gains and dividends in a Roth IRA is not taxed either.

They clearly mean they ALSO had a taxable brokerage account that generated dividends; saying they contributed to an IRA was an (unintentional) misdirect.

Yes, I've been upfront about the error, acknowledged it, and I've edited the original post.

I still stand by my assessment it's not cool to nudge people not to save.

There are many people who'd like to save, but don't have 401ks. (Ex: students doing internships, contractors, or people working in the service industry)

The limit for a 401k is ~18k IIRC and ~5500 for an IRA IIRC. If you had say, 10k from a summer internship, you'd put the difference in a normal, taxable brokerage.

Having a brokerage account does not mean one is affluent.

To be pedantic, the total pre-tax 401(k) contribution limit in 2019 is $19k ($25k if you’re over 50). But the total defined contribution limit (employer+employee, including after-tax) is $56k. So if you were so inclined (and fortunate to have the income) you could sock away $56k through an employer plan, including pretax, company match, and post-tax.

IRA (traditional and Roth) contribution limit in 2019 is $6k.



If you're self-employed (e.g. contractor) can set up a SEP-IRA and do "employer" contributions in addition to the regular "employee" IRA contribution.

Another option is a "solo" 401k account but there's more paperwork involved.

Growth/income in the Roth IRA is also tax-free (there'd be no point in the Roth otherwise).

IRA/401k contributions are pre-tax and thus tax deductible, so you need to account for that deduction in the current tax year. The income produced within the IRA/401k is taxed upon withdrawal.

Roth IRA/401k are post-tax investments, and thus not tax deductible. And the income they produce within the IRA/401k is not taxed upon withdrawal.

Ergo, traditional IRAs are more complicated because you have to account for the deduction in the current year, and you have to account for income tax (as well as FICA by the way) upon withdrawal, plus there are mandatory distribution rules based on your age. The Roth IRA are less complicated, no deduction claimed therefore no deduction to prove in the current year, and no taxes to compute on withdrawal, with no mandatory distributions.

>The Roth IRA are less complicated, no deduction claimed therefore no deduction to prove in the current year...

The big exception is if you are lower income you might be eligible for the Saver’s Credit for the current tax year based on your Roth contributions.

Exactly this. Amount of income is actually quite a crappy measure for what should be free to file. If it’s flat W2 income with nothing else to consider then sure...

When you start adding in all these other little side cases you’ve blown your argument. They literally take more effort (either on your part deciphering and completing, the CPA’s part deciphering and completing, or Turbotax’s part developing and validating). Yes you made practically nothing this year but it was in incredibly uncommon ways and that makes it more complex than a simple 1040EZ.

A 1098 caused me to have to pay turbotax 70 bucks. Instead of doing that, I just switched to H&R block which remained free shrug

Funding an IRA is "incredibly uncommon"?

If you’ve got only W2 income then a 401k would be much more common. A normal IRA is “common” as well, but not nearly as much so I’d argue.

As another comment pointed out it could have been a Roth IRA, which has different rules. It could also have simply been some other oddity or quirk of the tax software at the time.

None of the specifics negate anything related to complexity vs cost.

You can have both an IRA and a 401(k) and contribute to both in any given tax year (up to limits set by the IRS for each individual account).

In fact, you SHOULD have both since 401(k)s are hugely inflexible compared to IRAs so it makes sense to fund an IRA before a 401(k) unless you're getting a match on the 401(k) contributions. So if you want to save 10% for retirement and you get a 5% match on your 401(k) then it usually makes most sense to put 5% in the 401(k) to get the match and 5% in the IRA for control and flexibly.

If you then want to bump up your your retirement contribution to 15% then 5% should go in the 401(k) and 10% into the IRA, staying within the legal IRA contribution limits. Once your IRA is maxed out, then the remaining should go into the 401(k) (until your 401(k) is maxed out, of course).

401(k) can also be rolled over to IRAs when you leave your employer, so even someone who only contributes to a 401(k) will usually end up with an IRA.

> In fact, you SHOULD have both since 401(k)s are hugely inflexible compared to IRAs so it makes sense to fund an IRA before a 401(k) unless you're getting a match on the 401(k) contributions.

This really depends on how good your 401(k) is and what kind of investments you want to make. If you just want the standard (and very good) low-cost three-fund portfolio, all 401(k) programs I’ve seen offer these kinds of index funds. If you really want more exotic investments, then an IRA might be better.

The advise to have both is sound though, but the best reason is you want to maximize your tax-advantaged savings. “Flexibility” is a benefit not important to everyone.

>This really depends on how good your 401(k) is and what kind of investments you want to make.

I disagree because 401(k)s can change on a whim though... My company decided to change literally all of our fund options overnight, and we couldn't keep what we already invested in the old funds, we just had to buy into the new funds. So even if your 401k is awesome today, it might not be awesome tomorrow. If your IRA provider decides to change their fund offerings, you can just move to a different one.

Luckily our new funds had perfectly fine choices, but that might not have been the case.

>If you just want the standard (and very good) low-cost three-fund portfolio, all 401(k) programs I’ve seen offer these kinds of index funds.

Honestly, both our original and current 401(k) options didn't/don't have a good international fund, the ones they had had very high expenses (over 1%)

There's also no low cost REIT index on my 401(k) (however, REIT isn't part of the 3-fund profolio)

Unless you change jobs, in which case you might roll over your 401k into an IRA.

I agree, though, that this is a digression from the broader argument, which is that the lack of an easy and unqualified free option (or automatic filing) by the IRS is a particularly egregious case of regulatory capture by the tax prep industry.

My company doesn't offer a 401K, does this mean I shouldn't be allowed to file taxes for free?

The poster miswrote. It wasn't an IRA, but a regular investment account that generated taxable dividends. Much less common.

>IMHO it's not cool to nudge low income people to not save for retirement.

It's not cool to NOT nudge low income people to save.

Correction: 100% of taxpayers are eligible for free filing, and 70% of them are eligible for free electronic filing.

The options out there for free e-filing are hardly any better than the paper option, though. They're typically just the paper forms translated very directly into an electronic fill-in form. You're still left to your own to make sense of all the byzantine rules and instructions, and to grind through it all yourself.

I know because, for the entirety of the time that I was eligible for free e-filing, I didn't bother. Using the PDF fill-in forms and then just printing them out and mailing them gave me very nearly the same UX, with the added benefit of not having to read a giant pile of legalese in order to figure out exactly how some third party is planning to make money with all the financial information I'm sharing with them.

> Correction: 100% of taxpayers are eligible for free filing, and 70% of them are eligible for free electronic filing.

Actually, 100% of taxpayers are eligible for free electronic filing. 70% are eligible for free filing software that calculates everything for you. The other 30% just get fillable forms.

See https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...

It’s my understanding that you can’t personally electronically file taxes unless you go through one of the free file software providers. As someone who makes W-2, 1099, and stock market income, I have never found a way to file for free unless I fill out and print the forms manually and mail them in. I would love to be wrong though.

USPS is not free.

Come to think of it, I had to pay for the paper and toner, too.

And electricity your computer and printer used. And so would you if you'd fill electronically.

Go to your tax office if post is more expensive than physically going to a tax office.

It may as well be. It costs less than a dollar to send a letter through the post.

I used to mail in my tax filings. It would cost me around $5 with the recommended level of tracking.

Filing for free isn't filing easily. In other countries the tax department sends you an automatically completed return and you can choose to dispute it.

There is no option like that for the US, free or paid.

And the restrictions on the IRS offering free electronic filing don’t preclude it from doing what you’re talking about.

Last time I tried to navigate the free system, it ended up being so labyrinthine that I just printed out the forms and did it by hand. Took about 45 minutes for a mix of W-2 and 1099 incomes.

> The real story is the absolute travesty of government corruption that TurboTax and HR Block have perpetrated by making it illegal for the government to make tax filing as easy as it should be

You know this applies to pretty much every service in the US right? A company wants to make massive profits, so it just lobbies and buys the laws it wants.

Healthcare, private prisons, banking, "security" (TSA), education, transport, etc. etc. etc.

If you were king for a day, I hope you'd fix a lot more than just doing taxes.

I don't know why, but all of this "privatization" bugs the hell out of me.

Maybe it has something to with wanting to see my taxes being used properly, rather than going to a private company's profits. Maybe it's the abstraction; that'd I like to know that the workers I see doing the work for the government are government employees, and that I am, in some small way, helping them?

I mean, sure, with a private company that's still a thing - but maybe I also like seeing road crews with the city's emblem and such working on issues - not a private company doing it?

You know that here in the USA, there is virtually a single private company that handles emergency and construction signage in every state? When you see signs out that say "Road Construction Ahead" or the flashing signs on trailers, or even just some construction cones - all of those are owned and placed by virtually one company?

The name of the company is "United Rentals" - and while if you look on the back of those signs they may have different company names printed on them, when you call the number, it will always patch you through to the United Rentals phone bank/answering service. You might call "Bob's Signs" - but United Rentals will answer.

We can't even handle placing road signs out using public means and employees.

I'm sure somewhere in all of this, it was done as part of the whole process of breaking up (public) worker's unions.

It’s done because private industry in most circumstances, does it better than government can, and at the end of the day it can be significantly cheaper and less of a boondoggle than if government did it all themselves as government likes to do.

Think of the professional experience, supply chain, and logistics for each industry where you could theoretically involve government to control or produce on it’s own.

The error of rolling everything possible under the sun into a government department, like sign laying, is you get a sign placer sitting around making a unionized $60k-$90k/year (for a $35k-$40k/year actual job), with a massive retirement pension that you will continue to pay for forever, a huge tax bill to cover the storage of all of these signs that the government has sitting around on a dirt lot somewhere, because they have zero incentive to rent them out and make money on them while not in use, and crumbling infastructure when the entire cost of the government does all attitude sucks the tax base and economy dry.

United Rentals, as a private company, has a vested interest in running their company efficiently, renting out a maximimum share of their inventory for the most profit, and their profit derived from this is not immoral behavior because it saves all of us money at the end of the day and employs a lot of people along the way. This is one more thing we won’t have to worry about the government screwing up as tax payers.

Now, let’s say a senator wrote a convoluted law that made it so only United Rentals can supply signs for government projects, cost be damned. That’s a more valid argument for moving it under government control if there is corruption and rent seeking behavior going on.

>you get a sign placer sitting around making a unionized $60k-$90k/year (for a $35k-$40k/year actual job)

>United Rentals, as a private company, has a vested interest in running their company efficiently

Indeed! So instead of the above, you get a non-unionized Joe the Sign Placer getting $25K/year for actual job (efficiency!), and Bob the CEO/Shareholder netting $25M/year of the difference.

The government doesn't spend any less though, because:

1)Bob is the only game in town (at least as far as govt. contracts are concerned)

2)Bob pays the government for it to continue that way

>Now, let’s say a senator wrote a convoluted law that made it so only United Rentals can supply signs for government projects, cost be damned. That’s a more valid argument for moving it under government control if there is corruption and rent seeking behavior going on.

My only nitpick for this would be replacing "if" with "because".

> It’s done because private industry in most circumstances, does it better than government can, and at the end of the day it can be significantly cheaper and less of a boondoggle than if government did it all themselves as government likes to do.

But we have to keep in mind the only way to have citizens reap the benefits from this efficiency is by competition of the services offered. If for any reason competition cannot arise, outsourcing the task away from gov makes little difference while giving away a lot of the control/accountability we had.

> It’s done because private industry in most circumstances, does it better than government can

I hear this often, but I haven't seen very many examples of it in practice. But it depends on what, exactly is being privatized.

Many are convinced that paying the workers, the lobbyists, shareholders, board of directors, and contract overhead is cheaper than just paying the workers directly.

I've been investigating why people think this for years. I've read a number of books, listened to lectures, went to proseminars in economics at UC schools, took some classes ...

Recently, I've become increasingly convinced it's actually just a giant hustle. It's an elaborate ploy that makes people money. Things like Demand Theory or the Efficient Market Hypothesis are modern astrology psuedo-sciences with real world evidence that's incidental or statistically insignificant at best.

This is especially true for the second-order implications like privatization.

There's no persuasive material evidence of the purported theory that privatization is more efficient. The most favorable evidence from the supporters (for instance, Megaprojects and Risk: An Anatomy of Ambition by Bent Flyvbjerg he has 3 more on the topic) say that private and public projects are about the same. They go over budget about the same and fail about the same.

Other more critical quantitative studies show dramatically better outcomes for publicly controlled systems - look at Oxfam studies for instance.

There's also a lot of evidence that the private systems however mint millionaires who make an absolute killing off the taxpayer.

Just like 500 years ago how religious people controlled the narrative and set up the rules of society and "laws of nature" to basically be giant money trees for them, there's a new class of people who have done the same thing.

Recently I've been studying where this economic school originated from (essentially Chicago Boys style) and what was driving it. I haven't found any serious scholarly work on it beyond things written by journalists.

The journalists track it to various organizations that formed after the new deal (each author has a different boogeyman) but the narrative is essentially the same: create think tanks, pack the colleges with favorable people, witch hunt the critics through red/left/whatever baiting, silence alternative views, create a media through movies, news, and television that support this view and so on.

Not because it's accurate, right, or correct - but because it makes them a lot of cash. The narrative actually changes.

Groups like the Heritage foundation or the American Enterprise Institute move their goalposts constantly over the years and defend it on supposedly principled economic grounds.

The problem is that you can often find, such as in healthcare, documents where they make multiple fundamentally contradictory arguments because the underlying market mechanics they defend are pliable devices of convenience to push the agenda of making private capital and that's literally it.

There's nothing deeper, nothing more fundamental. It's a giant hustle.

This is largely correct. Simple case: the local school district here in a suburb of Boston provides a school bus service. So did the one I attended in New York.

The one in NY owned a fleet of diesel buses, a central depot to put them in, a repair facility next to the depot, and paid administrators, mechanics and drivers. Every so often a wave of buses were replaced.

The one in MA pays a bus company that does all the same work. The bus company makes a profit. Interestingly, they aren't scaled -- this bus company serves this school district, period.

In theory, the MA school district could look for another vendor if the price got too high. In practice, every bus company is already at their capacity and could not expand to cover another district without a major capital infusion to fund another depot, repair shop, and more buses.

In any situation where one could reasonably argue that a private company could scale, one would have to also accept the argument that the government could scale at an advantage because they don't need to make a profit: depots and buses need to be fairly local, and while they can be consolidated to some extent, one might as well handle it as a multi-district service - a county or even state-wide.

Arguments based on a private company being more efficient because of competitive pressures don't work. There's no competitive pressure.

Arguments based on private companies being less corrupt don't work. Mismanagement happens everywhere.

When it comes to public services, privatization always means a handout to the owners.

You can also see this very easily in the UK.

One city in the entire country has essentially all its transport infrastructure owned by the government (some of it is operated by private companies under license). In every other city they're a mess of private companies.

Result: In that one city (it's London) the transport infrastructure works as an integrated whole and everywhere else it's just a bunch of assemble-it-yourself components.

Private bus companies actually operate the buses in every city, but in London those companies have to work for the government, their contract says all the buses must look alike (they're painted red, if you've visited or thought of visiting London you can probably visualise one) and work alike (taking contactless cards) and so on, they're all part of a single system. In London you don't care which private company operates the bus you got on and pays the driver, it says "35" on the front, it's a 35 bus, sorted. In my city they're just three (or maybe four?) different private companies, different livery, their timetables aren't co-ordinated, they have different overlapping number schemes, and different fare schemes - if I have my City card but I'm on a Blue bus that's no good, I'll have to pay by credit card.

Why? Because as in the US one of our political parties dogmatically believes that privatisation is better, and confronted with the fact that it doesn't work their answer is more privatisation. Nationally many people keep voting for them anyway. In London not so much.

I find it telling that I know the public transport better in London than my own city - it's just easier.

> Just like 500 years ago how religious people controlled the narrative and set up the rules of society and "laws of nature" to basically be giant money trees for them, there's a new class of people who have done the same thing.

It's still religion, in terms of the psychology behind it. It's just a religion devoted to money. Every middle-income person has been fooled into thinking that they're a CEO for a company of one, so instead of viewing taxation and public works as good for their fellow human, they've been trained merely to see the dollar signs draining from their coffers.

Individuals in the U.S. now truly believe that their lives are better keeping the additional 10% (or whatever) of their income than letting that be used for the public good. They physically can't allow themselves to see the cumulative potential of everybody giving an extra 10% to the public good, and just how much improvement their lives could see from it.

People have been trained to see the government as a black hole of money wasting. I mean, the myth that NASA spent millions on developing a space pen while the Russians used a pencil -- haha I can't believe how stupidly the feds spend money -- persists to this day, despite it just not being true. A private company developed the space pen, NASA bought a few thousand, and the Russians also ended up developing space pens. But no, the myth is now ingrained. I remember being told this as a fifth grader.

And yes, there is corruption in the public sphere that has strong negative effects on the efficient investment of public funds. But where does this corruption stem from? Sure, there's the occasional bad actor Congressman who's in it just for his own pockets. But the bulk of the systemic issues are heavily influenced by the corrupting influence of giant, private corporations.

> But where does this corruption stem from?

Honestly, I don't think there's a point in asking whether corruption is more a government thing or a private thing.

Corruptions stems from the same things trade does - more than one people, each having desires and something someone else needs. It happens when a person, through temptation or duress, decides to enrich themselves at the expense of the organization they're working for. It's a fact of life, and I think the only relevant question is, for any given organization, how is it structured to combat this quite natural phenomenon.

"People have been trained to see the government as a black hole of money wasting."

The state and federal governments are large enough that pretty much everybody has either worked for them or knows people that have. So it's not really helpful to tell people they are brainwashed and don't know anything about reality. Sure, lots of people are stupid or misinformed, but that doesn't mean they have no experience with what they dislike.

I have worked for a Fortune 500 company, a non-profit subsidiary of a state university, a federal contractor, and a state government (but not in a civil service protected position). Have you experienced first hand the different types of organizations in forming your opinions?

> I don't know why

You know exactly why it bugs you and you're absolutely right. I think what's confusing is how can other people NOT see these huge problems

United and Sunbelt rent out basically everything you need for a construction business. Think of it as spinning up more instances in the cloud. It's actually often cheaper after taxes to rent than to own, especially if you need 10mi of traffic barrels but only for the duration of the project. Since construction is highly seasonal it makes sense that a lot of the stuff you need on a per-job basis is owned by a few central rental companies. I bet if you tracked individual items you'd see them migrate north in the summer and south in the winter.

Ahh yes the classic "muh roads" comment.

The sad thing is that this is being exported across democracies around the world. This subversion of the democratic process would probably bring to its demise. And the waters are so muddled with identity politics and false enemies ("Bolsheviks") that we can't even have civilized discusssions on this problem. Sad state of affairs.

Almost all prisons are public. (Private prisons are illegal in some of the states, like New York, with the worst records of prisoner abuse.) TSA is a big public agency. Transportation infrastructure is almost entirely public. Education is almost entirely public.

I believe this is a consequence of treating a financial policy as a religion or otherwise a fundamental truth. Everything is so much about money and accumulation that it subsumes everything else.

I can’t see another reason why the lessons we learned from capitalism in the booming 20s and the following crash have very quickly been unlearned, as if the free market is a perfectly just and omnipresent force. Couple it with the utterly rabid obsession around communism and socialism, which might as well be swear words.

This logic only holds true if you are the benefactor (one of the wealthy) or you think that you will become one.

There's a good Planet Money episode about this, in case you like podcasts: https://www.npr.org/sections/money/2017/03/22/521132960/epis...

That was a great episode, the guy funded a lobbyist from his own pocket to the tune of $70k but still lost

The best part, IMHO, was the Republican Senator they interviewed that came out and said that they (Conservatives in Congress) wanted tax filing to be onerous.

Really makes me appreciate the ATO (Australia). Free online tax filing has been a thing for quite a few years. You end up with an accountant only if your tax is somewhat complex, which tends to correspond with higher income.

Or places like the UK where most people don't even need to do a tax return and if you do doing it online for free isn't too bad - only time I've used an accountant was when things were when my tax affairs were moderately complex.

So basically the same as the US.

In Australia, like in Europe and most countries, when you log in to do your taxes, your forms are pre-filled with everything the government already has on record for you.

You can add to it or modify it as you see fit, but the vast majority of people just accept the default values and they're done.

Most people spend more time finding their login info than verifying their taxes.

With the amount people complain about the US system, it doesn't sound like they are doing the same thing.

That's definitely better than what we have in the US, but the majority of people in the US don't need more than the standard form 1040 [0], which isn't too hard to fill out. Tax software vendors and accountants want people to believe its more complicated than it really is, when in reality most people only have a single source of income, and maybe a child tax credit and mortgage interest credit. For these people, doing taxes "by hand" shouldn't take more than 10 or 15 minutes.

[0] https://www.irs.gov/pub/irs-pdf/f1040.pdf

That form isn't long, but would be less intimidating if it were spread out over 3-4 pages, with larger fonts and no abbreviations.

Compare a UK tax form (not for the usual, simple case; I don't know if there is a form for that): https://assets.publishing.service.gov.uk/government/uploads/...

(Although as it says, 92% of people fill in this form online. I can't look, as it requires a login, but it should be a good UX going by the other forms on the gov.uk site.)

> not for the usual, simple case; I don't know if there is a form for that

Most people don't require a tax return. They are on PAYE[1], which just happens (you don't have to think about it or actively do anything). _Generally_ speaking, you only need a tax return if you are self-employed as a 'sole trader', or are a partner in a business partnership, or have untaxed income such as money from renting out a property, tips and commission (over £2,500), income from savings, investments and dividends (over £10,000), or foreign income.

[1] https://en.wikipedia.org/wiki/Pay-as-you-earn_tax#United_Kin...

> of course they do. They are in business to make money, after all.

Companies can fulfill their obligations without resorting to trickery. They clearly aren't meeting the spirit of their obligation/commitment and therefore should be punished. So, the government should punish these companies by implementing your second point. If it wasn't clear previously then the industry behavior has now made it obvious they act in bad faith, and are a detriment to both consumers and society in general.

I would be happy for if the government made a free-file api and let for-profit companies and open-source projects alike create solutions for consumers. It would be like the government owning the telephone poles and letting any ISP run their cables on it to try and compete for customers.

If the government made it easy, the default tax form would give no benefit to the taxpayer. Many uneducated people would just hand it in and not have any write offs/deductions anyway. By making it require a small amount of effort, people are forced to take a look at what they are paying.

People with money/educated about taxes would actually take the time to fill out the forms and benefit from deductions. It wouldn't really make that much of a difference.

I also am wondering what is so difficult about taxes now? Most people with 1 or 2 jobs just need to fill out a 1040 form, which takes an hour or two at most, and send it in.

I really don't think we benefit society by catering to an uneducated/indifferent populace.

I don't understand your argument at all. You seem to be arguing that making taxes difficult is a good thing because it's educational? I disagree. All it does is increase the time and expense of doing taxes.

> People with money/educated about taxes would actually take the time to fill out the forms and benefit from deductions.

I don't think this is universally true. People will do a cost/benefit on this stuff. For some people, it will be worth the tradeoff required to maximally reduce taxes. For others, it absolutely is not. Why penalize the latter group?

> I really don't think we benefit society by catering to an uneducated/indifferent populace.

It's not catering to a specific group, it's avoiding penalizing that group. From my point of view, intentionally making taxes complex really amounts to an additional unwarranted tax on people.

Part of the problem is of course the convoluted tax code in the US with all the very specific deductions and odd cases, where other countries may have much more simplified tax codes to avoid the problem completely.

Meanwhile, California makes it pretty easy to file your state taxes for free, with no intermediary https://www.ftb.ca.gov/online/calfile/index.asp

I am the developer in charge of this, thanks for promoting it.

Thanks for your work, I'm a big fan of Calfile for the years when I'm eligible to use it. Out of curiosity are there any plans to support returns with capital gains?

Thank you for using it, unfortunately no. I don't qualify to use it myself either.

Thank you very much! I feel like all states (and the feds) owe it to their people to make free, transparent, online tax filing available.

Really, though, I remember when I was in college and grumbling about having to pay for turbotax only because of state, and then finding out this existed. Made my week!

Thank you for fighting the good fight!

Is this full time work e.g. do they keep a team to develop and maintain it year round?

It is only me on Dev side of it, and I say around %60 of my time is spent on this app. we do maintain it year around and add features to it.

I am in the process of a complete rewrite of it, to make it more accessible(law mandated), and adding some extra features.

I hope someday they let you (as in, pay you for your time, not just give the OK) write a bit about that process. Always interested in hearing not just about the software engineering process and stack, but any specific factors or issues when making and iterating on such public-facing software.

Perhaps you can expand it so that most software developers can use it? The fact that capital gains are excluded from the e-file is really frustrating when the majority of us have RSUs/ESPPs.

I WISH it was up to me, lots and lots of bureaucracy!

Every voice counts! Bring it up with your manager and help push the message up the chain!

+1 to CA FTB. My federal tax return was 30 Pages long. I decided to use TurboTax small business to keep it in check - I had a promotion that gave it to me for free ($119 value) but it was extra for state efile ($59.) I went to the franchise tax board website and filed state for free using my federal 1040 in about 10 minutes.

Meanwhile in Wyoming, Washington, Texas, South Dakota, Nevada, Florida, & Alaska there are no state income taxes which is even simpler.

Unfortunately it's useless to almost all software developers/engineers in the state because they don't include capital gains.

There's a pretty huge list of disqualifying things actually, though capital gains (even $1) is probably the biggest restriction. I wonder why they can't handle this - its not that obscure.


Probably because they got lobbied by tax preparation software companies to exclude it.

My capital gains have no difference in treatment between CA and federal. It's just one line on the form. It's ridiculous I can't use CA electronic filing because of this.

Illinois does too on the state Department of Revenue's website! Hooray for state government!

Illinois made me file in paper this year because I am an out of state student. Next I can file electronically.

I've been using TurboTax for the last 4 years or so but I'm getting pretty tired of this story. I read an article a few weeks ago that mentioned CreditKarma has free tools for tax prep, so I signed up for it and I'm planning on using it next year.

I used to use an accountant because my taxes were kinda complicated, but once I sold my business they got really easy. Turbo makes it slightly easier, but honestly the IRS should just be telling me how much to pay or refund, given a small amount of input (like this year, change me from single to married with this other person filing jointly).

And worst, the last several years I've gotten letters from the IRS late in the year saying "You owe a few thousand dollars", this after Turbo got me a fairly big refund.

IRS: If you have a number in mind just tell me.

Oh, and you know that upsell Turbo does for "have your filing reviewed by a CPA and talk to a tax expert to answer questions on your filing"? I tried it this year: Couldn't find an option to have it reviewed by a CPA before filing, and when I asked one of their tax experts about a number related to an IRA disbursement last year, basically all he could tell me is "Yes, you have put a number in a box on the form".

I'd recommend https://www.taxhawk.com/. Its 100% free for federal and $15 for state; seems like a pretty ethical company/product. You can even do your federal for free without doing your state (I've done this when I needed to do state on paper for complicated reasons). You can also use it to generate the 1040 and mail it in rather than e-file if you wanted to for some reason. No dark patterns or upsells.

I gave CreditKarma a go last year to see how it compares and in my opinion, the TaxHawk UI is way better than CreditKarma, and the UI is the main reason I'm using tax software in the first place. TaxHawk also covers a lot of cases where CreditKarma doesn't support.

Some people are also worried about the "free" price point of CreditKarma ("if you're not the customer you're the product"). I'm not one of them, personally.

>I'm getting pretty tired of this story. I read an article a few weeks ago that mentioned CreditKarma has free tools for tax prep, so I signed up for it and I'm planning on using it next year.

This is exactly what I did this year and it went incredibly smoothly. It felt a lot like Turbotax, but Credit Karma was noticeably faster without all the confusing upsells (I did my and my wife's taxes in ~30 minutes, including three W2s and investment income from two banks; almost entirely within the iphone app).

Personally I think the writing is on the wall for Turbotax et al. Credit Karma got much better from year 1 to 2 and I predict it will be increasingly recommended in future years, starting a race to the bottom in the industry.

I've used Credit Karma for the past two years, and I'm planning on using them again next year. I have paid zero dollars for things like investments that TurboTax would upsell to me, and as far as I know Credit Karma doesn't do any unsavory lobbying. Highly recommend.

Can I pay Credit Karma to do lobbying AGAINST HR Block and Intuit? :-D

Arguably their agreement to "offer" the free service necessarily requires it's discoverable by normal means, including search.

“But look, you found the notice, didn’t you?” “Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”

I learned a little while ago that H&R Block makes a substantial amount of its revenue from "refund anticipation loans" (no citation, I couldn't find it here: https://investors.hrblock.com/static-files/4293dedf-951d-454... maybe my information is overblown).

Is there a reason there isn't a "Robin Hood for Taxes"? A service that makes all of its revenue off of refund anticipation loads and provides all tax services for free to entice customers to join?

Ignoring the problematic conflicts of interest involved in issuing loans it seems like this would align a lot of incentives. The company wants tax filing to be as simple and easy and free as possible, just as long as you do it through them.

Credit Karma does legitimately free filing

I prepared my taxes with Credit Karma, then with Turbo Tax, and CK was showing me a significantly higher return that TT. Upon investigating, I found that I had accidentally claimed my mortgage interested deduction twice, and didn't enter my 1099-G from my state tax refund from the previous year.

CK makes it too easy to make a mistake. TT is a much more polished product, which makes sense since they've been doing it for decades. I trust TT more than CK.

That said, TT doesn't charge you until you file. So I use both, make sure the numbers match, then file with CK for free.

Credit Karma just added free audit defense to their tax prep

I file free with DIY tax (freetax.com). I've been using it for several years, but it's not well advertised.

I'm a big fan of Credit Karma, but one huge stickler I have with them is that they block you if you're in a foreign country. You have to use a VPN. I check my credit reports through them regularly, and I had to use a VPN while traveling.

I mean, they're not the only ones who do this. Sprint completely blocks you off, if your IP is from a foreign country. And they seem to be using a system that can detect VPNs, so with popular VPNs, you still can't access sprint.com. Ref: https://www.reddit.com/r/Sprint/comments/aweu0u/cant_access_...

Credit Karma is legitimately bad software.

Credit karma

This goes way beyond dark patterns and ux strategies to push people towards paid options. This is manipulating search engines to hide their services when searching for "free tax filing". If they're going to offer free services, but hide them from potential customers, they might as well not be offering them. if they're not offering them, then they're not holding up their end of the bargain with the IRS.

Yeah, this isn't just a dark pattern, this is a black hole pattern, this is a scam. With a dark pattern there is a way, if you're careful, to navigate through things and get to the desired outcome. Here there was no such route, you had to have entered from the correct starting place to begin with to have a chance at all, and that entrance was hidden from the public.

I popped "file free tax returns turbotax" into Google and found the page directly listed. The page in question is https://turbotax.intuit.com/personal-taxes/online/free-editi...

The robots.txt for the intuit.com domain is: https://turbotax.intuit.com/robots.txt

Not listing in robots.txt to block the personal-taxes folder, which has many offerings and a sub from that is the free one.

I'm not seeing the block that the story is on about in search and in robots.txt

What am I missing?

[EDIT ADD] Thank you for all the replies, I see what they did there now.

You're missing that the Free File Program and Turbotax "Free Edition" are entirely different things:


> TurboTax Free File Program is geared towards lower-income filers, regardless of tax return complexity, and is only offered through the IRS Free File Alliance (FFA) program. No upgrades are available.

> TurboTax Free Edition, on the other hand, can be used by higher-income filers but only handles simple returns with no additional schedules. Upgrades and add-ons, such as TurboTax PLUS and Audit Defense, are available.

That's not their freefile page, that is their more limited free edition page. That's part of the confusion. The /taxfreedom/ page, which is linked to from the IRS website, is blocked in robots.txt


That is not the free file page, and the fact that it tricks you into thinking it is is exactly the point: https://www.propublica.org/article/turbotax-just-tricked-you...

As the article mentions, it's set in the metatags of the page https://turbotax.intuit.com/taxfreedom/:

    <meta name="robots" content="noindex,nofollow,noodp" />

Good thinking, and nice username!

The article does conflate the meta tag and the robots.txt though (which means very little in the broader context).

The Free Edition basically dark patterns you into a paid version of TurboTax at the end. My friend in grad school was confused and ended up paying for the deluxe version, even though she started on the free version and makes like a thousand dollars a month.

The page you found is a different page, not related to the IRS' "free file"/FFA program for those who make under a certain amount. See previous coverage here: https://www.propublica.org/article/turbotax-just-tricked-you...

The version you're seeing is the freemium version of TurboTax. While it says it's free, it's attempts to upsell you into paying for filing.

The version that propublica is talking about is actually free for the whole service.

As you can see by everyone's responses, you've been sidetracked -- exactly TurboTax's objective.

You got tricked! Now think what happens to less tech-savvy people.

It's an idea so dumb that you need to pay for a software that the only reason to exist is for you to pay your taxes, Brazil gets a lot of things wrong, but at least our government provides a software available for every platform (windows, mac, linux, ios, android and even a jar, so if it runs java, you're fine) for us to do our taxes.

You need to pay an accountant only if your taxes are complex, and even them will use the software, they just know more about how to structure your data to insert in the program, it is honestly insane that a company like turbotax is needed, but lobby is really a powerful tool.

Software takes time to develop, and time is money. Tax software is especially bad because 1. the rules are insanely complicated and 2. the insane rules change every year requiring updates.

The real question is why don't we have open-source tax software? I'd argue that since 1. IRS is publicly funded and 2. they have to write code anyway to enforce the tax rules as they change, then they should just publish that code.

At a first step, the tax rules could be published in a machine-readable format.

I get what you're saying here (and generally agree), but I really think it's worth taking a step back when "the law is too complicated for humans to follow it; machine-readable versions should be available" starts making sense.

Imagine if the speed limit was a function of current local wind speed (as measured by one of three airports, depending on the time of day), tire pressure, the azimuth of the sun, etc, and that large companies had digital speed limit signs outlawed. Saying, "Oh, we'll just mandate that all cars carry the necessary equipment to calculate the current speed limit" is probably the wrong approach. The solution is to do away with the convoluted calculation because it doesn't add value in the first place.

Fuck Intuit. Shame on engineers who work there.

I'd rather shame the government that allows Intuit to have their way with taxpayers. Intuit exists primarily because of the convoluted tax filing process in the US afterall..

Intuit lobbies to keep taxes complicated so they can continue to have a business model.


And this is surprising because? It would be surprising if they didn't do that, honestly. The government is at fault here for selling political power and not representing the interests of the people. We could boycott Intuit, I suppose, or use different products, but aside from that, the fault and source of the problem lies squarely with the government.

I truly don't understand this logic. If I found some legal loophole by which I could indiscriminately murder people with no repercussions, no one would excuse it with "well, technically he was allowed to do this so why are we surprised?"

And if I were working with the government to create that loophole… I mean, in this scenario, I'm still murdering people, right? Should my conscience be clean because the government wasn't representing the interests of the people? How is any of this ethically exculpatory?

> If I found some legal loophole by which I could indiscriminately murder people with no repercussions

That's a pretty absurd argument. And the government can actually kill people legally, by design.

All I'm saying is that Intuit is a symptom of a larger problem with gov selling political power. Intuit is trash for what they're doing, I agree.

Haven't you heard? "Incentives made me do it" is an excuse that frees you from all responsibility!

Why is there always someone who injects "surprise" into every controversy? Who's talking about surprise?

We weren't talking about surprise - we were talking about shame. Just because something is legal doesn't mean it doesn't deserve shame. You come off as being oddly defensive towards Intuit.

I think it’s reasonable to feel surprise at learning that this is allowed to happen. Why the surprise-at-surprise style reaction? It makes people feel a bit mocked.

How easy it is to file has little relation with how complicated they are to prepare. That article is exclusively about filing.

Intuit very little to do with making taxes complicated. There are plenty of more powerful interests responsible for that.

Intuit is actively involved in making the process as convoluted as possible.

Right, and they are only successful because a certain government allows them to be disproportionately influential... So my comment is still very much valid.

Shame is not zero-sum; surely there's enough for all parties here.

Why can't we shame both? :)

Really? This is a greedy policy, not an engineering decision. How many engineers have managers they disagree with? I'm sure you've always quit every company in such a situation?

No-one is saying engineers chose the company policy, they're saying that engineers are complicit by working on it. Someone had to but that no-index instruction on the page, and they knew what they were doing.

We're lucky (at least at this moment in time) that engineers are in huge demand. If you're an engineer at an ethically compromised company you could change jobs within a few months, tops. If you haven't then, yes, it's going to affect my opinion of you.

That's ridiculous. Perhaps you can find in a few minutes, but I know plenty of people stuck in jobs they hate but can't find anything better. They are not quitting, and they can't move, because they have people that depend on them or other circumstances.

Intuit is headquartered in Mountain View. No-one needs to move from there in order to secure a job an engineering job. If people depend on you then you can look for another job while keeping your current one - it's something I've done multiple times.

And if you can't find a job in Mountain View then I certainly feel for you, but it may be time to take another look at your resume and work out what's going wrong.

One of my friend's parents works at a company where a large percentage of the engineers / etc. are corrupt (think Boeing with its FAA certifications done by fellow engineers, but with all the engineers agreeing to not look at each other's stuff)- and he decided to stay there and continue to work, despite the corruption- if the company goes down or gets attacked by the Feds, he has a lot of proof to show that he wasn't part of the problem. He's also sort of doing that classical destroy-the-company-from-the-inside thing.

(software) Engineers in todays economy are privileged with the ability to choose their jobs. I think people with power should help fix wrongs inflicted on other people and not silently comply for a share of the pie. I turned down a few jobs I found immoral even though the compensation was substantially higher than the alternatives. Not everyone have this privilege, but when you do, I believe there's a moral obligation to use it.

I turned down contract work from a well-known telecom. The pay was great, unfortunately for them, I have no interest in helping them destroy your privacy. Of course, if I were desperate and had no runway, that would likely change the calculus. UBI would be a godsend in this regard.

> I'm sure you've always quit every company in such a situation?

I have absolutely quit jobs because I had serious issues with the way my employer did business. I would again. It makes sleeping at night a lot easier.

Congratulations, very few people can say the same.

Maybe, maybe not. A not insignificant percentage of my colleagues can say the same.

My point is that everyone can, and does, decide this sort of thing for themselves. Very few people are actually, no matter how much they may think they are, trapped -- particularly at this point in time in our industry. At worst, it's a matter of how much disruption and discomfort they're willing to put up with to adhere to their principles.

When most are sitting in the long tail of wealth/income distributions, then maybe is the likelier answer.

TurboTax was free for me up until I tried to report $10 in interest paid on student loans, which is a small, barely necessary form.

TT doesn't include this very common form in their free bundle and wanted me to pay $40 to upgrade.

While H&R Block also gets criticized- I have to say that they include this form, and I was able to file completely free for both federal and state, without having to hunt for a link- just started on their normal site. They also allowed automatic import of W2s, easy import of TurboTax previous years, etc.

What happens if you just add $10 to your AGI and omit the interest payments?

My thinking is the IRS will send you a "corrected" return and a $0 bill for the difference. Since that's what they do if you fill out incorrect information anyway.

It's a deduction so don't report at all

As far as I know, reporting paid student loan interest is a "required" form according to the IRS.

I remember looking up information about it at the time to see if I could just not report it, and that did not seem to be recommended

Really odd, it's like failing to report donations. But i guess they filed it.

I wonder what the minimum-effort private organization would be which could comply with IRS rules to offer free filing of extensions, 1040ez, etc. I'd happily throw in $1k toward it (even though I'm not eligible, and thanks to Puerto Rico, don't need to file federal taxes, probably, after 2019).

Just offering a simple, responsible, and stress free process for these filings, ideally with zero advertising, or just a brief "fuck turbotax, this is why..." message, and good infosec/anti-fraud (to protect against the EIC-claim-scams against the poor) would be great. The downside is a lot of those people need immediate access to cash, so a shittier commercial option offering instant refunds for a high fee would probably still get a lot of victims.

A big company like Walmart could possibly offer this to users, too, for free, and offer instant-refund as store card or savings accounts.

I think CreditKarma is attempting to do this.

There's been other efforts in the past/currently.

Some examples:

Open Tax Solver: http://opentaxsolver.sourceforge.net/

1040 Spreadsheet: https://sites.google.com/site/excel1040/home/instructions

Planet Money had a great episode a while ago about how much more complicated tax returns in the US are than in any other country, and how TurboTax has been fighting to keep it that way: https://www.npr.org/sections/money/2017/03/22/521132960/epis...

Who wants to just start writing a free version and start putting them out of business? Filing taxes is not the Linux kernel, I mean how complicated is it really? It's still just a matter of following directions and doing basic math. Computers are great at that. No rocket science needed. I even thought of a name: Caesar (as in "render unto..."). Caesar.org is available.

At the end it generates a PDF for printing & mailing.

After the first x users we lobby for our own connection to the IRS system like those companies have.

It's not hard. It's all arithmetic.

Before people pounce on me for "trivializing it" – I've written, from scratch, Obamacare Insurance calculators that analyzed hundreds of policies with various coverages, coverage tiers, and you could type in things like "If i broke my leg on this policy, how much would it cost?" (all in real-time).

It was a lot of arithmetic but really not that bad (about 150-200 lines of mainly applying coefficients to standard formulas depending on your policy tier), but it was all addition, multiplication, and division. And it really wasn't that bad. Took about 2 weeks.

Update: Just to clarify, an analyst had already done all the legwork of collecting those coefficients and premiums and costs for me. But all I'm saying is that the actual formulas are never that crazy.

I've also written similar calculators for life insurance and travel insurance.

I really doubt the tax calculations are any different.

Ultimately you gotta remember that these laws are made by pretty average humans and have to be enforced by those same average humans. They're going to be vast, but any single rule won't be mathematically complex.

So I once worked for a company writing math calcs all day everyday for various things (real estate, insurance, algo trading, school district budgets, hazards). If you would be willing to talk more about this email in my profile. I’ve often thought about the tax sector and how to make it easier. I really like the idea of a “Robinhood” for taxes. So to speak.

I feel like this might open up liability, or at least substantial "badwill" if the software messes something up?

> Who wants to just start writing a free version and start putting them out of business?

CreditKarma is trying it seems

It’s a bit on the nose to see their robots.txt file state:

> Disallow: taxfreedom

The government has a copy of your W2’s and 1099’s so they know how much you make. It’s a shame that the government didn’t make 'ReadyReturn' [0] the new way of filing taxes where the government sends you a packet of all the tax information they have on you and you simply make corrections to it. Many countries have something similar and it’s a breeze to file taxes. Only in the US do people hate filing taxes.

Intuit lobbies hard to make taxes as difficult as possible. Their rational is that they want people to hate tax filing as much as possible so that they vote against taxes and taxes are lowered for big corporations like Intuit.

[0] https://en.m.wikipedia.org/wiki/ReadyReturn

Can't someone create a site, listed, with very good SEO practices and content that links directly to the Free edition?

Huh I didn't realize that ProPublica did blog posts (I'm used to seeing long articles from them, often with partners, like that great Katrina piece).

I used to be dismissive of newspapers re-reporting things that were not news. I probably would have been surprised to see an entire news article basically re-reporting a Twitter message and a reddit post. In retrospect though this attitude I used to have is unfair and mean. Who cares if the re-hashed reporting about the tax-filing industry's regulatory capture is brand new or just a reminder? Reminders are important.

As someone who lives outside of the US, can someone please explain how the US government has not implemented its own free tax filing system? In my home country this hasn't been a thing for over 10 years.

If you print out the forms and fill them out by hand, the only cost is the the envelope & stamp to mail them in.

What the US Federal Government/IRS doesn't have is a free way to e-file taxes online.

The IRS has Free File Fillable Forms to e-file taxes online directly for free.


Yes they do, you can fill out all the forms digitally online for free. Search "freefile fillable forms". They have already closed for the year. I've been doing it for a few years now. The nicest thing about it is it does most of the math for you and you get your refund really fast (usually 1 day for me).

Politics and lobbying have had its way, and there aren't enough elected officials that have backbone enough to stand up to them. I'm pretty sure they entice folks with the promise of hiring folks and "benefits" for the officials - in other places, this stuff might look like corruption.

It definitely isn't in the interest of the voters or the government, since I'm of the understanding that easy taxes means more compliance and thus, more income.

Short story: lobbying.

Slightly longer story: bribes (http://photos1.blogger.com/blogger/8076/693/400/price-sheet-...)

Basically, our representatives can choose their voters via redistricting (gerrymandering). Senators can't do that, but elections are advertising wars, and the one with the most money often wins, and therefore repays his/her donors.

I'm not saying people should give up on democracy, but it needs some help from human beings instead of TurboTax.

Has anyone attempted to create an open source project for filing federal taxes?

I understand e-filing would probably be out of the question but something that could generate a pdf that you could print out and mail to the government.

i called after paying 150$, i was a student for most of last years tax filing, they told me because i signed their user agreement im not eligible for a refund even though i qualified for free service

Google "turbotax free" which returns https://turbotax.intuit.com/personal-taxes/online/free-editi...

This is not recent either. I remember getting to this page from Google on tax day.

Google "turbotax" and it returns the free edition link nested under the first result.

That's the "Fremium" version. The FreeFile version is here: https://turbotax.intuit.com/taxfreedom/

The "Fremium" version exists to upsell you to death, the FreeFile version can't do that.

You've fallen for their trick.

Damn, one thing I definitely don't envy about US is the lobbying. This definitely shouldn't have been left to a private company!

Indian govt websites aren't great and most look dated, and still income tax site run by govt is just about fine. No reason that the IRS/US gov should have locked themselves out of doing this.

If taxes were centralized, is it possible that one’s average tax bill delta would be higher than the average deal value of tax software products?

The point being, one could argue that the private sector has more incentive to reduce your tax bill in order to take a cut of the savings.

I wonder what Bill Campbell would have done if he were still alive? https://en.wikipedia.org/wiki/William_Campbell_(business_exe...

As I said on an earlier thread, I was able to file freely on turbo tax. It didn’t require any special effort or searching. I’m not sure I believe this claim.

I was being bombarded by ads for free TurboTax all over the place and... it was free, so great?

Much pixels and ink have been spent on this topic.

I am much more interested in first-party services for tax filing in the 50 states.

I wish there was a place programmers could go to say "hey we're being asked to do this immoral shit"

Isn't that what journalists and our congresspeople are?

Hopefully we get a Robin Hood version of tax filing software soon. :)

I imagine there's quite a lot of juicy information hiding behind noindex tags across the web. Is there a search engine that ignores these tags?

Wouldn't this need to be listed on the disallow on the robots.txt if they didnt want them to index the page?

The article has sections detailing how blocking works and literally provides pictures of highlighted sections of the websites source code covering this question.

No. That's one approach, but the page has a meta tag that has the same effect:

<meta name="robots" content="noindex,nofollow,noodp" />

Saw that on every page they have, not scrutinised the sanity of their code, but looks like it is part of their site template.

Also the site code - egads, 200+_ blank lines as a header, then clearly some extra padding blank lines here and there.

It is not part of their site template.

The Turbotax home page has "yes, do index" meta tags. So does their deceptive "free edition" page at https://turbotax.intuit.com/personal-taxes/online/free-editi...:

    <meta name="robots" content="index,follow,noodp" />
You've been tricked. Imagine how easily people who can't read source code get sucked into the wrong version.

Yes, I see the issue more clearly now. So many aspects about American TAX I never understood, the one were citizens who are living in another country and paying tax there also have to pay American income TAX always seemed brutal.

Most people in the UK are PAYE and the employer does tax fillings and as such the need for a individual to file any form of tax return is lower than the American system that from my understanding - mandates it and the onus for any tax information is placed solely upon the individual. Which I would of thought opens up a larger can of worms for fraud potential from the payer and payee as well as opening up less skilled people into realms they will make mistakes to their own detrement.

Yet if you're a corporation - tax seems to offer more freedom in expression compared to individuals. Which is the norm in many a country.

Sounds like the correct decision to me.

Govt: "We need some money from you to buy things."

Me: "How much?"

Govt: "You figure it out."

Me: "Oh, I get to pay whatever I want?"

Govt: "LOL, no, we have a figure that we want you to pay."

Me: "What happens if I guess that number wrong?"

Govt: "You get to go to prison."

You only go to prison if you willfully and purposely try to defraud the government.

It’s more of a, “Pay what you believe you owe based on your best guess and the laws as you best understand them, and if we disagree we may ask you to pay more.”

> if we disagree we may ask you to pay more

The opposite can happen, too. The last time they disagreed with me on how much tax I should have paid, they mailed me a check for the difference.

Same thing happened to my sister! She filled out the tax form, thought she owed, mailed in a check, and then received a check back from the IRS saying they actually owe her and told her where her mistake was.

Surely this raises a question: why don't they just tell you what you owe (and you can dispute it if you wish)?

Did they give you 5% interest on the amount you overpaid?

Because that's what they take from you if you underpay (by accident or not).

Living in the US is like: "oh you were born and live in the US? We're forcing you to give us a huge chunk of your earnings for your entire working life, make it close to impossible to determine the exact amounts and then fine you 5% interest if you happen to underpay, but we'll never give you interest if you overpay.".

Edit: Well, as mentioned the tax system is super complex here and I obviously don't know the rules for every case. It seems in SOME cases you do get interest when the IRS owes you money but personally I've never seen this, where as I've always had to pay x% interest if I ever owed anything.

Yes, the IRS will pay you interest under certain circumstances. Two examples are when they are late processing a refund or when a prior return is amended. I got a 1099-INT from the IRS in 2018. The interest rate is not 5%, however. Also, 5% is not currently the risk free rate of return.

Also, it sounds like you're referring to the penalty for underpayment, which I believe is currently 3.6% of the total underpayment for the year [0]. This only kicks in under certain circumstances.

[0]: https://www.irs.gov/pub/irs-pdf/f2210.pdf

What circumstances will they pay you interest? That has never happened to me.

Because this year I got hit by some underpayment penalties (with interest added on top) but at the same time I also got a refund which had no interest applied to it.

That is being self employed and paying estimated taxes every quarter.

Once I was getting a background check in which I had to certify all my debts to the government were paid.

I realized that several years back, I had worked at a temp job for a very brief time and I probably never got a W-2 and therefore never paid taxes on it. Thus, I called up the IRS, got the W-2 information which they had, and duly filed an amended return with a check for something like $20.

However, in a rather short amount of time, I got a letter from the IRS stating that they could not accept a payment for a return more than a couple years old and here was a check for the amount, plus interest.

So I can tell you they not only pay interest on your money, but they pay it on money they are returning even though you actually owed it.

The one time when this happened to me (they thought I was ineligible for a refundable tax credit; I mailed them both a check for the amount they thought I owed and proof that I was indeed eligible for the tax credit) the IRS did actually compute and add interest to the refund check!

Sure, the gov't cashed the check and held on to the money for like two months, but the interest at the end was a pleasant surprise.


It definitely is an ask. If you can’t pay it you can often negotiate an amount you can pay. And they even let you pay over time.

My favorite "bank" to "borrow money" from is the IRS/Treasury. Low interest, incredibly favorable re-payment plans, and never have to talk to a single person!

> willfully and purposely try to defraud the government.

whats the standard for willfully vs a mistake?

“File a false amended return, including a false tax refund claim of over $4 million for the year 1996, and a false amended return, including a false tax refund claim of over US$7.3 million for the year 1997.”

That’s from the Wikipedia page about Wesley Snipes. That’s what it takes to get the IRS to really go after you. Not only do you have to do it intentionally, but when you get caught you need to hold the line and say that you refuse to pay.

If you make a “mistake” and claim more deductions than is reasonable or just outright fail it file once or twice nothing really happens. They just try to correct the “mistake.” They try to settle or put you on a payment plan or maybe try to garnish your wages if you don’t respond.

When the IRS goes after tax fraud they are looking for someone trying to claim a multimillion dollar 2nd home in the Hamptons as a business expense, not someone who says they bought more office supplies than they really did. Or when someone with no kids tries to get multiple child tax credits.

When you get audited (by the IRS or anyone, really), they will ask you for a bunch of documents and then come up with their own calculation based on what they believe you owe. You can pay it and be done with it or dispute it. If you dispute it, then it may become contentious. Only then does it even really become an issue.

At the end of the day the “standard” is whatever a judge decides is reasonable, should it even rise to that level. But it almost never makes it that far because someone settles. Generally speaking, the only people who go to prison over tax fraud are those who CAN pay but refuse to.

My mother worked for the IRS (ducks thrown shoes). And then worked as a personal and small business tax accountant.

From her experience from working both sides. Criminal prosecution happens when people repeatedly challenge the IRS's authority with intent to defraud[1]. Like if they catch you actively[2] illegally hiding income, they fine you. And then find you're right back at it. Otherwise penalties and interest are simply mechanical and based on the amount not squared up for the fiscal year.

[1] You can bitch about the IRS all you want and they don't care as long as your taxes are in order.

[2] Meaning you are doing things to hide assets and income that proves intent to defraud the government. Merely not reporting or failing to record income tends not to count.

> At the end of the day the “standard” is whatever a judge decides is reasonable.

Because fraud is criminal, in practice the standard is whatever a jury would find willful beyond a reasonable doubt (or, perhaps more to the point, whatever the US Attorney can convince you and your attorney that a jury would be unacceptably likely to see that way.)

If you guess that number wrong in good faith, you get a polite letter from the IRS with the correct number. Let's not be dramatic.

did you really just paste a viral tweet here without attribution? :/

Help me out with the attribution please, I couldn't find it. (clarification: It came by as an image maybe a month ago on probably my facebook feed, searched but couldn't find the specifics, so wrote up my recollection because it brought up a good point related to HR Block and Intuit lobbying against free options)

It doesn't add anything to the discussion either. Might be against HN's rules.

Edit: not in line with the guidelines at least

First paragraph

> Be kind. Don't be snarky. Comments should get more thoughtful and substantive,

> Eschew flamebait.


I'd flag, but I don't see the option.

I honestly don't see it. I wouldn't call it unkind or snarky, I wouldn't call it flamebait. It's funny, it brings to light a, I would say significant, problem with the system we have. One of those "It's funny but it makes you think" situations. And it's sparked quite a bit of thoughtful comment.

Help me understand.

Oh yeah I misunderstood the definition of flamebait. It did create discussion (mostly about how you were inaccurate/wrong), but it itself wasnt very thoughtful. You used rhetoric/mocked to stir up people's feelings which puts down opposing views and makes them seem like nonsense even if they are logical arguments, just like reddit. I don't find it HN-worthy

Flagging requires karma > 30. Then you can click on a comment's timestamp to go to its page, where you'll find a 'flag' link.

Ty, didn't know about the karma

My favorite radio show quoted you.


4/19/2019 6am 13 minutes in, fyi

Ok folks, I get it. :-) This was a caricature of the process, and as such there are some inaccuracies. But the core of it that "makes you think", has some ounce of truth to it.

I'll agree, my interactions with the IRS have gone extremely smoothly when there have been problems.

> But the core of it that "makes you think"

Unfortunately the same can be said of all sort sorts of fake news stuff: "OK, so it's false, but the idea is important or it happened somewhere else..."

True, and there are plenty of ways to make people think that aren't founded on inaccuracy and rhetoric

dictatorship of capital

And this is news worthy, how?

The US government has promised TurboTax that the IRS will not create a free e-filing service. In exchange, TurboTax will offer its software for free to some low-income taxpayers.

The US legislature is considering extending this deal.

In light of that, various organizations are exploring how well the current deal is working. In sum: not very well, because TurboTax uses a variety of dark patterns to make it hard for people who are eligible for free services to discover it.

Congress is debating a bill that would bar the IRS from creating an official free filing system, and instead, mandate that the IRS have private companies fill that role. The concern has been that private companies use dark patterns to upsell users into buying unnecessary paid features:


Bar it from creating free filing software. Free e-filing pf fillable forms already exists, and would continue to exist.

Not that this makes such a measure palatable.

Large companies have been in the spotlight in the last 12 months for placing corporate interests above the interests of users. The use of 'dark patterns' (subtle, intentional UX changes with the purpose of driving user behavior towards a desired outcome) has been discussed as well.

It is now tax season and many were not as informed on these issues last time they filed as they are now. Looking at the online free filing process under the aforementioned lens generates new observations, discussions, debates, headlines...

Imo it's not so much that this is something new that's happening, it's that people are now aware of and pissed off about it.

Because there was arecent legislative push for allowing the IRS to do people's taxes for them for the majority of people, since the IRS already has the info to do so. The Tax industry pushes back against that, strongly, and one of the ways they do so is to note how the provide a service to do the taxes for free for people under a certain level of income (I believe as mandated by earlier legislation?). That they purposefully make it hard for people that qualify to find the free service has some bearing on the situation.

Why do low income people need any software to file taxes in the first place? If you just make a wage taxes are trivial.

Because companies like TurboTax work to ensure it remains as complicated as possible, and seems even more complicated than it actually is.

How do they even get into that business? They see the tax filling process and think "hey, it's too easy, let make it harder and sell a product to make it easier" (I'm clearly not a business person).

Mostly by lobbying politicians for extra exemptions that make taxes more complicated, but also by directly lobbying against bills that would simplify things.

It is true that lower income folks tend to have simpler taxes and really don't need software. The taxes are easy on paper.

But e-file still wins. Most poor folks could really use the money they get back from taxes and it is definitely quicker. E-file also saves folks from doing things like making copies, buying stamps, and mailing. On top of it all, there is a fair amount less chance of mistakes. Not to mention that there is a sizable number of folks that cannot figure out the legalese the IRS uses for slightly complicated taxes and the IRS helplines are generally of little help.

Poor people don’t pay any taxes in the first place. So the point is moot.

I was once one of those "so poor I didn't owe any income taxes" people you are talking about. Know how I didn't pay income tax? I filed my tax return at the end of the year and got a refund for 100% of the taxes taken out of my check.

People who receive any sort of taxable income file taxes, not just people who pay taxes on that income.

Quick question, do you know the difference between paying taxes and filing taxes?

Also, do you understand how withholding works and how you pay taxes with every pay check not just every year? And that if you have too low of an annual income to actually owe any federal tax you need to file in order to get your withholding back?

Even if you file as exempt and have no withholding, you may need to file because of refundable credits (mainly EITC).

And even if, for some reason, you have no withholding, and aren't expecting a refund, you may still be required to file just because your income is above the threshold (which is about 12k I think).

I agree.

However, many people, both low and high income, know absolutely nothing about taxes and tax forms or how complicated or not complicated their tax situation may be or how much effort they'd spend on tax filing. People are taught the tax code is really complicated and they are really worried about screwing up. Furthermore, TurboTax has become so big that many new filers just kinda think "Do Taxes = TurboTax" without really considering that they can do it without tax software.

There are multiple state federal and some times city taxes I believe.

Withholding overtaxes. They're entitled to a refund.

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