Killing TurboTax | Hacker News Reader

Killing TurboTax

kunle.app

891 pointskunle662 comments

This is such an ongoing theme on HN that we could maybe use a bibiliography. If I missed any big ones let me know.

In reverse chronological order:

Show HN: ustaxes.org – open-source tax filing webapp - https://news.ycombinator.com/item?id=26138446 - Feb 2021 (219 comments)

TurboTax Tricked You into Paying to File Your Taxes (2019) - https://news.ycombinator.com/item?id=26102695 - Feb 2021 (306 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019) - https://news.ycombinator.com/item?id=26060414 - Feb 2021 (199 comments)

FTC Is Investigating Intuit over TurboTax Practices - https://news.ycombinator.com/item?id=24409093 - Sept 2020 (194 comments)

IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax - https://news.ycombinator.com/item?id=21923220 - Dec 2019 (448 comments)

IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program - https://news.ycombinator.com/item?id=21393758 - Oct 2019 (188 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free - https://news.ycombinator.com/item?id=21281411 - Oct 2019 (447 comments)

TurboTax to charge more lower-income customers - https://news.ycombinator.com/item?id=20461169 - July 2019 (81 comments)

Congress Scraps Provision to Restrict IRS from Competing with TurboTax - https://news.ycombinator.com/item?id=20119916 - June 2019 (18 comments)

TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes - https://news.ycombinator.com/item?id=19994118 - May 2019 (42 comments)

Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers - https://news.ycombinator.com/item?id=19870242 - May 2019 (44 comments)

TurboTax and H&R Block Saw Free Tax Filing as a Threat - https://news.ycombinator.com/item?id=19810981 - May 2019 (143 comments)

TurboTax Hides Its Free File Page from Search Engines - https://news.ycombinator.com/item?id=19758126 - April 2019 (262 comments)

TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes - https://news.ycombinator.com/item?id=19718284 - April 2019 (274 comments)

Congress Is About to Ban the US Government from Offering Free Online Tax Filing - https://news.ycombinator.com/item?id=19613725 - April 2019 (696 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=19392673 - March 2019 (253 comments)

H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017) - https://news.ycombinator.com/item?id=18956883 - Jan 2019 (190 comments)

Would You Let the I.R.S. Prepare Your Taxes? (2015) - https://news.ycombinator.com/item?id=17751383 - Aug 2018 (424 comments)

Why I'm boycotting TurboTax this year - https://news.ycombinator.com/item?id=16844458 - April 2018 (23 comments)

H&R Block and Intuit Lobbying Against Simpler Tax Filing (2017) - https://news.ycombinator.com/item?id=16841449 - April 2018 (232 comments)

H&R Block and Intuit Are Lobbying Against Making Tax Filling Free and Easy - https://news.ycombinator.com/item?id=13922482 - March 2017 (234 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=13853150 - March 2017 (439 comments)

TurboTax Takes Aim at Smaller Rival in Fight for Filers - https://news.ycombinator.com/item?id=11150694 - Feb 2016 (87 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9381437 - April 2015 (150 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9380232 - April 2015 (124 comments)

Filing taxes: It shouldn't be so hard - https://news.ycombinator.com/item?id=5488084 - April 2013 (56 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing - https://news.ycombinator.com/item?id=5443203 - March 2013 (330 comments)

As always, dang, thank you again for your wonderful moderation.

Dare I add one other important story?

2 Former Employees Allege Intuit Made Millions Knowingly Processing Fake Refunds (Feb. 2015) https://news.ycombinator.com/item?id=9097974

This is fantastic. Thank you dang.

Now this is a wonderful job.

Thanks!

Excited for this to get turned into an interstitial when posting a new story "are you sure we need to discuss this again?"

"Killing TurboTax" is essentially a meme until we meaningfully simplify the tax code.

There is no software development team on earth who could catch up with the full capabilities of TurboTax without some sort of fundamental shift in the business. I really hate to say this as someone who makes a living out of it, but dealing with the current amount of complexity in the tax code with a piece of software that a non-expert could use is virtually impossible.

For the happy path (i.e. single individual, no dependents, no investments, no retirement, rents home), you could certainly build an application that handles these scenarios. The moment you factor in individuals who are bringing stock sales, multiple investment properties, ownerships/K1s and other complex scenarios to bear, its a different hellscape altogether.

Also don't forget that most states have their own independent tax codes as well, which further complicate matters. There's difficulty multipliers all over this problem domain, and you can be certain that the lobbyists employed by Intuit, et. al. are encouraging this.

> There is no software development team on earth who could catch up with the full capabilities of TurboTax

This is obviously false. The IRS software handles everything TurboTax does and more. As does the software that professional accountants use, such as ATX

Also: TurboTax's many retail competitors like HR Block.

>Catch up

It helps when you are the incumbent and you get to build the system in lockstep from day 1.

Agreed. I suspect an open-source competitor could be much better than all of these if organized well.

The IRS themselves need to provide this "auto tax" service.

> The IRS themselves need to provide this "auto tax" service.

Interestingly, they now can: under the Free File program, tax prep companies would offer free filing (for taxpayers below 72k AGI) and the IRS would not compete with their service.

After a ProPublica investigation in their dark pattern shenanigans (leading to about 3.5% of taxpayers to use the program when 70% are eligible) confirmed by the HSGA Senate Committee and NYS DFS, the IRS both updated its rule to preclude e.g. hiding Free File programs for search engine, and removed the rule which prevented them from competing.

Sadly the IRS has been hamstrung time and again by the GOP, both financially and politically. They can't even do their core jobs of collecting tax and auditing the taxpayers they need to, so it's unlikely they'll have the clout and funds to set up a free filing program any time soon, let alone one properly integrated with their likely antiquated and in dire need of updates computer systems.

We have this in South Africa. It was always easy to do your taxes before, but since last year they do what they call an "Auto assessment". The South African Revenue Service collects all the documents they need (payslips, medical aid, pension etc.) from the respective organizations, fills out the tax form for you, and lets you know it's ready.

I logged in to check that they did it correctly, which they did, and approved it. Literally took ten minutes. Nine of which were just reviewing all the fields on the form.

Obviously this does not work for people who have very complex/unusual tax situations, but for your average person it's great.

The tax prep industry lobbied Congress to prevent the IRS from auto-tax filing. The compromise was "free filing" for those with median incomes and below. For a majority, W2s, 1099s and the previous years return can provide an auto-filing framework. The IRS would send your their draft and you agree or modify. Other countries do this.

Ideally there would be a "tax dashboard" on the IRS site where you could log in and see your (YTD): - Income reported - Taxes paid - Tax credits and deductions - Expected balance (+/-)

Then at the end of the year, you'd log in and click one button to verify the numbers and either pay or get a check.

My employer didn’t send me a W2 this year which caused me to seek another method to access this information. I created an account on irs.gov and was surprised to find a single PDF for each tax year containing W2’s, 1099Ints, 1099Divs that I assume were given to the IRS on my employers/bankers behalf.

Now it would be great for a tax program to ingest this PDF and auto-populate your tax return. Unfortunately no PDF for 2020 exists yet and it says it might not be available until October? I don’t know if generating this PDF is a slow process or if this information is intentionally withheld until after the tax filing date to make sure you are “honest” on your taxes.

I grew up in France, our bureaucracy is pretty intense and old school. But they send you a nice little note with your W2 and how much you own them. If they missed anything you can amend their draft. Usually it take 15min to complete the whole yearly process. Even with some midly complicated situation like renting and being landlord, living between two countries, cryptos.

As noted in other comments here, an "auto tax" service only really works on the happy path. There are parts of the tax code which are highly subjective in more complex situations and require explicit elections on part of the filing party. These elections can have consequences far beyond the immediate tax filing transaction.

In one sense I totally agree, but in the other sense, it seems like it could be terribly invasive privacy wise.

Or just make their implementation of the tax code public?

Most US federal and state taxes can be computed by a rules engine. The big annual challenges are: updating the interviews, QA-ing the rules/engine, fed/state rule-making delays/defects, and ensuring that required printable forms are pixel-perfect replicas of their government-published sources.

For tax year 2017 (a pretty typical year), there were over 5000 Federal/state forms/interview scripts to be updated. This requires a seasonal army of tax accountant/developers to update the app "content." It's not uncommon for providers to be updating forms/interviews well into March (when filing opens in January).

Source: worked for a Turbotax competitor

I agree, a vastly simplified tax code is needed.

Here's my dream for a simpler tax code: The only tax is a Sales tax/VAT/GST.

Pros:

- Individuals never have to think about tax. It would completely eliminate tax returns. That alone is worth it's weight in gold since tax returns are such a time and money burden.

- It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spending money in the place where you operate.

- To add to that, if every country implemented this system we would be able to move freely between countries, spending as much time as we desired, without having to worry about tax implications. Obviously that's a much much longer term vision.

Cons:

- Won't this disproportionately tax the poor?

    - Firstly, the existing tax code already does. Poor people don't have the time to understand the tax code enough to get everything they can out of their tax return. The also don't have the money to hire an accountant to do it for them. They also don't have the tax avoidance opportunities available to them that come with the scale of being a wealthy individual.

    - Secondly, many countries already discount or eliminate the ST/VAT/GST on essential items. You could even have a higher tax on luxury goods. You could even have a negative tax (subsidy) on essential items if you desired. The point is it changes the framing of tax discussions to "where does this good/service fall in the scale of essential item to luxury item" which is much much simpler for people to understand.

- Won't prices have to rise for the same tax revenue to be collected? - Yes, but now you have all this leftover money that used to just go to income taxes which you can use. Plus prices might not rise as much as you think now that the tax loopholes used by megacorps are closed.

Look, I know it's pretty radical, but I think this is the only sensible taxation in the future.

> - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spending money in the place where you operate.

Yeah, it would "fix" this situation by just having them pay _less_ tax without needing a loophole. The percentage of income/wealth that someone spends decreases as wealth increases, so in other words the poor pay proportionally more under your tax scheme.

I think this is fundamentally a regressive idea. Currently the very poor pay zero (or effectively zero) income taxes. No matter how you structure the sales tax, you cannot go below zero. (I think negative sales tax is not actually realistic, nor particularly progressive.)

A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest.

Here in NZ we have a GST plus income tax - there are 3 tax steps, there are NO exemptions. Most people don't need to file a tax return, if you have only 1 job your employer will pay exactly the correct PAYE. If you have multiple jobs (or if you want to anyway) you can file online, it's 2-3 pages. If you don't do anything the IRD will run your taxes and if necessary send you a bill, or a refund (with interest).

I run a small business, I do my monthly PAYE in a simple spreads sheet - one line, type in the gross income out comes the numbers to include in the online filing web page including PAYE, and 401K equivalent. Doing the same in California was a nightmare.

We have no need for TurboTax or it's equivalent

> Here's my dream [...] The only tax is a Sales tax/VAT/GST.

Ok, I'll share mine: the only tax is on pollution and/or scare resource usage.

It's weird that we tax anything that's considered "good" in my opinion. Taxing housing, income from labour, consumption -- who came up with these shit ideas? Tax only, ONLY, what is considered bad (or should be reduced to a minimum), mainly: pollution. And the market will organize itself accordingly; optimize for all of us to survive a little longer on this planet (instead of exploiting it ASAP).

You can eliminate tax returns for most people by getting their employer to do it for them, which is effectively how the UK PAYE system works. Only those paid more than 100k, the self employed or others who want to claim certain tax incentives have to file what's known as a self assessment.

A wealth tax. All assets and cash need to be properly valued and then that value taxed. I agree with the sibling comment and also with past discussions where a wealth tax is the only non-regressive (not-keep the poor down) tax code.

> Won't this disproportionately tax the poor? - Firstly, the existing tax code already does.

I used to think this because it's often said, but learned it's not true. This sums it up:

The top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent.

The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent).

The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent).

https://taxfoundation.org/summary-of-the-latest-federal-inco...

Income tax itself isn't the complicated part of taxes. I encourage everyone to do their own taxes by hand sometime. There are like 4 boxes for wage income and income tax, and 100s of boxes for everything else. And besides the boxes you do fill out, there is all the reading and calculating required to figure out you don't have to fill in even more boxes (e.g. in order to know if you have to fill in the AMT form, you potentially have to do all the AMT calculations).

I think the biggest single thing that would simplify the tax code is removing the separate capital gains tax and just counting it all as income. There is significant complexity in the tax return to calculate everything independently and to show that your capital gains aren't really income. You could eliminate Schedule D, Form 8949 (which you have to up to 4 times), and the Capital Gains/Schedule D worksheets to figure income.

HSAs are also super painful. E.g. CA doesn't respect the tax-exempt status of HSAs, so you have to add the HSA back into your income so they can tax it. There are also a lot of bookkeeping requirements for relatively low amounts of money. In practice, they aren't very useful since the fees are high, the returns are low, and their function is redundant with insurance (i.e. paying premiums now to cover large future expenses).

In general, there are a ton of random little exemptions and extra taxes that you might qualify for and it just takes time to figure out if they apply to you. E.g. Form 8959 (Additional Medicare Tax) is a 0.9% tax for income over a certain amount. They should have just adjusted the income tax graduations in an equivalent way. Form 8960 (Net Investment Income Tax) has a similar problem. CA gives a $60 renter's credit if you make under certain amounts, which is just too insignificant to matter (e.g. 0.3% of $1500/month annualized).

It also creates a problem where you have countries who are close together people crossing the border to shop where taxes are cheaper and then the country where they live not getting those tax dollars (example Canada USA)

So, this is basically a tax on consumption.

Not a bad idea per se, but regressive, as many pointed out. However, in conjunction with a UBI it might make sense, and be progressive.

another con is: It's very hard to figure out how high your personal tax rate is if you don't track all your spending. I guess it's less of a problem for you guys over the pond, but at least in countries like Japan and Germany where at least 60-80% of all payments are done with cash it's near impossible to know unless you track your spending by hand.

I agree with you that VAT would be cool to have as the sole tax, though.

The reason that Taxes are complicated, is that the government wants them to be complicated. You can do without taxes (the government prints money, which is a tax on economic activity); or at a maximum print money + tax on big wealth accumulation which shouldn't affect the average guy.

The tax code is being used as a tool to funnel money through industries and as kickbacks to bureaucrats. A non-communist government can't force the population to do something (invest in this, build this, do that), but they can encourage/discourage it through taxes.

The tax code is not getting simpler any sooner.

Please enjoy your imminent crucifixion at the hands of the wokesters. It's what they do to people who use logic like that.

Do we really use that much time and money on tax prep? Sure, it seems like it during this time of year, but for the other 10 months I dont think about it.

And just forcing the bureaucracy into the businesses collecting a sales tax doesn’t reduce the burden, it just puts it out of sight for consumers.

Agreed. This is primarily not a "software" problem. Unless we simplify our tax codes in the US, tools like turbotax will stay. In fact, to be honest, turbotax was great when I used it last in 2009ish (I know they got acquired by Intuit and have gone downhill due to Intuit ) but the point is that it is overall an excellent software that really makes it easy to calculate and file things based on current tax codes. I would love to not have that dependency but that's not possible only when the tax codes are simplified.

> This is primarily not a "software" problem.

This is true.

> Unless we simplify our tax codes in the US, tools like turbotax will stay.

The two are linked because a lot for he lobbying comes from the same place, so its unlikely that one would get changed without the other, but there's less essential link other than shared lobbying interest than you seem to think: even with the complexity of the system quite a lot of the information is already in the IRS’s hands.

It's still excellent. I just did my taxes in FreeTaxUSA this year for the first time and it's not nearly as good as TT last year. FTU is like manually filling in the IRS PDF's except as webforms, whereas TT imports PDF's and parses everything correctly, leaving you to do a quick scan. FTU is free because it's just a light GUI layer over the 1040 and various Schedule forms.

Simplifying the tax code will require removing special exemptions for certain interest groups. This is often rephrased as "raising the taxes on [group]" which gets a lot of pushback. For example, raising the taxes on teachers, native americans, certain small businesses, public servants, antarctica scientists, students at for-profits, etc. It's hard to fight against that message.

TurboTax was sold to Intuit in 1993. Not sure why do you think it would get worse under Intuit, considering you liked it in 2009.

The reason the tax code is so complicated is BECAUSE OF TurboTax. They lobby heavily to keep things complex and have brought down potential competitors through legal means.

As such, "killing TurboTax" is the correct first step.

I know it's nice to have a corporate bogeyman to rail against but it's not that simple. For example, there have been all sorts of tax deductions over the years to incentivize things like home energy efficiency improvements, EVs, solar power, charitable contributions, etc. And the mortgage deduction was/is intended to promote home ownership. I could go on. Someone can disagree with some of the choices around tax rates and certain weirdly specific deductions. But most people wouldn't argue that, for example, encouraging people to donate to charities is a bad thing.

I didn’t see evidence in the linked article and the cited article therein that Intuit tried to prevent a simplification of the tax code. They just tried to stop the government from trying to build competitor software (partially paid for by Intuit and others in the tax accounting industry). Frankly, it sounds like a PITA to have IRS calculate your taxes with poorly written software, and then have to challenge it.

I think it’s unlikely that Intuit has the power to steer the complexity of the tax code. States like NY and CA, for example, oppose a standardization of tax law for “road warriors” because they make so much money from non-resident workers who step foot in their state.

US tax policy is about 70,000 pages (mostly regulations, bulletins, and case law). And that doesn’t include state and local taxes.

If you stop being an easy case, for example you want to claim FEIE within 5 years of spending > 30 days in the US, then the IRS tells you to get a lawyer to pay for a private letter ruling. This is because, where other countries don’t tax their citizens income worldwide, the US does and then gives a moderate exemption. AFAIK, US tax code complexity dwarfs that of any other country.

I find it hard to believe that it’s TurboTax’s fault, a day after reading about Sen. Warren’s plan for a wealth tax and a $100B to the IRS to help them calculate and enforce it...

I don't think that's true. The US has used tax laws as a way to effect policies since before Turbotax existed. I think the mortgage interest deduction goes back 100+ years

> The reason the tax code is so complicated is BECAUSE OF TurboTax.

People have been arguing about unnecessary complexity in the tax code since before computers, let alone before TurboTax, so it can't be that simple.

I've been using freetaxusa.com for years as an alternative, it only costs maybe 10-20$ to file state taxes if I remember correctly, and federal is free. It is much cheaper than Turbotax and the UI is essentially the same.

Interesting! I had no idea TurboTax was behind the latest electric vehicle rebate program!

Not Turbox, but Congress. They promise new credits and deductions every election cycle. Every couple decades there are weak attempts to weed out some of these such as for the Reagan and Trump tax reforms.

https://m.youtube.com/watch?v=TruCIPy79w8

> "Killing TurboTax" is essentially a meme until we meaningfully simplify the tax code. [...] There is no software development team on earth who could catch up with the full capabilities of TurboTax without some sort of fundamental shift in the business.

So let's just nationalize TurboTax.

That would a) never happen in the current US political climate and b) provide enough ammunition to those against such a mode as to be extremely counter-productive towards other social programs that could deal with more government support.

In other words, think back on all the talk of Democrat being "socialists" over the recent years and imagine the field day conservatives would have if any national figure mentioned this as an idea out loud, and how that might be used to shift the balance of power such that other meaningful programs that could deal with additional governmental support and regulation (healthcare) get set back.

To give an example of complexity that can hit "normal" people, something I just learned yesterday. If you are between 18 and 24, and a student, then if you had received unemployment income that income is considered "unearned income". Therefore it is subject to the highest marginal tax rate (tax bracket) that your parents fall into (which is 22% - 24% for quite a few people).

To me, that is kind of nuts, and not something that follows from normal logic (i.e., it isn't something that you will "get right" by just filling out a standard 1040 form).

I disagree that it's nonsensical for it to work this way since that unemployment benefit is being granted after your parents are claiming that they are supporting you - so essentially they're getting a big tax deduction on their income for your costs but then the unemployment benefit is being claimed to make sure for a lack of them covering costs - in a simple world one might make the other ineligible but that could result in some folks being put through unreasonable financial hardships due to poor planned or ill-intended returns from their parents so this allows that benefit to be given while also recognizing that something going on here is double dipping.

If you are financially independent then you should make sure your parents aren't claiming you as a dependent, if you aren't then you should be receiving those covering funds from your parents since that's the sort of dependency the dependent class is all about.

By “and a student” do you mean claimed as a dependent by someone else?

Filing taxes online in Australia is free, and I'm sure it's of comparable complexity.

This does not exist in the US the highest levels of government have no incentive to provide it.

From what I can tell, the system in the US is significantly more complicated for individuals (mortgage interest deductions, 43 different state income taxes, “alternative minimum tax,” gift tax, estate tax...)

> This does not exist in the US the highest levels of government have no incentive to provide it.

This is a valuable podcast episode to listen to to learn more about this: https://www.npr.org/sections/money/2019/04/03/709656642/epis...

To be fair: Filing your taxes in the US is free. No one is going to force you to pay someone to do them for you, which is what TurboTax and the like are doing, usually through software.

If you don't understand the tax forms, though, or can't figure out the codes, you are stuck paying someone. The IRS won't give definitive answers if you call them.

I think if there was a basic extensible system, that could grow into a full product. Start with 1040EZ in year 1, then grow with your customers' needs as they age and need more.

TT has a large moat but behind it must be a ton of technical debt.

Would an open source solution work here?

You’re imagining an army of tax accountants to continually keep a system up to date to put themselves out of business?

There's atleast one Show HN every year that does that and promises support for the more complicated cases "in a few months".

I assume a huge quantity of TurboTax users are in the simplest scenarios. As others have said, once there's any level of complexity, there's likely an accountant involved anyway.

I don't think this is much at all a technical problem. I suspect most people use TT because it's convenient--it files for you, they'll even pay themselves from your refund. And TT knows well this is a huge user base, as you'll see them hide away little features like education credits into the premium version.

I agree though that state taxes are part of the moat here, let alone municipal. In the few states I have experience though, state taxes are vastly simpler than federal. Still it'd be great to see some kind of centralized digital infrastructure that states could all normalize around instead of each building their janky web portals.

No rule changes needed. Apple is at the point where they are really pushing up against the limits of consumer spending. Spending $140 on TurboTax is a prime target. Thats $140 where a fraction can get funneled back to Apple purchases. It is now worth it for them to make sure iPhone users never reach a TurboTax checkout flow.

Apple is just getting started with finances built right into the iPhone. The credit card is already rolled out, and now comes a built-in bank account that can accept your payroll. This is just too valuable for Apple to pass up. The next step is push-button tax filing. Classic innovator dilemma where you start with basic returns. Think Uber driver.

Interesting take. If it really comes to pass, will Apple be preferable to Intuit?

Or for that matter, would Google or Robinhood enter the industry?

And the full capabilities of TurboTax still aren't that great. I never felt confident that I was interpreting every question properly.

As soon as my tax situation got even the slightest bit complex I started using an accountant. They use TurboTax, I'm pretty sure, but they also know all the questions and what they really mean and can answer my questions on what the tax impact of various situations I encounter might be. They also go to bat for me if I have an audit.

Not only do I consider that far more valuable than the $500/year it costs, but I'm also confident my tax savings more than cancel the expense.

Just my experience, but I recommend a tax accountant to all adults.

Most of the US is W2'd with a house, limited investments, with some dependents sprinkled in utilizing the standard deduction... it wouldn't be that hard. For everyone else there is a justification for tax professionals.

Is there some software solution that may make things easier. For example if rules are written in a language like prolog could you have the system ask you the relevant questions? Would the set of rules be easier to maintain?

Yep. As a Hong Konger, it boggles my mind that tax codes in other 1st-world countries are so complex.

In Hong Kong, you literally get about 3.5 pages of A4 to fill for your annual income tax returns, the vast majority of which you can leave blank unless you are one of the richer people and do rich people things.

And then we have taxes on very few other things, which you simply pay at the time of purchase: - Alcohol - Motor vehicles - Real estate - Stocks I don't think I'm missing anything important.

We have no other sales taxes otherwise. And look at us, we are a 1st-world economy, despite being such a small city.

Hong Kong's top bracket is 17%. Of course it's simple because the gov't doesn't collect much tax so doesn't need a bunch of exceptions and rules for tax relief.

The tax code is complex because the economic realities we want to assess taxes on are complex. A naive treatment would be both trivial to bypass and ruinous to unlucky innocent people.

Hmmm, how does the IRS check? Purely manually? Surely there are some alternatives out there. Worst case scenario, the government buys a turbo tax competitor

Not that I expect it to succeed, but I wonder what would happen if you tried throwing machine translation at the raw tax code.

What if we rewrote the tax code with code? There are many high level languages (especially functional ones) which could address this problem domain really well if we had the courage to start completely over.

Imagine a legal document that is written using terminology that is ultimately just a series of higher-order functions. A human could make sense of it with some training, and a computer could directly execute it with determinism.

I strongly disagree with this.

The tax code is relatively straightforward for a programmer. It’s a bunch of conditional statements and simple math. Even the cases you mention are straightforward compared to the usual ambiguity that comes with engineering a product.

TurboTax is awful software. One question at a time, their user flow is AWFUL. Truly abysmal design for even the simplest of tax situations.

The IRS’s free file fillable form site is similarly awful; their asynchronous, background xml validation of forms after they’ve been submitted to notify you that their system let you input something invalid is a laughable system design.

This market is ripe for disruption. I do feel that should come from the government itself, but that seems unlikely for political reasons.

You mean for free file forms you don't like getting an email with some incomprehensible language? Oh, don't worry they provide a tool. Just copy the _entire_ email they send you and paste in some tool.

Genuinely it is a horrible experience, but I suppose it is better filing by paper and waiting a few weeks for a small correction.

Sounds like they just buy up potential competition early... So let's get started writing /something/ and get an easy pay off when they buy us out!

Aren't there a number of tools that people use already other than TurboTax? This seems incorrect.

I started building my own open source US tax engine, but then found https://github.com/ustaxes/UsTaxes here on HN (https://news.ycombinator.com/item?id=26138446) and decided to throw my efforts with them instead. Check it out!

In that same thread someone mentioned OpenFisca [0], which is used to codify tax law. Have you considering utilising it instead of re-inventing the wheel?

[0] https://github.com/openfisca

These projects seems to come at tax policy from very different directions. US Taxes helps you fill out the specific form needed to file your taxes in the United States. OpenFisca helps you model a country's tax policy overall.

It would certainly be interesting to connect the two, but I suspect that you'd do that after finishing US Taxes. Specifically, you could take a completed return from US Taxes and transform it into an input for an OpenFisca model of the USA tax code.

As it stands, nobody has developed a USA model on OpenFisca. Perhaps that could be a next step, pursued in parallel with the US Taxes effort.

I was just thinking that an open-source tax engine is the way to go in the future. I would like to see it maintained by the USGOV.

> please don't use this software to file your taxes for the 2020 / 2021 tax season.

I wonder if there is a PR that Intuit filed to add this to the readme.

Seriously, I wonder how much money Intuit has spent to terrify people into using their software. Each year, I look around for alternatives so I can avoid giving them money, and each year I find some reason to grow fearful of an IRS audit and go with the company that has convinced me they are less risky than anything else. I wonder if that is truth, or if I've been programmed to think that.

Is it possible to FOIA the IRS tax-computation code itself?

If the government wanted to help people do taxes more easily, they would just simplify taxes. Lobbies (from TurbTax and competitors) are standing in the way.

And TurboTax's lobbying is why you will never see that.

The ProPublica report linked in the OP:

https://www.propublica.org/article/inside-turbotax-20-year-f...

Cool to see more open software in this space. Curious to know if there are any plans/efforts in leveraging the work done in http://opentaxsolver.sourceforge.net/ to handle more use cases. Maybe ustaxes can be a nice frontend to some of the tax logic in opentaxsolver?

Kill turbotax with fire and kill it again.

This has already been done successfully in Canada. A small team from Vancouver built a pay-what-you-want web-based tax-filing system from scratch. It's called SimpleTax and it's already a major competitor to the Canadian version of TurboTax. In fact, it was so successful that it was recently acquired by Canadian investment group WealthSimple.

Unfortunately, the "we promise not to sell your personal data" disappeared from the privacy policy during the acquisition, so we know why they remain donationware post-acquisition.

https://www.cbc.ca/radio/costofliving/the-canadian-tech-comp...

Ooh ToS/privacy policy diffing service alerts as a service ha

For people who haven't used it: SimpleTax just absolutely nails UI quality, it's so nice and smooth that every year I've used them I've been done in under 15 minutes (other than time spent double-checking because it can't have possible been that easy) and come away so grateful for their existence that I gladly throw money at them. One year the Canadian Revenue Agency even introduced a new API that lets SimpleTax pre-fill most of the information like employment income from the stuff the CRA has on file.

I've since moved to the US and I'm dreading doing my taxes using probably TurboTax for the first time this year. At least it probably won't be as bad as previous years when I had to file non-resident US taxes for internships, where you can't even use TurboTax and have to use Glacier or TaxAct, which were terrible compared to SimpleTax.

I can honestly say that SimpleTax has been life changing for me, and is a great example of just how important UX can be. My partner used to have literal panic attacks trying to file taxes, even with TurboTax/UFile/etc. Since we've started using SimpleTax, it's done in one sitting and is not even a source of stress anymore.

No wonder I've been seeing so much ads about WealthSimple tax. It's literally every other ad on TikTok for the past 2 months. That and every other WealthSimple app (trade, invest, etc).

Can't find the source, but the CRA will be bringing out their own free software too soon

This discussion feels incomplete without mentioning "return-free filing". A lot of countries you don't even need to send a return because the government already has all the info you need.

https://www.taxpolicycenter.org/briefing-book/what-other-cou...

The fact that this isn't in the conversation has always surprised me. Both Regan and Obama supported it. The Republicans did that whole "taxes on a postcard" skit, but we don't even need a postcard. We're talking about TurboTax, well how many of you also log in and all the information is already there? I don't see why we can't replace the 1040 with return free filing, or at least the 1040Ez

Grover Norquist has had Republicans sign "the Pledge" opposing tax increase since 1986. Reportedly, he also wants filing taxes to be painful so you hate the government and he opposes these measures.

In 2005, California had a pilot program called ReadyReturn where they mailed you prefilled forms. It was popular. TurboTax lobbied against it and it died.

Yeah as a Brit the whole discussion above about "nobody could replace TT because it's so complex" missed the point by a country mile.

I do mortage deductions etc. and I filed my taxes some years back by responding to a text message. "If this looks right and you don't want to change anything, just reply YES and you are done for this year", basically.

In recent years it's just a smartphone app or website. Typically you cclick "next" 3 times to review and then submit.

It's around as simple as your average online retail experience.

Or the IRS could file our taxes for us for free.

Turbotax et al. lobby heavily to prevent this. Given that much of the relevant information--W2s, 1099s, etc., are already reported, you'd think that this would be easier for a very large percentage of taxpayers. But it would effectively kill TurboTax's business.

Couldn't the legislators just... not do what the lobbyists want? Are they really all that corrupt?

And that would be a good thing

Does anyone have any idea what these lobbyists actually say? What excuse (however lame) that they actually give for blocking simplification etc?

Or IRS could let me know what they expect my taxes to be, and I could *choose* to agree to IRS's calculation, or provide my own.

That's what they're system would be in essence, you'd get a piece of mail saying this is what you'd pay taking what we know and using the standard deduction. If you want you could calculate any itemized deductions and resumbit.

That's how it works here, in Norway.

That's actually exactly what happened when I failed to file for over a year one time. They sent me all the forms prefilled and asked me to review them and just send them back if correct. Sadly, they weren't.

The IRS can simplify the process, sure. And if you are living alone, have no children, and don't care about taking advantage of any special credits or deductions, then a "file for me" button would be fine. (Though the process for those taxpayers is already in a good place--I filed my taxes for free in about 30 minutes this year.)

But if you, say, have children, the IRS will not be able to "file for you" in any meaningful sense. Whether you are allowed to claim dependents on tax returns is a complicated question that is highly fact-specific. Happily, the IRS does not have cameras in my house checking to see if my children are living with me. I have to report that information to the IRS myself.

Drive for Uber? Your taxes are also gonna be pretty complicated, and there's no way the IRS can do them for you. After all, they don't have any information on how many miles you drove for Uber and what other business expenses you might have had.

Right now, the system we have is pretty good. Most people qualify for free filing, and free-file tools get better every year. At worst, there is an issue of consumer education (psst, you might be able to find a better/cheaper tax filing option than Turbotax).

> Right now, the system we have is pretty good.

Not compared to other countries it isn't. Not by a long shot.

Video with transcript below:

https://www.pbs.org/newshour/show/dreading-taxes-countries-s...

Get the heck out of here with your bull pucky

Most countries have their version of the IRS "file for you" without any of those difficulties. Everyone reports tax information to the central authority which determines how much you owe. Even complex things like 1099-B, 1099-Div etc. Which is how the current system works anyways, it just eliminates the hassle.

There's almost no scenario where the IRS cannot do this stuff. Think about this fact: your W-2, 1099 investments and most other financial information is already reported to the IRS. They have it already. Absolutely bonkers that people accept anything less than just being sent a bill or check once a year.

> Right now, the system we have is pretty good.

Yeah, big disagree there. If you've ever done taxes in another country you will realize how idiotic taxes are in the US. Australia is literally, 10 minutes per year, and even complex things like investments, stocks...

If you think the IRS aren't able to work out how much tax you need to pay... how do you think they're catching people who don't pay enough tax? They must already know!

I came here to write something along these lines. For the simplest cases, filing is free and really easy now. Everyone who needs TurboTax now would need something roughly as complicated until our entire tax regime is overhauled.

Adding to the types of really common situations where you do have to provide context the IRS doesn't already have:

- side-hustle contracting (IRS doesn't know what expenditures are for the business)

- stock sales (your broker may not know your basis)

- home improvements eligible for tax deductions

- sold a home (IRS won't know your basis or selling price)

- did you move for a job? IRS won't know whether you are eligible for tax deductions.

- crypto gains/losses

- inheritances (basis again)

I'm curious whether other countries have simpler tax codes that permit simpler filing?

>Most people qualify for free filing

For that matter, everyone qualifies for free filing--although in practice it gets too complicated for most past some point. I know it sounds like something savages would do but it's actually possible to just fill out the forms by hand if your taxes are fairly simple.

I use an accountant who I've been using for years but if you just have a W-2, a 1099 or two, and just use the standard deduction, it'ls likely pretty simple to just fill out a 1040 form and a state tax form.

I don’t understand the argument. You go from stating that in some cases, the ziRS can’t prefill your taxes correctly - sure, we all agree here, that’s the same in every other country. And then you go on to say that’s why you need TurboTax. Huh? Why not just have the same input boxes as TurboTax, but on irs.gov? That’s what pretty much every other developed country has

This. You can't kill TurboTax with tech, it has to be done with policy. TurboTax is in this position because they lobbied their way to it. Any tech solution will just be further lobbied into oblivion.

This is the solution. We can already do this. A pilot program was run. The problem is that the anti tax wing of the Republican party and Turbotax are actively opposed.

Instead of developing software, we should be writing our representatives.

Democrats have the entire government now, President, senate and the house. Democrats had filibuster proof majority when Obama was president.

Why are you just blaming Republicans?

An Australian friend of mine showed me his tax receipt once and it made me yearn for this. It’s ridiculous what the US has created for its citizens, or rather not created.

The intent of certain lawmakers is to make sure that the filing and reporting of taxes is onerous as a lesson about the illegitimacy of government taxation.

I don't suppose those lawmakers are voting to reduce their pay to $0, eliminating their government-provided pensions, or reducing the need for taxes by giving up any of their other benefits, are they?

Otherwise, legitimate or not, that money is going to have to come from taxes somewhere.....

Also, what does onerous have to do with legitimacy? It's like there's two orthogonal axes and they're trying to make taxes painful to convince the populace to dislike taxes, whether the taxation process is legitimate or not.

I don't know where this idea came from (I've seen it on reddit a LOT), but it's the same here in Switzerland: you do it yourself because the tax department has no idea how much you made precisely, what you can deduce from it (expenses you had to do in order to acquire your income), etc. It just makes more sense to have everyone manage their own taxes.

The IRS already has most of your income information and much of your deduction information. They already use this to validate if your return makes sense.

In effect, the IRS already does most of a taxpayer's paperwork. Since they do this, it might be nice to provide it to taxpayers for review and correction, rather than making us all start from zero each time.

In the UK vast majority of people don't do their own taxes. Your employer pays the tax on your behalf directly from your salary and updates the tax office as to how much you make. In turn, the tax office tells your employer how much tax to pay from your salary, without any input required from yourself.

In fact most people I work with don't even know there is such a thing as a tax deadline every year or anything like that, because....why would they? if you are a normal full time employee there is absolutely no need to file your own taxes. HMRC has all the information it needs to tax you year on year.

>>what you can deduce from it (expenses you had to do in order to acquire your income)

Well, at least here in UK there's practically nothing you can deduct from your taxes if you are a "regular" full time worker, so that solves that issue.

The government automatically doing it doesn't preclude from letting taxpayers be able to amend it. The vast majority of people have simple tax returns, and all that information is already electronically flying around with unique identifiers (social security number).

It's trivial for government to be able to automatically produce a tax return that's basically almost all done for everyone.

From what I remember in Switzerland, the forms were prefilled, just like neighboring countries. Your salary was automatically takes from your employer, any declared children are carried over year to year etc. Then all you have to do is correct and add any complex stuff

They could, but IIRC Intuit and HR Block lobbied the government to make this an impossibility.

This is prevalent in Northern Europe

yes, because i want someone in the irs to evaluate all of my deductions and donations

This isn't how most file.

Also, the way it works is that you still have the option of doing it yourself. But by default, done for you.

That's like saying someone in Google is analyzing your web searches in order to show you ads.

The usual proposed method would be the IRS calculates what you owe based on the standard deduction because they don't know about most donations or possible deductions.

They'd just assume you want to take the standard deduction--which isn't a bad assumption for a lot of people these days.

My taxes are admittedly at least somewhat complex but, even if I did them myself, I'm not sure how much effort it would save if I had to do a bunch of additions and corrections. Pre-filling would mostly be useful if you could just check your W2, maybe a 1099, some things like dependents, sign it, and file it.

They're already doing that

TurboTax's offering is not just about literally filing my taxes. It's about managing risk that I'm not botching my filing in the form of missing something entirely, mis-filing, or leaving deductions on the table.

Even if submitting forms online is entirely free, I'm willing to pay SOMETHING to make sure SOMEONE ELSE is responsible for making sure it goes well. I pay accountants for this for this exact reason. I'm sure I could figure out what boxes to copy where, but I'm not paying an accountant or TurboTax for copying values.

edit: I did not mean this to sound like an apology for TurboTax being despicable for other reasons.

It's a racket. Government already knows how much you owe them. So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"?

The US tax system is another one of those things about the US that looks utterly baffling to an outside observer from Europe. How on earth did it get into this state? How is this 'free'?

> It's a racket.

Yea, possibly (I agree with you). It is as much a racket as lots of other things. Doesn't excuse it being a racket, but TurboTax is not an anomaly.

> Government already knows how much you owe them.

This is false. If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investments, you're giving the IRS more than you have to. If that doesn't bother you, that's fine too!

> So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"?

Cool, sounds great. However, you're over-simplifying things and ignoring the complicated parts. For a lot of people, a simple approach like the above would be totally adequate and I personally completely support a system like that.

Seems like a really easy first step would be for Democrats to pass a bill allocating money for the IRS to build a What You Owe API that banks and companies can access. Then every bank on the planet can implement a "Click to pay your taxes" button.

Attack the problem at the source.

> Government already knows how much you owe them.

I don’t get why people think this is true.

Take a really simple example of donating to a charity.

How would the government know you donated without you telling them?

How is the government going to know exactly where you put all your money?

Even CPAs aren't responsible for leaving you exposed to an audit, unless it was through gross incompetence, or if otherwise specified in a contract. TurboTax gives you some feeling that you have exhausted most of the straightforward avenues for reducing your tax liability, but offers no guarantees. Tax preparers are really only liable if they start telling their clients to do grossly illegal things on a regular basis, or if they do shady things to cheat them out of their refund. For example, receiving the refund in their own account and paying the client half.

I completely understand what you're saying.

Paying someone who is more of an expert than me is still better than me doing it myself.

"Hey I did this in good faith and this company messed up, can we work this out without me going to prison?" vs "I didn't know."

I get what you're saying, and I use it for the same reason, but as far as "SOMEONE ELSE is responsible" they do a really great job in the ToS making sure they legally really aren't responsible in any way. It's a great racket.

I understand (and agree that it's a racket), but even so, it was worth something to me even when I was filing 1040EZs.

This is an honest question: what responsibility does a TurboTax have? How would you find out that they messed up, and how would you react?

I don't know if I can answer that first question - it seems like if they position themselves as providing expert advice and competent filing, and then I pay for it, I should be guaranteed something. But the world does not really operate on SHOULDs.

If I used TurboTax, I would expect to find out they messed up by getting some notification from the IRS, or accidentally discovering later that I missed a deduction. If the IRS was reaching out, I'd engage a real accountant ASAP. If TurboTax missed a deduction, I'd vote with my wallet and use an accountant the following year :)

disclaimer: I use an accountant because my tax situation is complicated.

Something I never understood about us taxes - from reading discussions online, it seems like everyone needs to file taxes at the end of every year? Here it's only self employed, or people with rental or investment income. In a normal employer-employee relationship, the employer has to take care of it for you, they deduct taxes before sending the money to your account. This seems to be the way it works in most places, but not the us?

The USA has payroll deduction, but the tax code is complicated enough that that's only a rough estimate of what you actually owe. What you actually owe cannot be determined and deducted ahead of time, because a person's true tax obligation depends on information and events that may not be available until up to ~105 days after the end of the tax year.

So, every year, you have to do a bunch of paperwork (it took me over 4 hours this year) to calculate your actual tax obligation, and then either you send the government a check or they send you a check to settle the difference.

And/or you may be on the hook for paying estimated taxes over the course of the next tax year.

Correct. Companies like Intuit lobby the government to keep complex tax codes so they can provide services that make it easy.

It's not quite that simple. There's a lot of popular political support for things that make a simpler tax season impossible, too.

For example, the existence of tax-advantaged savings vehicles such as IRAs and HSAs mean that the taxable portion of your income isn't settled until the deadline for making contributions for that tax year. Which is April 15. But I imagine there would be a lot of popular political backlash if Congress were to abolish IRAs in the name of sticking it to Intuit.

There's also that whole mess of expenditures that you can deduct from your taxable income, which doesn't kick in until the total of your deductible expenses exceeds the standard deduction. And a lot of people were worried when the standard deduction got increased a few years ago. It made a lot of people's taxes nominally easier to calculate, but people were worried that it might remove an incentive for charitable donations, or reduce the largess that the government gives to homeowners relative to renters, or alter the impact of tax incentives for people who put solar panels on their roofs, or whatever.

Long story short, we love to blame Intuit, and it is true that Intuit generally wants a nasty complicated tax code, but it's also true that, in the aggregate, so does America.

While that may be true, the reality is a lot of the complexity comes from deductions to handle people's "special" situations and needs.

They don't lobby to make the tax code itself more complex, they just lobby to be the only providers of such services: https://www.propublica.org/article/inside-turbotax-20-year-f...

It's not like Turbo Tax is the only thing standing between you and not having to do your own taxes. The entire system top down would need to be redesigned and the withholdings concept done away with. That'd be such a sweeping piece of legislation it will most assuredly never happen.

The US's system of tax deductions makes it impossible for your employer to know how much to remove from your paycheck except in the simplest of scenarios. They may not know how many children you have or how much money your spouse makes if you file jointly or how much you pay in rent or whether you're a first-time home buyer or what your deductible medical expenses were for the year or whether you had education expenses and so on...

There is literally a form you fill out for your employer to tell them this information so they how to much withhold from your paycheck: https://www.irs.gov/pub/irs-pdf/fw4.pdf

Employers do withhold some income for federal and state taxes, and for social-security and some other odds and ends.

But the tax system is very complicated, with multiple tax brackets (income above a threshold is taxed at a higher rate), deductions, exemptions, exceptions, alternative-minimum, and more. There are deductions and exceptions for things like mortgage payments that go to interest (on only one residential property), donations to certified charities up to a limit, green energy incentives, travel to start a new job, who knows what.

So, we have to settle-up with lots of complicated forms each year, and I've tried alternatives to Turbo Tax, but didn't have enough confidence with the alternative's handling of all the complexity, they just were noticeably worse at handling all the complex details. Not that I like Turbo Tax or the overall situation, but for me it's either Turbo Tax or pay a more expensive accountant.

The employer tax withholding does not account for any other source of income you may have (sell stocks, rental income, make money on Twitch/Youtube/ebay/etc, withdrawal from tax free investment, interest, etc) so you may need to pay more taxes than they withheld and at the same time it doesn't account for all the possible deductions you may have that year so it may withhold more than you need to pay (usually that's the "desired" case).

So at the end of each year you need to go through all the income sources of that year, subtract all deductions and compute how much actual tax you own. And pay or receive the difference to/from IRS.

Even if you have an extremely simple income situation (only one wage, no other income), depending on the state you live in you may still qualify for deductions that the employer is not aware of so it can be in your advantage to do the taxes.

Employers do witholding the US. Filing at the end of the year is doing a calculation to determine if the withholding is correct and if you owe extra or are due a refund. The factors determining total liability aren't simple enough that paycheck withholding can be entirely accurate.

A swedish guy I go to school had to file taxes...while not generating any income or allowed to generate income. He almost got in trouble with whatever US dept handles immigrants cause his advisor in the foreign affairs office didn't tell him this.

Returns. It's about returns. And taxes that are not wage-tax already payed at source.

Technically you only need to file if you owe the government money. If you have money deducted from your paycheck, you will want to file in order to get a refund, but technically you don’t have to.

This is incorrect. You have to file a federal tax return if your income is above the standard deduction, and there are other rules [1]. Anyone can use this IRS page [2] to determine if they are required to file a tax return.

[1] https://www.investopedia.com/ask/answers/07/taxtipfederal.as...

[2] https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

This is not entirely true. You have to file if your income is above a certain amount for your age and filing status. If you owe or get a refund from the federal or state government is entirely dependent on your tax obligation and the amount withheld from your paychecks throughout the year.

yes its a colossal waste of time that could be spent on more productive things (or with family and friends)

Yes. And Intuit's lobbying has helped ensure that never changes.

https://www.propublica.org/article/inside-turbotax-20-year-f...

Most Americans are simply unaware that other countries have dramatically simplified this problem. It's amazing how many have magically assumed this was because this was some socialist concept and the immediately launch into "oh, but how much more in taxes are you paying? pfff."

Try freetaxusa.com if you're looking for a free alternative that has an equally friendly user interface!

I just tried it. It has a good interface, but a massive downside in that it doesn't have any automated importing/parsing of W-2's, 1099's, and other forms, unlike TurboTax. You have to type in every single number, leaving room for fat finger errors that TurboTax largely eliminates. This removes much of the advantage of doing your taxes online in the first place. TurboTax will smoothly import these, sometimes directly from your bank's website (you don't have to download and upload the PDF). If FreeTaxUSA built a robust tax form PDF parser it would be a real TurboTax competitor. Right now, it's just a cleaner interface to filling out the IRS PDF's on your own. It's good if you don't mind a more manual approach to your taxes.

You don't have to type; you can copy&paste. Still annoying though

I had a lovely experience with freetaxusa this year.

They're not entirely free, but they're still very cheap and transparent about their pricing. They don't do the login thing where you hook into your banks and pull in documents automatically, but... honestly those aren't that useful and I'm not sure I trust those on turbotax.

Another vote for FreeTaxUSA. They are totally free for federal returns but I happily pay the $6 for the ‘Deluxe’ service level to support its development.

Been using them for years now after getting tired of TurboTax’s $60-100 fear racket.

I don't mind paying for a service, but with a URL that includes the word "free" I was surprised to see at the top of the page "State Returns $14.99 $12.95 — 12 more days to save on state filing"

It's FreeTaxUSA, not FreeTaxYourState.

Or it's "Free as in freedom from Intuit."

I've been wanting to try it, but I can't sign up because they, for whatever strange reason, don't allow emails with foreign country tlds...

Only free for federal. Also doesn't seem to be open source so who knows if they're logging your social security number and other info.

Of course they are logging your info, same as Intuit and so many other companies. SSN isn't a secret; yours is almost certainly already leaked.

I just want to point out that this article is using a really bad definition of monopoly. There are about a dozen if not more ways to file taxes, and just because one is the most most popular and gets a bigger slice on the bell curve doesn't mean it has a monopoly.

It bugs me a little because I keep seeing the definition of monopoly becoming less and less meaningful.

I think the argument, if anything is the opposite: there are dozens of tax filing software, they all more or less do the same thing, and all the resources get wasted on marketing against each other. So I think I would prefer an actual monopoly! And if the government won't make it, why not make an open source one that can drive the for-profit ones out of business!

I'm not sure I understand how monopolies acquiring their competitors early on in order to be able to maintain their monopoly price works in practice. Wouldn't the eager gaze of startup founders looking to strike their first big score turn like the Eye of Sauron on any such industry? And all the monopoly profits that the monopolist stands to extract would in the medium run hit an equilibrium of zero when balanced against the extractions of the people it's forced to acquire?

How would an eager startup person get funded to build something that competes with TurboTax? How will you bring novel value to the industry at this point?

A monopolized industry is also intentionally difficult to enter. It’s not just about buying existing competitors it’s about also making it as hard as possible to enter.

So even when some startup manages to get funding and deploy a viable product, they’re immediately on the radar for acquisition for monopolists if they weren’t before going to production.

TurboTax has also lobbied to affect US law in their favor. They’re a scumbag organization who makes an excellent product.

It's an OK product. The interesting thing about TurboTax lobbying is that they oppose most attempts to simplify the law because the value of their product is for people who have tax situations that are too complex for an individual but not complex enough to make hiring a full-time tax accountant worthwhile.

I just don't understand why a guaranteed payday if you're even modestly successful doesn't draw competition like flies. I would think that once you're known to be willing to pay a bribe to someone who threatens you even a little you would be bankrupted in short time.

I think you could ask a similar question about how profits work in practice. In a hypothetical perfectly efficient market, all profit margins should be zero. But in practice the world is full of transaction costs, imperfect information, and scarcity. Maybe something similar applies to reasoning about the "acquire your competitors" strategy. In a perfectly efficient market it shouldn't work, but in practice the number of startups willing to take this approach is limited (because the number of available engineers investors is limited, and in competition with other sectors), plus you only have bother acquiring the ones that manage to succeed as a company first, which is somewhat difficult. Maybe we should expect the "acquire your competitors" strategy to be partially effective, if you combine it with a relatively good underlying business and relatively high barriers to entry. Not something that necessarily always works, but a piece of the puzzle?

this is why it's important to build an open-source tax calculation engine, as @breck and others have done, so that the creation of tax startups are not disadvantaged (they start from step 19 rather than step 1). this is (fairness in) market competition driving the market to efficiency, the exact opposite of monopoly/oligarchy (e.g., turbotax, taxact & hr block) extracting economic rents while languishing under lobbied regulatory protection.

Barriers to entry.

But it has been acquiring companies, as mentioned in the article. Why didn't those companies face a barrier to entry? Or if they did and it wasn't binding why is it apparently binding to other up and comers?

I'm Chilean. Chile doesn't have the best system by far, but the SII (IRS equivalent) has made a push to modernize for several years now. Filing taxes for 90% of the people is as easy as going to the website, check that everything is pre-filled correctly (and add anything that needs to be done manually, if for instance you didn't do electronic invoices). Submit. Takes about 10 min.

I've been living in the US for about 10 years now, I really wish we had a simpler system. Today, I just pay a tax consultant because I don't want this to be an extra thing in my head.

I use an accountant. It has worked for me for many years.

I'm grateful to be able to do that.

On another note, I used TurboTax, like, no exaggeration, over 20 years ago, for the last time.

They kept my email, and migrated me to one of their current accounts, and, on a regular basis, I get spammed by them to "reactivate my account."

The problem is that there is absolutely no way to respond, and ask them to remove me from their spam list. They try to get me to log in, instead, and the login attempts are always rejected. I have tried to contact their support, a couple of times, and received auto-bot responses that are basically repeats of the worthless footer in the spam they send me.

It's annoying. Not "jump off a cliff" annoying. More like "persistent mosquito" annoying.

The article seems odd to me. Tax filing at the push of a button still implies a middleman. You don't need to push the button.

We have the following data about you: [...] Does it look correct? [Y/n]

That's how it's done in France for example.

And Finland.

Except they also send it by snail mail, so you can read that and if it looks correct you don't even have to go online to click "OK". (Though I think I saw somewhere they may be phasing that out; saves on trees and postage.)

And Norway.

and Sweden.

“What if we could give customers a button. They’d press it at the end of the year and it would automagically file their taxes for them.” Literally is like this where I live. It's done through a government website.

I gotta say I have a love-hate thing with Turbotax. I hate the company and its influence peddling, lobbying, and near monopoly status, but Turbotax itself is a very well designed product with a great intuitive experience that has done a great job filing taxes.

So it's a rare case of a sleazy state-sanctioned (via refusal to simplify the tax code) monopoly with a decent product. Usually such monopolies have complete shit products because they don't need to care.

Hard disagree, I've had numerous problems with their app and they constantly try to upsell you even after extracting their egregious yearly fees. There has been no innovation or even noticeable change to their product in years.

I've been using TurboTax desktop version (the Premium edition) for 10+ years and never ran into any issues (and I have relatively complex income situation) except for one bug they have always had about incorrectly summing up the mortgage loan amounts of the same loan that you refinance or transfer in the same year (so it ends up looking as if you had 2 loans that year and consequently can miss out on large deductions). But this is relatively easy to observe and workaround. Compared to spending weeks doing my own taxes (I did them for 3 years) it's a total bliss.

I feel that a lot of people complaining about TurboTax upselling or anything like that are attempting to use the online version. I am very much opposed to giving some online site all my tax information so I will always keep using the desktop version for as long as I can. It includes 5 free federal e-filins and have to pay extra (about $30) for state filing (but can always just print out the filled forms and mail them in if you don't want to). And when I did the taxes on my own I had to print and mail them anyways.

Turbotax sucks ass unless you have a simple situation with a w2 and maybe a couple of 1099s, beyond that it's a nightmare to use (for me).

Maybe I am comparing it to typical accounting software, which usually has shockingly bad UI/UX.

Turbotax’s website commits all the web sins we condemn regularly on here. They hijack the back button, change your scrolling, don’t allow tab-spacebar-enter navigation, don’t allow pasting in some fields, and load buttons on a fixed resolution so you can’t see everything if you aren’t on a hires monitor. It’s really not a good product.

Before Turbo Tax I sheepishly headed down to H&R Block and got reamed.

Besides understanding my taxes (and taxes in general) better, I almost enjoy the process using Turbo Tax.

If there is a better Turbo Tax product out there, it would have to be very compelling to get me to switch. Besides familiarity with Turbo Tax, it pulls in last years data and saves me the more tedious steps.

Like you though I feel like I am locked in at this point.

H&R has a similar desktop product. The prices are in the same range and the lockin feels the same. Not sure what I am locked into though both products never find my W2s correctly anyway and import my stock divs wrong.

The issue is that they are so slick that you don't even notice the dark patterns that funnel you into needlessly spending money.

I buy the standalone version every year. I am not sure what dark patterns are in that version that you are talking about.

That's odd, I consistently have problems with it. It's fine if you add some W2s and work straight through to filing. But navigating back and forth through different sections never behaves the way I'd expect.

Things like brokerage transaction imports were simply broken while I was trying to file last year (which, incidentally, is the only reason I pay for it).

And their "UIs" for dealing with forms like K1s are often more confusing (to me at least) than the underlying IRS form.

TurboTax works great, until things get a little too complicated, and it quickly becomes terrible. What is needed is a strongly typed DSL where you can copy and paste your entire tax return as a single text document/spreadsheet.

TurboTax is so full of dark patterns to get you upsold into needless add-ons, I don't think you can say it really "works great".

It's intentionally obtuse and confusing for something that should be simple and straightforward for 80% of the population.

If all you have is a hammer...

Unfortunately TurboTax falls flat if you have a complex return. They "support" forms 1116 and 2555, but it's clear that they didn't put any real time into making sure they do the calculations correctly. Long story short, I got a check from the IRS for almost $1000 because TurboTax computed what I owed incorrectly.

Try freetaxusa.com. Its interface is just as easy but it's free.

In Brazil there's a software provided by the government for tax reporting (free service): https://www.gov.br/receitafederal/pt-br/assuntos/irpf/2020/d...

My wife is a tax accountant. From a software perspective taxes are a nightmare. I made a service BasisCalc (https://basiscalculator.com/) to automate just one little part of the big multi-dimensional elephant that is the tax code and it was terrifically hard to implement. I can't imagine doing the entire tax stack. There's local, state, federal, and international. The code changes all the time. The dates change all the time. There are real substantial penalties for being late. There are so many data sources to integrate. She spends thousands a year and many hours of her time simply on tax code updates. She has serious legal liability for her work. So will your software. I would pick an easier target, like solving world hunger or world peace. Taxes will be simpler when politicians want them to be simpler and there's no profit in that.

This sounds to me like the "invoice problem", or whatever you might call it. Consider business invoices. Tens of thousands of entities have to share the same general flavor of data, and each already has a system for doing it. They all have to receive and process that data regularly, and have their own systems, charts of account, item names, etc. Harmonizing all that is very difficult.

The IRS offers standard forms but there is often more than one way to select them or fill them out. For example, on an 1120S, the accountant might place an expense in one of the standard categories or in a table of other expenses. But even more difficult, every user might have different ways of categorizing their income and expenses, and the people sending them forms might do it one way or another. Such a service would have to be opinionated and convince each reporting entity to adopt the system in place of the home-built one they're already using.

I've been using excel1040.com for the last few years. It's an excel spreadsheet calculator, in the same format as all the tax forms.

You still have to know "how to do your taxes", but it takes away a lot of the busy work, and will flag certain things you may otherwise miss.

In addition to being very complex, tax codes change yearly. Whoever might take this on would have to take on that a tax code change made in December needs to be interpreted: What questions need to be asked to fill in the new line on one or more IRS forms? And any of the states can likewise make last minute changes. It's nasty time pressure because you have weeks to implement, test, and ship the accommodation to new requirements.

I also observe that the tax code was crazy complex before personal computers became popular in the eighties. Blaming Turbo Tax for the complexity is misplaced blame, though no argument they have a vested interest in keeping them complex, and they pay lobbyists to safeguard their interests.

I really don't get why people want to kill turbotax. I get the following:

1. the tax system in the US is broken 2. It needs to be simpler ... 3. kill turbotax???

For many people, such as myself, turbotax is doing exactly what most people want to kill it for... simplifying US taxes so I don't have to think about it.

Am I missing something? Do people just think oh, if turbotax dies, a free open source version of it is going to be as usable, consistent, bug free, and adopted? Or tax code itself is going to be as easy to use as turbo tax currently is?

I'd bet the cost of killing turbotax is probably greater than the entire net worth of turbotax as a company, with lifetime future revenues discounted to today, 10 times over.

TurboTax is preventing the government from offering a solution and I wouldn't be surprised if they promote complicating the tax code. It's incredibly common for companies to promote additional regulation to prevent competition.

ReadyReturn[1] was a 2005 California Tax prep program. It mailed you a prepopulated tax form. It was incredibly popular during the pilot program and TurboTax spent $1.7 million lobbying against it.

Most people don't have complicated taxes, but I find even collecting all the forms from employers and institutions and filling out the forms a pain. I'm confident it's the most error prone part. I honestly don't think capital gains or HSA complicate things all that much if you're automating things. I don't care how complicated the tax code is. I have personal opinions on what they should incentivize, but don't care how it's calculated. Most countries offer prefilled or tax software to cover basic needs.

[1] https://en.wikipedia.org/wiki/ReadyReturn

> Am I missing something?

Turbo tax and friends literally lobby against tax code simplifications, as well as the IRS providing tax prep or return-free filing.

They encourage and contribute to the problem so they can keep selling the solution.

The great irony in all this is that TurboTax has become the villain it was trying to fight, aka "adding a tax to filing tax returns". "Tax" not just in monetary terms of purchasing an annual software but also in the time spent in filing.

Why were they allowed to acquire a competitor (CreditKarma) again? Until we have stronger regulatory bodies, better funding for IRS, and just the will to fight corporate encroachment, this "tax on tax" will remain.

(As a side note, I suspect TurboTax software is designed to be complicated and obstruct the filing process so that you feel like you got your moneys worth after spending 2-3 hours using it.)

I used to work on a tax product.

I 100% agree with the premise: to unseat TT, you need a auto-assembler of tax, like other countries have. I’m not sure why the author didn’t delve into it, but essentially if you have payroll integrated, you can enable this for a LOT of Americans. They work 1 job and take standard deduction. Don’t go after the complex 1% tax filers, do 1 job and do it well.

Imagine you get an email. “Hey it’s tax time. Looks like you’re due a refund of $1000. Click here to confirm and file.” That would be really powerful. For many Americans the tax refund is the biggest paycheck of the year. Anything that makes that easier is going to do well.

Every time this comes up, people seem to be missing the reason tax codes are as complicated and loophole-filled as they are, because they approach the problem from the wrong place. The tax codes of all modern nations are not about revenue. They're about control. The entire purpose of the machinery is to punish some behaviours and incentivise others without having to go through all the trouble and checks and balances of passing specific new laws. The overall income from taxes isn't how the government funds their spending, it's simply a means to control (but never enough to eliminate) inflation.

No mention of TaxAct on this post; is their marketshare really that insignificant?

Seems to me that for a lot of people, maybe the majority, the government already has all your tax data and you shouldn't need to file, only accept the government's numbers. I am in the opposite situation, especially as I have to file in two countries. Not living in the US doesn't give you a pass on filing US taxes. I get to buy two different versions of TurboTax :-( We don't worry much about a US audit (some say the IRS is starved for funding by anti-tax politicos?) whereas in our other country they quickly catch even the smallest error.

Use this IRS tool to find which service lets you free file. https://apps.irs.gov/app/freeFile/

That link is only for people who earn <$72,000 / year. Everyone can use https://www.irs.gov/e-file-providers/free-file-fillable-form..., though.

Don't give turbotax your money. If you want free, high-quality tax prep, consider Credit Karma (https://www.washingtonpost.com/technology/2019/03/07/when-ta...)

The difference is that they're using your data to target financial products at you (just like any other free service). But they don't sell your data at least.

You realize Intuit owns Credit Karma now, right?

Square owns Credit Karma Tax. Intuit was required to divest that part of the company as a part of the merger. https://www.justice.gov/opa/pr/justice-department-requires-d...

Now it's the same company unfortunately. Intuit completed their acquisition of Credit Karma in Dec, 2020.

https://investors.intuit.com/news/news-details/2020/Intuit-C...

The part you're missing is that as a part of the acquisition, Intuit was required by the Justice Department to divest the "tax" portion of Credit Karma - so no, they're not the same company. Credit Karma, the main app, is Intuit. The tax portion of Credit Karma is not.

https://www.justice.gov/opa/pr/justice-department-requires-d...

Square owns Credit Karma Tax, not Intuit.

This sounds like a great project once the US revises it's tax code. And a lot of wasted of time should it be revised to incorporate digital tools available today (like Mint transaction categorization). It's unlikely to be revised in the near term, but I have hope that throuh some bad economic or social upheaval, we may see some appetite to increase US GDP in a real way and decrease the wealth disparity by simplifying tax filing in a real way.

Are accountants prohibitively expensive in the US? I don't use any tax software myself in the UK - I just pay an accountant $250 once a year and he does it for me (using some software I presume.) It's not really on my radar as things worth trying to automate or use software myself for, let alone building my own software! I'd have to be able to do it in just a few hours to be cost effective.

That's about what those franchise tax prep companies charge (Liberty Tax, Jackson Hewitt, etc).

I found out my parents used one of these places last year, and they charged them about $350 for a SIMPLE tax return. It looked like the goal was to charge about $50 less than the eventual refund, and also push the "get your refund right now!!" scam (i.e. take a high interest loan for the refund amount).

This year, I did their taxes and mine too (separately), using FreeTaxUSA.

You also have to trust the accountant, and the accountant is not liable at the end of the day anyway.

If you are a W-2 employee, even with having to file a Sch 1/2/3/B/D/etc, it shouldn’t take more than a couple hours. And you get to know you did it right.

Of course, if you don’t enjoy reading tax instructions, I highly recommend parting with a couple hundred dollars and letting someone else do it.

> Are accountants prohibitively expensive in the US?

No, they're not. Obviously cost will vary based on complexity (self employment, side-hustles, stock options etc) but for the most part a basic return by an accountant would be in line with what you're paying.

At that price point, your accountant is just charging you to do the data entry into Turbo Tax or equivalent. It's more work to coordinate, and and provide all the info, and costs more.

> At that price point, your accountant is just charging you to do the data entry into Turbo Tax or equivalent. It's more work to coordinate, and and provide all the info, and costs more.

People in this thread are talking about literally writing their own software to do it. Half an hour to collect up my payslips and email them to an accountant for $250 can't possibly be more work and cost more?

The idea of paying someone $250 when the government already has the data is ridiculous. Accountants are accessible to some, but we shouldn't need to pay someone when the government can do the calculations.

The government really doesn't have the data. Do they have cameras in your home detecting whether or not you paid for more than 50% of your child's living expenses?

I wonder what happened to turbotaxsucksass.com, it was listing a bunch of free alternatives and it mysteriously expired right before tax season began.

It was set up for Hasan Minhaj's show, and the show was cancelled. Since it was set up right before previous "tax season" I'm assuming they'd just paid for a year.

It's in archive.org, though, e.g. [1], and it's just a static site with a bunch of links.

[1] https://web.archive.org/web/20210130180334/https://www.turbo...

If they could only import cryptocurrency information from Coinbase...

https://ttlc.intuit.com/community/taxes/discussion/re-how-ca...

In case you're wondering how they justify keeping the system the way it is, the going line is, "If you allowed auto-filing taxes, the government will sneak in new taxes that you'd never even know about!!"

The other argument I've heard is, "it should be painful to file taxes, to make people support the idea of getting rid of taxes".

TurboTax is disgusting. I used them for a few years in the past due to their great marketing and easy to use website. But they pulled a bait & switch on me last year, at the last minute (after I had done everything) I was required to pay north of $120 to actually file.

The problem isn't that they want money to use their software, it's that they're not upfront about it. Free is thrown in your face about 100 times during the process and then they surprise you right at the end after you've already invested a bunch of your time.

My taxes are dead simple - I just don't trust myself or care enough to file without some software assistance. This year I'm using a different company who appears to be much less shady and will never use TurboTax again. I hope TurboTax making my money once was enough to lose me as a customer for life. In reality I hope the company ceases to exist in the near future, but that seems unlikely.

I'm excited at the prospect of free & open source tax software - for next year maybe.

If your taxes are super simple, you can use the IRS's free fillable forms:

https://www.irs.gov/e-file-providers/free-file-fillable-form...

You basically type your numbers in and it does the math for you. Then you print it out and mail it in. It can't do anything complex, though.

In my experience (Minnesota), state filing is even easier, usually just copying numbers from your federal form and doing one table lookup. No reason to give the shitty companies more money.

Free File is made by Turbotax. It's likely to discourage the government from entering the space.

  dig freefilefillableforms.com

  ;; AUTHORITY SECTION:
  freefilefillableforms.com. 300 IN SOA a18-64.akam.net. nadmin.intuit.com. 2020102802 10800 3600 604800 86400

Thank you, that actually appears to be much more user friendly than I would have imagined. When I think of government websites I think I'm still stuck in the mindset of government websites 10 years ago (aka absolutely horrible). I've been surprised at how good things have gotten regarding them a few times, so I guess I need to snap out of that mindset.

While looking over the requirements and supported forms I didn't find anything about student loans (form 1098E), would you happen to know if that method is compatible with them?

Also, if your income is under $72,000 you can use the TurboTax website completely free through the Free File program: https://apps.irs.gov/app/freeFile/browse-all-offers

Thats exactly what I got that I felt like the Article didnt seem to get.

Turbo Tax is required to abide by the FreeFile rules. this means that for some customers their software is required to be free.

By some customers I mean like 60%.

So TurboTax moved to seeing their product as an upsell game, start at free and UHOH! You have to pay us! To that they dont have to be upfront because they 'Didn't know you made too much'.

Now, this is where things get fun. How does TurboTax get you to pay? Three ways: 1. Have your info on file so you don't need to enter it. 2. Make sure to place the payment step at the VERY end of the process when you are deep into the system and offer ways to pay it via your return. 3. Agressive UI and UI dark patterns to make the software appear to work harder and be more trustworthy and to make you feel as if you put in more involvement. There are numarous animations stating things like 'Verifing your maximum money back' and such that are all false loading screens. It all makes the customer trust it more while it's just wasting their time.

TurboTax is a bait and switch company that for many is free and makes their customer feel like they did the work. You can't compete with that concept by offering an automatic engine with no involvement becasue the customer will think it's wrong or they are being screwed and any upfront cost to cover development will make the customer think your product costs more.

Intuit (owner of TurboTax) was sued over this because they had some of the darkest patterns imaginable around FreeFile. They blocked search engines from finding it using robots.txt. They would show a page where only 1 tiny link brought you to the free site, while all others switched you back to the paid one.

Pro Publica did some excellent reporting on this in 2019 and they seem to have made it one of their pet projects.

You're not required to pay anything if your taxes are 'dead simple' you can fill out 1040EZ for free. And still can still compare turbo tax for free to see if you got the same numbers, and send it in for free. Nobody forces you to pay. I did that when I was single.

Nowadays, its complicated. Mortgage deductions, rental income and depreciation, independent contractor, children, jointly filing. I could attempt to do that on my own but it would take hours and I likely would leave money on the table. In my use case I am more than happy to pay a hundred bucks. It's actually less if you file early too, and its deductible in your next years tax liability... I don't understand why everyone here wants to kill Turbo Tax. It makes my life easier and less stressful around tax season.

TurboTax Deluxe comes in a version that includes a state filing, and one that doesn't. There is a $10 price difference, but if you get the Federal only one, the price to add a state filing is much more than $10. Last year, the listings on Amazon were very hard to distinguish, and my father, who is pretty tech savvy for his generation, bought the Federal only one by accident, so state filing cost him much more. It seems like the Amazon listings are a bit more clear this year, but the whole thing put a sour taste in my mouth last year, and I switched away from TurboTax.

taxes can be e-filed, and it seems like the government purposefully prevents average citizens from filing basic tax forms -- previous stories showed evidence of Intuit lobbying the IRS for this specific reason.... I think the real reaaon the federal government (IRS) prevents a simple web interface for tax prep is because it would immediately put out of business a whole cottage industry created around this purpose. For business filers, it is important to have a CPA to certify the preparation of the results before submission, and I can understand the need for this industry. However, for the vast majority of people getting paid on W-2 with various allowances, it would have been fairly trivial to design a web interface to handle these submissions. It is strange that the web has been around since 1990 and yet no such web site exists within the IRS....

Why not kill TicketMaster or eBay?

I actually dont mind TurboTax - they make it easy and they remember what happened last year. Could competition make it even better - sure.

But where near monopolies really exist is with eBay and TicketMaster. Sure there are 1000s of auction sites and ticketing sites - but none have quite the power as these two.

The way to kill turbo tax is by getting rid of the entire industry. If other countries are able to automatically fill out these forms for you and determine your tax liability then that should be done. If you get a refund, then the IRS will send you a check or direct deposit it into your account.

I'm willing to pay TurboTax AND test (with my info) whatever else someone gives me to run locally on my Windows machine, offline, in a virtual machine. I'll do it every year, until the software is good enough to use without paying the TurboTax Tax.

I'm also willing to help debug it.

No doubt that TurboTax is pretty dominant, but that Google Trends comparison doesn't look as bad if you use H&R Block's actual name.

Of course, H&R Block has essentially all the same perverse incentives as TurboTax does, so it's not like it matters that much.

Ok am curious.

Why people hate TurboTax so much ? Is it because its a monopoly (or) does it uses any predatory practices (or) kill other companies that tries to compete.

Disclosure: I used TurboTax to file this year's taxes and kind of like their UI and ease of use (for top $ of course):|

All of the above. Yeah TurboTax is great because they make it easier to do something nearly everyone hates to do and doesn't understand. So most people don't care about why Intuit is a terrible company because TurboTax is their only option and it works well.

Intuit has excessively lobbied the US government to prevent simplification of the tax code, they struck a deal to offer a free option in return for the IRS not developing their own alternative, and then deceptively hid access to the free option so that users are tricked into purchasing it anyway.

The other comments provided a great overview, but I would really recommend read ProPublica's reporting about them [1]

Some very brief highlights:

- They use dark patterns and other trickery to prevent people from filing for free (the vast majority of Americans can file for free via IRS free-file), instead directing them to the "free" up-sell laden product

- Lobbying against literally anything that would make filing taxes easier or cheaper. It doesn't have to be this way (and it's not in many countries), but it's how they make their money.

[1] https://www.propublica.org/series/the-turbotax-trap

Not only do they kill other companies, but they kill the government's ability to compete. As is mentioned in other threads, many countries don't have this tax filling non-sense at all. The government just says: Here's what we're basing your taxes on; let us know if there are any mistakes.

It's absurd to spend ones time and money to file taxes only to have the government punish you because you didn't get the right answer.

People don't like TurboTax becauseof their advertising and lobbying tactics. They target income levels that can file for free online and spend money 'lobbying' the government to allow the practice to continue. That being said, I use Turbo Tax and love it. The clean UI made filing take 90 minutes despite having several property and other transactions this year.

Law of Unintended consequences: I pay an absurd amount of taxes, enough to fund several countries. Making it easier to pay them isn't going to make the fact that we subsidize high ranking government employee's lives and donors any better.

People misinterpret TurboTax.

Turbotax is a by-product of US tax law which gradually morphed into a wealth hiding and manipulation engine.

Can you kill turbotax? Possibility.

Can you avoid having an inherently anti human tax law, and therefore eliminate the soil of turbotax? Unfortunately no.

I use HR Block application after TT put it its price and works great. $29 bucks.

Younger me would say, "Or we could actually simplify and fix the tax system!". Older me unfortunately knows just how corrupt the whole thing is, thus has no hope for such honorable dreams, and is sad.

Hello HN! I'm the founder of Keeper Tax (keepertax.com) and killing TurboTax is our mission.

We recently raised a large round, and we're hiring engineers, designers, data scientists. Ping me at paul@keepertax.com

What's the Keeper Tax business model?

Note that - Tax business is not scalable if you are looking for a year long activity in business. Tax season is from Jan to April 15th. After Apr 15, your teams & infrastructure have to scale down.

After using TurboTax for years, I switched to using one of the alternatives and it worked just fine. Maybe even better than TurboTax.

> What it will take to defeat TurboTax Get rid of the income tax and the irs

As a non American i cant beleive this is a thing..

I know, I'm a Brit and my girlfriend doesn't even remember her login to HMRC Gateway - if she pays too much tax she gets a rebate automatically, other than that its not even something we think about.

How do I invest?

“Jesse Wilson said to me”

Who?

Taxes are a complex topic, and I believe that "TurboTax sucks" or even "the US tax code is too complex" are insufficiently insightful.

WHY TAXES IN THE US ARE COMPLEX

The US governing mindset accepts that people follow financial incentives and disincentives (capitalism.) Thus the government can encourage or reduce certain activities via tax code treatment.

Some examples of activities that the government encourages via the tax code are: marriage, having children, taking care of aged relatives, donating to charity, driving a low emission vehicle, home ownership, getting an education, and investing for the long term. And these are just the simple ones that most people encounter, there are many others.

Further complexities stem from attempts to make the code fair. For example, if your work requires you to spend money on things like uniforms and certifications, the code has provisions to exclude that from taxable income. Likewise, you don't get double-taxed on foreign income you had already paid taxed on abroad.

Finally, the US is a diverse country with diverse values. Each state and municipality has a different philosophy on taxation and what the tax code encourages and discourages. People to some extent migrate towards tax regimes that align with their values, but of course this is another source of complexity.

The bottom line is that the US tax code is complex because it tries to do more and has to account for more variability than perhaps other tax codes out there.

ARE TAXES HARD?

The answer is: it depends. For the simple person who draws a salary and that's all, they can fill out their taxes in a few minutes, for free online - or even by hand in a form with no problem. I did this when I was a college student and early in my career. I often hear foreigners brag how their tax form is 3 lines - that's great. For many in the US, it's not much more than that. But, as you get into more advanced scenarios and want to take advantage of government incentives (or the government wants to make sure you pay your fair share in some otherwise tricky cases) you have to put in more work.

DOES TURBO TAX SUCK?

It's easy to find faults with most software, but the bottom line at least in my experience is it has scaled very well as my tax situation grew in complexity in different ways. The fact that one can rely heavily on this program for a workflow that has implications of tens of thousands of dollars every year is pretty meaningful.

CAN IT BE REPLACED?

Good luck. For very simple cases I mentioned above, sure - and there are already lots of cheap and easy ways to file in those cases, including trivially on paper. But once people have complex situations and many factors intersecting, your software needs to account for all of those factors well. That takes tremendous work year after year - to understand, encode, and test all of these things. In my opinion that's exactly the kind of project that benefits from commercial investment and wouldn't do well as open source.

This guy has built a lot of the future judging from his bio.

What exactly does everyone have against Turbotax? I use it every year and I love it. Sure I could save a hundred bucks and spend hours filling out IRS worksheets, but I don't want to. They have excellent UX, and serve as a reliable secure cloud repository for all of my financial information. What's the big deal?

Filing taxes should be much simpler and free for everyone, but they lobby the government to prevent that, among other things. Quick Google search result: https://www.propublica.org/article/inside-turbotax-20-year-f....

I'll actually give a response that is not Turbotax specific.

The forms I get every year from the ~10 banks I have accounts with and the ~2 companies I earned a salary from are essentially just copies of forms that they also had to send to the IRS. So in principle the IRS already has the same information I do when it comes to how much tax I paid and on what income.

It is not clear to me why I have to share:

- My name

- My address

- My _social security number_

- My spouse's name

- The names of my children

- All their social security numbers, too

- How much money I made

with a for-profit company. This is information that the IRS already has. To me, this is totally unnecessary. I would much rather the government increase the IRS's budget so that they can implement services that provide any help I might need directly, rather than through a totally unrelated corporation. The IRS's job is to make sure you paid the tax you owed. They don't dictate how much tax you pay. I truly believe that with the right financial resources they can make it easier to make that payment (and correctly) for: 1) us; and 2) them.

For folks with very simple tax situations, this seems like a no-brainer. For folks with complicated situations, you are still more than welcome to talk to a tax professional for advice. But a company _doing your taxes_ for you seems unnecessary.

Wouldn't it be lovely if instead I went to www.irs.gov to file my taxes, and I was presented with a very similar interface to what for-profit companies are providing, but with the information already filled out because they already have it? Essentially, all I'd be doing is sanity-checking the inputs.

You're paying for a service that should be provided for free by the IRS, as happens in many other developed countries. It's unnecessary financial drag on the economy.

Read this ProPublica story on how TurboTax has lobbied for 20 years to prevent people from filing for free easily: https://www.propublica.org/article/inside-turbotax-20-year-f...

Because the IRS should do it for you, for free, but doesn't because TurboTax uses the money you pay them to sponsor legislation to prevent the IRS from doing that:

https://www.propublica.org/article/inside-turbotax-20-year-f...

In some countries the government calculates the (simple compared to US) taxes and all you do is approve it. That would be possible here too for most people, but neither politicians (of various stripes) or Intuit wants anything to change. Only the US turns paying taxes into the equivalent of Quantum Mechanics.

They lobby to make taxes complicated and to prevent the government from doing part of what you’re currently paying for, for free.

Last year turbo tax said I could file for free. Every so often it asked if I wanted to upgrade to a deluxe version for $70. I said no. After a couple hours of filling everything out, it told me that my income, from one of the first steps, was too high so I would need to pay $70. Deeply unethical to tell me that at the end when they had the information necessary to do so at the beginning.

Also, fuck them for charging $70 while lobbying for taxes to remain difficult to file.

The big deal is that all the functionality of TurboTax could/should be available for free (as is done - in some form - in other countries).

Reply on news.ycombinator.com