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Comment by denimnerd42 | Hacker News Reader

I'm not arguing one way or another but one point the tax software companies do have is who pays the cost. In the commercial product arena, the products are bought by people who make over median wage. The lower income folks have simpler taxes usually. The free products cover them generally. I may be wrong but that's how I see it. I didn't feel the need to pay for any software until I was making a lot of money (relative to median) and managing a lot of assets.

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That might be true in theory, but in practice companies like Intuit and HR Block use dark patterns to trick users into paying when they should qualify for free filing.

You can read about the settlement from ProPublica: https://www.propublica.org/article/intuit-will-pay-millions-...

And you pointed out exactly what the problem with the current system is.

The rich can pay someone to do the work for them. This saves them time, stress, energy, etc. The poor cannot. They have to do all this themselves and then they’re open to the risk of actually getting something wrong. And the impact of getting something wrong is highly imbalanced. If they get something wrong and end up paying more tax than they need to there will never be a second thought given to it. But if they mess up and pay less taxes than they should they will be hit with a penalty, interest, and even maybe an audit.

And the idea that everyone should be reasonably competent in taxes seems a little ridiculous to be honest especially when no one is taught how to do taxes in any point in their lives.

An alternative might be to teach how to do taxes in school, but at that point the cost of teaching taxation would far exceed the cost of developing this software, never mind the human hours that are wasted.

> If they get something wrong and end up paying more tax than they need to there will never be a second thought given to it.

Anecdotally, I messed up copying tax owed from the table a couple years back, and the IRS sent me a letter telling me I made a mistake and overpaid, along with a check for the difference.

In any case, a lot of the complication in the tax code comes down to the government incentivizing certain behaviors, so it makes sense that we should put more focus on teaching people to read the rules and find out what those incentives are. Of course a free calculation tool to run simulations could help people to understand those rules, and we ought to make the actual filing more convenient for everyone.

True, the IRS is generally really good about fixing and refunding basic math errors. Had you missed taking a tax credit you were eligible for, there’s approximately zero chance you would have received a similar letter.

Another alternate is to eliminate the federal personal income tax. W-2 employees would get immediate increase to their take home pay and employers would get out of tax withholding chores. Feds can just increase the already large deficit spending to cover the tax reduction or reduce spending.

Deficit spending is already the highest it can be without jeopardizing the Dollar. Sometimes I think about them reducing spending instead, but then my alarm clock wakes me up.

More war will increase deficit spending, regardless of our income tax contributions. Why contribute further?

They don't need a war to increase deficit spending. They'd have done it already if they could.

If you are self-employed, you have to pay for TurboTax regardless of your income level. We had to pay for TurboTax when I was a student and my wife was making $20k a year teaching music lessons.

You don't have to, you could try to do the paperwork yourself and severely screw it up like I did as a contractor right after college. Or really roll the dice with a pirated TurboTax.

I mean, fair. I meant that in order to use the TurboTax we had to pay for it.

Many of the lower income folks I know are too nervous/not comfortable with their own ability to file their own taxes and use tax preparer services. Some also do this in the hopes of getting their return quicker, so they not only pay to file but then get hit with the equivalent of a payday loan on their return.

> who pays the cost. In the commercial product arena, the products are bought by people who make over median wage

~40% of households pay no federal income tax today. They'd literally pay nothing for this service.

But do 40% of households not file tax returns, because that is what we are talking about here, and I'm pretty sure a large portion of that 40% do file because they get refunds/rebates, and I'm pretty sure a large portion of that portion use a service because they can get their refund/rebate quicker (though as a loan at payday loan advance rates).

I'm not disputing that many of them file a return. I'm saying that they wouldn't possibly be paying for this system, which is paid for by federal taxes.

> The lower income folks have simpler taxes usually. The free products cover them generally. I may be wrong but that's how I see it.

Sure, but that's also how taxes generally work as well. People making less money will be paying less for the IRS service just as much as they would be paying less for the TurboTax system, as it currently is.

https://www.reuters.com/legal/government/intuit-reaches-141-...

> The lower income folks have simpler taxes usually

Not sure about that. They qualify for a lot of complex rebates and stuff. When you make a certain level that they consider middle-class, suddenly your taxes become a lot easier (in a bad way).

Minus all the profits the companies take…

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