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Why Tax Day in the US is so painful

In most wealthy countries, the government figures out how much in taxes you owe them — and for free. As all of you know, that’s not the case here in the United States.

Many of you probably used TurboTax, owned by Intuit, over the past few days to file your 2021 taxes. That one company is largely to blame for why Tax Day in America continues to be such a hassle year after year.

In 2003, Intuit and a handful of other tax filing companies like H&R Block entered into the IRS Free File Alliance with the IRS after George W. Bush proposed a no-cost federal tax preparation website through the IRS. This would’ve decimated these companies’ entire business model, so the IRS promised not to create a government-run, no-cost tax service on the condition that the companies added a “free file” option for customers.

Reporting since then has shown that Intuit and other tax prep companies hid their Free File options from Google results and lured customers with the promise of Free File only to then hit them with fees later in the process. The FTC filed a formal complaint against Intuit for this “bait and switch” practice in late March.

That’s not the only way Intuit has worked to make filing your taxes as difficult as possible. The company has spent $41 million on lobbying since 1998, including nearly $3.3 million last year alone — all with the intent of preventing the government from establishing a free tax preparation service. It’s not just Intuit: H&R Block dropped more than $3.4 million on lobbying last year.

It’s worth the investment. As of 2019, Intuit co-founder Scott Cook was worth a cool $3.3 billion, while former CEO Brad Smith was worth well over $200 million. All those exorbitant fees and hours spent poring over complex documents are lining their pockets. Like so many other problems plaguing the country, Big Money in politics is largely to blame. Know the truth this Tax Day.

by Anonymousreply 15May 19, 2022 5:55 PM

It WAS very tough to find the free file option on Turbotax. I helped my dad, retired with just SS and a small pension, do his taxes.

Turbotax kept trying to force him into a paid version, when I knew it could file for free. Because I knew a free version existed, I kept at it and found it. Most people would have given up and paid.

by Anonymousreply 1April 20, 2022 2:51 PM

I had to pay to file for the first time with TurboTax this year. The reason? Because I'm on the health insurance exchange for my health insurance. That should be fucking illegal. Never using them again. I think any politician who actually made tax day a thing of the past would win anywhere in the country.

by Anonymousreply 2April 20, 2022 2:55 PM

When Turbotax first came out, I was thrilled because filing taxes was just a pain. Turbotax made is to easy,

But then I found out about all the lobbying and how Turbotax calculated that it should take every American 2-3 hours to do their taxes to keep it comfortable but not comfortable enough to do on their own.

by Anonymousreply 3April 20, 2022 2:57 PM

Every time legislation is proposed to make the tax system easier, the lobby for CPAs and the H&R Block made sure it doesn't happen.

by Anonymousreply 4April 20, 2022 3:01 PM

It would be so nice not to stress every April

by Anonymousreply 5April 20, 2022 5:56 PM

Who’s eligible for free file with TurboTax? Can you use it if you have a mortgage?

by Anonymousreply 6April 20, 2022 6:45 PM

[quote] Who’s eligible for free file with TurboTax? Can you use it if you have a mortgage?

Low income people, especially the elderly.

I don't believe you can use it if you have any deductions like a mortgage.

by Anonymousreply 7April 20, 2022 6:47 PM

I started with TurboTax online this year. The Federal filing was free the state was $14.99. Okay, That is not that big of a deal. Eventually it was determined I was eligible for an Earned Income Credit. Now they wanted $49.99 for the Federal filing. Fuck you. Being eligible for an EIC suggests I have low income, so why charge for it? After searching thru the IRS Free Tax services page I tried Free Tax USA. Bam....quick and easy and Free!

by Anonymousreply 8April 20, 2022 7:07 PM

The fact that Intuit's bank charges somebody $25.00 to transfer a state/IRS refund into someone's checking account, a transaction that probably costs about 50 cents, shows you what dirtball scumbags these people really are.

by Anonymousreply 9April 20, 2022 7:18 PM

Foreigner here, living (legally) in the US for many years now. I love the country but I hate, hate, HATE the tax system! Federal, state, county, city taxation, so many complicated layers with so much duplication, and even tho' we file electronically - H&R Block $$$ - the state always asks for a paper copy. Nope, I'm not doing that.

I'm happy to pay my taxes but it should be an easier process.

by Anonymousreply 10April 20, 2022 7:31 PM

I used to work at Intuit. The problem with them is that they don’t really innovate. Pretty much all of their products, TurboTax, QuickBooks, Mint, etc. are products that Intuit acquired. God help them if the federal government ever changes the tax laws and does your taxes for you.

by Anonymousreply 11May 19, 2022 9:06 AM

Anyone else have experience of FreeTaxUSA? I'm thinking of trying it next year.

Offsite Link
by Anonymousreply 12May 19, 2022 9:26 AM

[quote] the government figures out how much in taxes you owe them — and for free. As all of you know, that’s not the case here

It is the work of income tax lobbyists whose main comes from helping people dishes taxes. Otherwise, unless you're Trump trying to cheat the system, its best if you just get an invoice from the IRS telling you how much you owe.

Oh they know exactly, down to the last cent.

If you don't believe me try sending a lesser amount and they will tell you how much more you need to send in and why.

by Anonymousreply 13May 19, 2022 11:28 AM

At least for 2022 Turbo Tax was free for those with simple returns and earned less than $73k in income. Number might be more or less, cannot recall exactly.

However self employed/gig workers/independent contractors, those with business income, etc... had to use other versions of TT which were not free.

Have been using TT for years (self-employed) and even though couldn't file free this year, sucked it up and stuck with them.

Know the look of app by now, and TT does quite a good job of navigating one through various self-employed tax paperwork to ensure all possible deductions and credits are applied where applicable. Also they automatically input information from previous year so that is something I suppose.

As self-employed business owner can deduct cost of TT, so that's something anyway.

Considering how often IRS computers have been hacked in past, and or other information about taxpayers stolen, am not sure I'd trust any tax prep service run in house by IRS. Suing Intuit might not be easy, but you can forget holding an agency of federal government responsible.

Offsite Link
by Anonymousreply 14May 19, 2022 12:53 PM

You all think you have it bad -- try being an American living and working abroad. No accountant here will touch a US tax return (many can't even believe that I, as a non-resident, even have to file at all). And that's not even touching on the nightmare that FATCA has created.

I have to do all my taxes myself, and it is hella complicated. Ever filled out a form 1116? Yeah, don't do it.

The lobbyists and the Republicans starving the IRS are all tax criminals, as far as I'm concerned.

by Anonymousreply 15May 19, 2022 5:55 PM
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