I can’t wait until the most racist, ignorant and innumerate among us start complaining about “Big Government” doing their tax return. {lol} The Gov’t already has all your information – and Google and Facebook have even more.
https://www.npr.org/2023/05/16/1176417594/irs-taxes-filing-turbotax-intuit-tax-prep
intercst
I don’t know if its still on the 1040 form but there used to be a line, after most of your stuff was filled in, that asked if you wanted to stop and just send it in and let the IRS figure your taxes for you.
I could see how “let the IRS figure out your taxes for you” would be a problem for many people. But the system being proposed is simply that the IRS would fill out the return with the information it already has (i.e. W-2, interest income from your bank, dividends and capital gains from a brokerage account, etc.) and send it to you for signature. If it looked accurate and complete, you’d sign it and be done. If you had itemized deductions, or Schedule C income from a side hustle, you’d still have work to do.
I expect the tax preparation software people to be telling as many lies about this as what we see around Medicare Advantage.
intercst
The new method would be just like that. But you could stop right after entering your name and SSN.
Mike
Exactly. That was my point. We’ve already had that. People just didn’t realize it. This new proposal is maybe coming at it from the other direction but it’s the same thing.
True IRS story. On 2 or 3 different occasions going back to the 1990’s I did that. I had managed funds in those days. A few years I had to sell off some to reorganize and cover my pension shortfall. All that “cost basis” stuff for all those in’s and out’s was more work than I wanted to do so I sent it in and said “you figure it out and bill me.”
Months go by I get no bill, no calls, and no additional IRS letters. So, I call them 'cause I don’t want to go to jail over some mutual funds. They told me they waived the taxes. I asked; “Huh? wha…?” I had filled in “occupation” with “retired” ( I was 39-43 or so at the time) They said lots of retirees (probably assuming Ma & Pa Kettle) sell off mutual funds to cover expenses and they know how confusing figuring cost basis can be so if it’s not too much they just waive it. They told me it was the most often issued tax waiver.
After I switched to Turbone Tax of course, they catch all that crap but at least it’s easier to figure
More or less how Singapore tax system works. I log into the IRAS site and all my information is already in there including rental income and expenses; which is based on a % of income. I only have to enter mortgage interest expense and click Confirmed. Tax time each year… about 1 min.