The rest of the developed world has had this for decades.
So I fully expect this initiative to be lobbied out of existence by Intuit and the rest of the tax filing industry.
Pretty sure most people outside the US never even have to file a tax return? Income tax is deducted at source by employers. Solicitors collect it if you buy/sell a house. Etc etc. You only need to do a tax return if you're self-employed or quite wealthy (in the UK, at least).
I am self-employed. It takes about an hour to do my taxes online.
In France everyone has to fill a tax return. It will be prefilled with your salaries, but you still need to add deductions (for example house renovations or child care) or special revenues like real estate.
But yeah, if you only have salaries and no deductions you just validate your prefilled return and be done with it.
Australian here. The ATO (australian tax office) has a website you go to. It is pre-filled with various dada, your salary, your bank interest, uni loans, etc.
You add any additional salary, eg gig economy or crypto earnings (lol) and put in your deductions. I deduct heaps because I make money on the side renting out my camper van, and all its expenses are deductable from its earnings, but if you just have one job and thats it, then you can be done with your tax return in 10 mins, for free, online.
You can even preview your expected tax return before you commit. Once you commit, the return lands in your bank acvount usually within a week or so. You even get a receipt showimg what they spent your money on.
Western Europe here. I’m old enough that I’ve had to file many paper tax forms. There have always been free services to help with that.
Now you can do it all online, and the known information is pre-filled. The last few years you don’t even have to click “accept” anymore, accepting is automatic if you don’t do anything.
That said, there still are paid services, but their main aim is to find all the ways to reduce what you pay (and they are likely used mainly by the well off).
Update: An Intuit spokesperson contacted TechCrunch to call Direct File “wholly redundant,” and potentially a “financial nightmare” that will cost billions. But we won’t know until we try.
that will cost billions.
Cost whom billions?
To the taxpayer, ofc. As opposed to the status quo, that costs billions to the taxpayer.
Intuit's bottom line.
Yeah, even my third world country does this. But this only works if you only have a 9 to 5 job. Some people have more complicated tax.
This guy explains it a bit more:
Luckily, most people are 9 to 5ers. The vast majority of people have simple taxes that a trained monkey could handle if it weren't for the Intuit cabal.
Let not perfect be the enemy of good. This is a good step and from here, we can improve the system by steps until the only people who can't use it are tax cheats. Over optimistic? Yes, but I'm taking my wins to go.
What? The government will actually collect taxes itself like every other sane country, instead of privatizing it out to middlemen grifters? Oh my, where is mah fainting couch?
Oh my, where is mah fainting couch?
Here it is, RariJack
Why can't they pre fill in the form and ask us if it's correct. The cast majority of us have pretty straight forward filling is.
Because Intuit and H&R Block have given more money to have it stay the same than anybody has for simplifying it.
a subset of lucky taxpayers in as many as 13 states
This makes it sound like some dystopian survival lottery.
I volunteer!
Four states signed up for the test, the rest "may be eligible" due to not having state income tax.
.” In software terms, we’d probably call this an alpha.
No, we'd call this a closed beta test.
Where I work, we'd just call it an established product...
I've been using IRS Free File Fillable Forms for a few years now. It's not super great but it does the job. It also has a dorky name.
IF^4
Yeah. Stupid name even when I try to hype it up.
Wait, do US citizens have to pay to file taxes? Or is this a service to help navigate the complexities?
Not American, bit my understanding is that filling taxes in the US is complicated and confusing to the point where most people use paid software to do it. There is an obvious lobby of tax filing software companies keeping it that way.
nailed it.
It isn't even that complex if you are doing basic forms. Literally plug in numbers from a document that gets mailed to you January 15.
These are just private companies that typically fleece you out of a percentage of your income tax return.
My ex made us file taxes using "experts" for 17 years, even though I proved to her I could do it myself, and came up with the same numbers the "experts" did, because "they insure you if something goes wrong"
It's a scam. TurboTax, Jackson Hewitt, it's a scam
The government charges no fee to file.
However, until this year, lobbying has prevented the IRS from providing online services to help taxpayers fill out the forms or file directly, instead being required to outsource that and only expose a (wildly insecure btw) API for electronic filing.
Because the US tax code is also complicated as fuck and changes all the time, services like TurboTax exist and charge you to fill out the forms.
Repeat the above for each state you work / have income / own property in.
US citizen here. Used to file my own for free. At one point I bought a house and qualified for some tax credit so I paid an accountant to do my taxes that year to ensure I got everything right, bascially never went back becuase it was worth the $175 to litterally do nothing except mail my tax documents to an accountant.
It's the latter.
The short short version is that Intuit and H&R block make software to make filing taxes easier, market heavily and lobby heavily to prevent the IRS (which is itself a separate entity from the federal government whose sole customer is the federal government) from making similar software
For most people who have a job and rent the place they live they can fill out all of their taxes in just a couple of pages of forms (see the 1040EZ for example. Just punch in the info from the W2 your work gave you, some quick addition and subtraction then mail it off) and the IRS already knows most of the information, so it's already extremely easy, and if you own your home or want to take advantage of additional tax incentives it might be a bit more complicated. You can always download the forms and do it all manually, but tax software generally makes it easier
This is the best summary I could come up with:
The IRS will test a free tax filing service in 2024 for a subset of lucky taxpayers in as many as 13 states, the agency announced today.
The program is more or less a direct result of funding provided by the 2022 Inflation Reduction Act, through which $15 million was earmarked for the purpose of exploring and implementing a simple, free, government-provided tax filing service.
Over the last year and a half, the IRS has been building out the pilot program, which it characterizes as being “one more potential option” on the continuum from self-managed Free File, to commercial products like Turbotax, to a tax prep professional.
The IRS describes Direct File as “a mobile-friendly, interview-based service” available in English and Spanish, intended for people with simpler tax situations like W-2s and common income credits and deductions.
This will in turn “allow the IRS to evaluate the costs, benefits and operational challenges associated with providing a voluntary Direct File option to taxpayers.” In software terms, we’d probably call this an alpha.
Intuit and others which have surreptitiously fought against simple, free, and transparent tax filing for many years (as ProPublica documented not long ago) are no doubt seething and scheduling emergency meetings.
The original article contains 467 words, the summary contains 202 words. Saved 57%. I'm a bot and I'm open source!
LET'S FUCKING GOOOO
Wait, there was no direct tax filing?
You've always been able to file directly, but it involves paper forms not software that can guide you through the process and identify extra forms/deductions/additions that you might need to include.
This is a most excellent place for technology news and articles.
