[motbob]

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).

[kleer001]

> 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

[motbob]

Maybe it's "bull pucky" to you, but I have vivid memories of my parents agonizing over taxes as a child. The agony they went through is much ameliorated now due to advances in technology.

And thank you for the link, but this news segment basically is big on opinion, low on specifics. Feel free to link me to a detailed article on how non-U.S. countries handle self-employment or dependent tax issues and whether/how those things are easier elsewhere.

[chrisseaton]

Most importantly, most countries do it by simply having much higher thresholds for complicated tax rules applying to you.

In the UK quite a few people don't pay any tax at all, and the vast majority don't pay enough tax to have to file any return.

What impact does a dependent have on your tax that needs to make it so complicated? I have relatively complicated taxes due to two jobs and some unusual deductions, but having a child doesn't really have any impact on my tax return in the UK.

[motbob]

Well, if you are a simple family where everyone is biologically related and living together, then things are pretty simple in the end. The issues come up with mixed families, divorced parents, etc.

As for the dollar values, if you make $30,000 and have 2 kids, you can usually get a $6,000 tax credit or more. The U.S.'s support for working low-income families is carried out through the tax system. Put another way, tax credits are one of the U.S.'s most important social safety nets.

[mixmastamyk]

Not a problem, you enter dependents into the wizard, and take them out when/if they move out.

No matter the situation, they accept your word for it. If an audit occurs you will have to prove things with documentation and be held liable for mistakes or fraud.

It's basically a five-minute task that you appear to believe should make tax filing take hours?

I did taxes once in NZ, you go to a website where they have all the data ready. Then you go next, next, finish, adding a deduction or dependent here and there. Takes 15-30 mins.

[bluGill]

Children are hard if the parents are separated. You get child support to figure out. And who gets what share of the tax credit is tricky as well. (This is one way for one parent to abuse the other - file fast and claim all the credits, whoever files second now has to prove the first did the wrong thing at their expense)

[RankingMember]

A task being easier than it used to be doesn't mean that task's process shouldn't be improved or that its existence shouldn't be questioned altogether as a matter of course.

[motbob]

True. But I think progress over the years is a better metric for whether things are in a good place, policy-wise, than "some other country does things better." So I'm not grumpy about the state of the U.S.'s internet infrastructure, but I am grumpy about the state of the U.S. health care system (for example).

[kleer001]

> Maybe it's "bull pucky" to you

and a lot of other people too

> big on opinion

&

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

Sounds like the whole discussion is rife with opinion.

BTW, you have my sympathy, but your story doesn't shore up your argument. It only sounds like tax filing in the States has gotten better. And better locally is not best globally, by a long shot.

In general the States has been shot through for so long with so much corruption (aka special interests and campaign contributions and lobbying) that the citizenry has a perversely skewed idea of what is normal. /rant

[aksss]

True that the US tax system used to be a lot worse and a lot more vindictive. See the hearings during the nineties that led to IRS reform. Horror story after horror story.

But that doesn’t mean it’s a great system now. I would favor dropping exemptions and moving to a lower flat tax, for instance - taxes by postcard. Probably never that way for businesses, but for 9-5ers, it should be way more straight forward than it is now.

[bluGill]

Taxes when you were a kid were probably a lot harder than they are now. There are not nearly as many deductions to try to figure out.

[RC_ITR]

Sure, but that would require a significant shift away from our current deduction-based approach.

Good luck prying that out of the cold dead hands of boomers (and eventually Gen X)

[bluGill]

A large part of it has been. The standard deduction is high enough now that most people can't take advantage of the deduction based approach. Of course most tax people will tell you to save all receipts, they will happily charge you to look through them and calculate that they are not big enough to matter. If people knew how simple their taxes really were most people wouldn't be willing to pay as much for it.

[RC_ITR]

That ignores the effect of wealth inequality in the US. You may not know a lot of people who itemize, but our elite / political class does at almost a 100% rate.

So long as they want / use it, it will 'trickle down' to others.

https://www.taxpolicycenter.org/briefing-book/what-are-itemi....

[ghaff]

I've itemized the past couple of years for various reasons and I have some other complexities. But, yeah, most people--especially if they don't have a mortgage--are just going to take the standard deduction.

[jorblumesea]

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...

[djrogers]

Yes, those docs are filed with the IRS, but charitable contributions, child status (are they dependents or not this year?), expenses (home office, side hustle, property management etc), and many other things aren't.

If all your tax returns reference are the handful of items you mention, your tax return can be done in a matter of minutes on a short form.

Yes, it could be better, but it's a fantasy to think it should be as simple as getting a bill from the IRS at the end of the year.

[jorblumesea]

These are easily done and in other countries, are fairly simple. Sure it turns your 10 minute tax affair into a 25 minute one. Declaring child status is just a simple form box. Declaring "side hustle" money is a similar affair. Charitable contributions just register with the IRS instead of it going directly to you like a 1099 or W2.

It's still a far cry from the "entire Saturday morning" affair, even using online tax software.

[chrisseaton]

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!

[compiler-guy]

They don't already know. Sometimes they have suspicions, and then perform an audit, or request more information about a particular detail, by which they get the information they might need.

Only then do they actually know.

For example, you yourself may have filed with the status, "Married, filing separately", but the other person in your relationship may have filed with the status, "Single".

The IRS has no idea who is right without actually talking to the two of you. And because they don't know which status is correct, they don't know how much each of you owe.

[mixmastamyk]

They do know almost everything and learning more every day. Of course there are extenuating circumstances, which you will list and have to prove if a question comes up. This is not an excuse for tax filing being more difficult than it needs to be.

[compiler-guy]

The great-grandparent's claim is that they already know. They don't already know. I can list two dozen things off the top of my head that they don't already know.

Should tax filing be easier? Sure. But, "They already know how much you owe." is patently false.

[mixmastamyk]

It's an approximation, and they will come looking for it if you don't file. So yes, it does have some level of truth (and force) behind it.

[runako]

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?

[ghaff]

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

This used to be a real nightmare especially when there were acquisitions in stock, splits, etc. There were a couple times over the years when I just said F' it and put down a reasonable number.

But these days, unless you have some pretty old investments, the brokerages generally track your basis.

[runako]

> the brokerages generally track your basis.

Yes, but IIRC if you transfer investments between brokers you are back to tracking basis yourself (if you're lucky, the new broker will allow you to enter the basis after the transfer).

But agree in the general case that it's not a problem for younger people. (Gen X and older may indeed have some of those pretty old investments lurking in their portfolios.)

[ghaff]

That's not universally the case at least. I transferred some shares a month or so ago (in a horribly manual process I might add) and the cost basis was transferred over.

I fall into the older bucket but I guess my old 401(K) must have had basis added when it merged with an IRA and none of my other investments lack basis information.

[realityking]

Adding a perspective from Germany, where the tax code is definitely not simple, a major difference I see is that filing is optional for the simple cases because you can only ever get money back. There are some default deductibles already applied to your payroll tax so the tax office doesn't have to deal with super small cases. The big advantage is that Joe Average won't risk getting into a lot of trouble for not filing.

Just to illustrate, let's go through your examples and how it'd work in Germany:

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

You'll have to mandatory file income taxes since the income from contracting is not salary and there are no payroll taxes deducted from it. Not sure how common it is in the US but in Germany the vast majority of people don't have side hustles like this (for a variety of reasons; certainly a bad thing)

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

There's a default tax rate on capital gains (25%) with a 800€ allowance. You assign how you want to split the allowance between your various banks and other capital gains generating accounts (you're responsibility to not exceed them) and the banks will report your cap gains with your tax ID to the tax office. If you did pay taxes it's often worth filing to make sure the allowance evens out. Also, if you want to carry forward a loss you have to file (but you got 5 years to do so)

> home improvements eligible for tax deductions

You'll probably want to file but you don't _have to_. You just won't get the deduction.

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

If it was the home you lived in, you don't have to file (it's tax free). If it was a house you rented you'll have to file but you'll have to do that anyway for the rental income.

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

Same as with the other deductions, it's in your best interest to file but you don't have to. No (legal) consequences if you don't.

> crypto gains/losses

This gets tricky but if you owned the coins for more than a year (to the day) they're tax free and you don't have to report them. But you better have documentation on this if you ever get audited.

> inheritances (basis again)

This one is actually interesting as it's a completely separate tax and thus separate process from income tax. There's an allowance based on your relationship to the deceased (500k€ for spouses, 400k€ for children, etc.), if the inheritance exceeds that you'll get a letter from the tax office asking you to file a declaration for inheritance tax. At that point there's not much software that'll help you and you'll better hire a tax advisor :)

[runako]

Really educational comparison!

It seems the major difference derives from our (American) punitive approach to those who use our meager social safety net.

For example a large swath of Americans earn an income that entitles them to assistance in the form of the Earned Income Tax Credit (EITC). This is (roughly, it depends) available to people who earn < 85% of the median income. But they have to file taxes to get the money they are owed (because we hate the poor in America and this will dissuade them from getting their money). So that's going to be a large set of the country that has to apply or leave money on the table.

For a large set in the middle class, you have to file because you leave money on the table by not claiming deductions.

So even if we weren't all more or less required by law to file, we would mostly have a financial incentives to file anyway.

Oh and anecdotally, side-hustles and second jobs are very common in the US. Poor social safety net, no employment contracts, very low minimum wage, high healthcare costs all doom most Americans to perpetually precarious financial circumstances. So everybody is trying to get a little more so they don't get wiped out.

[ghaff]

>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.

[namdnay]

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