[brocklobsta]

What I don't understand about these programs is the added income clause. In California the state provides a free tool to file state income taxes (CalFile), but you can't use it if you make over $230,000 a year. Does it really make sense? It's similar with the federal free file program I believe.

You would think they would want to encourage high income citizens to use their tool so they can control the deductions/credits/process.

[junar]

If you're curious why, it's because of the California itemized deduction phase-out, line 29 in the instructions below [1].

CalFile only cares about handling "simple" items. Other notable exclusions [2] are capital gains, health savings accounts, Schedule C, Schedule E, and Roth IRA conversions and distributions.

[1] https://www.ftb.ca.gov/forms/2022/2022-540-ca-instructions.h...

[2] https://www.ftb.ca.gov/file/ways-to-file/online/calfile/calf...

[Rebelgecko]

FWIW I've used calfile with capital gains and it worked fine, I was able to file properly and it gave me the same numeric results as TurboTax. HSA gains/dividends can also go in with your regular income, since California doesn't recognize them with any sort of special tax treatment.

One of the calfile devs shows up on HN every once in a while. I got the feeling that the real impediments were more bureaucratic than on the technical or accounting side of things.

[gowld]

What if I earn >$229,908 but don't want to itemize? (or "do"; that web page is unreadable)

[AlexandrB]

American legislators seem to loooove "means testing" every government-provided service. Maybe it's a misguided version of that?

[brocklobsta]

Agreed, but I don't see this as a service as much as a tool to perform a mandatory task. I don't WANT to do my taxes, I am forced to. At least don't deny me a tool because I pay the government a higher share of my income.

[mountainofdeath]

It's probably more-so that above a certain income threshold, your tax return becomes exponentially more complex.

Free-file is useful when all you have is 1-2 above-board wage earning jobs, maybe with a 1099 contract job where the employer is nice nice enough to pre-fill the form out for you.

Once you start dealing with non-trivial amounts of dividends, interest, securities, partnerships, real-estate, you really do need a professional to keep things organized.

[brocklobsta]

I get that, but why use income as a proxy for complex tax items? A W2 that takes home 400k using standard deduction for example is easier than someone self employed with several deductions that makes 100k.

[runako]

> above a certain income threshold, your tax return becomes exponentially more complex

For some people. A person working a single job as a programmer earning $300k in straight W-2 income (no RSUs, etc.) does not have more complex taxes than a person earning $100k from a combination of their podcast + a few rental properties. There's no logic to means-testing this kind of service, where there would be for feature-testing (i.e. "Does all your income come from your job?").

[whimsicalism]

RSUs don't really complicate anything, they are straight W-2 income.

[astrange]

If you sell them it gets more complicated because your broker is for some reason forbidden from reporting the correct cost basis even though they know it.

[whimsicalism]

I make a lot more than that, but as long as I remain a simple W2 earner it is still ridiculously easy to file taxes and I shouldn't be charged extra for it.

[pwg]

> What I don't understand about these programs is the added income clause.

Lobbying by the "big tax preparers". Higher income individuals are more likely to have more complex returns and/or be more willing to part with $149.99 to TurboTax to do their taxes. TurboTax (and others like them) don't want to miss out on that gravy train by letting the IRS let those folks file for free.

[mattlondon]

In the UK you don't have to file at if your income is under £100,000 (assuming you are employed by a company that does PAYE (pay as you earn) - i.e. tax is deducted automatically from your payslip - and you don't have any other sources of income which is probably 99% of people) - after 100k you have to file electronically (although someone can do this on your behalf - I don't think postal filing is possible any more).

For what it is worth, the UK online filing is actually pretty good these days. Modern UI, and the process is tailored via a few "wizard" type questions initially so you are only shown the bits you need to fill. It can get a bit confusing at times though just due to the tax laws themselves and the terminology etc, but the system for filing itself is pretty good.

Thanks to onyone on here (and I bet you are on here!) who is working on the gov.uk stuff - it is generally pretty good.

[philjohn]

The one thing missing is automatically calculating your tapered pension allowance after rolling over unused, based on your previous tax years - that's why I get an accountant to file mine.

[davchana]

Plus also if you have any moving expenses (moving 50 miles away because of job, permanently).