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IRS Online Tax Utility (FREE) Bill

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#1

A NEW BILL
A FREE online utility to "Do Taxes"

  • Electronic services treated as supplemental

  • There shall be a IRS Chief Information Officer responsible for the development, implementation, maintenance, security, integrity of IT

  • Not later than January 1, 2023, the Secretary of the Treasury shall make available an Internet website like Social Security -a basic, online electronic fillable forms utility (work cooperatively with States)

  • Secretary shall verify the identity of any individual opening an e-Services account with the IRS.

If Tax returns filed electronically, the IP address, device identification, email domain name, speed of completion, method of authentication, refund method, and such other return information reported back to participants/delegates

  • information sharing and analysis center to centralize, standardize, and enhance data compilation and analysis for matrices


Full:

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#2

You got sucked in by the name and summary too. Yeah, pretty deceptive. What that bill actually does is protect Turbotax’s business model.

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#3

What? How? Please tell more

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#4

What? How?

Please Tell More…

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#5

“protect Turbotax’s business model” by providing a free basic replacement?
Please explain

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#6

It’s only available to the lowest 70% of earners? Why?

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#7

Tax prep software has been free for the lowest 70% of earners for years. I think the cutoff is like $66k/yr. That is not new. Only why is because that’s what the old law says to do.

Most people don’t know about this, so only 3% of the population takes advantage of it.

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#8

I certainly didn’t know about it! Where can it be found?

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#9

Alright. Your friendly neighborhood tax professional here.

I saw nowhere in this bill any form of allowing one to “do taxes”. I did see a new thing to add the ability to file the 1099 forms. These are NOT form 1040s.

Generally when they say form 1099 they are talking about the 1099-MISC form more specifically which is used to report:

  • Rents
  • Royalties
  • Other Income
  • Federal Tax Withheld
  • Fishing boat proceeds
  • Medical and Healthcare payments
  • Non-employee compensation (by far the most common reason one would receive one of these forms)
  • Substitute payments
  • Crop insurance proceeds
  • Excess golden parachute
  • Gross attorney proceeds (and taxable portion of these)
  • Section 409a deferrals
  • Section 409a income

So, what that portion of the bill is allowing people to do is, for people who need to file a 1099 for anyone who would be receiving a 1099 (for example a non-employee who earned more than $600 would receive one). It eliminates the need to go to a tax professional and gives an easier to use option for the IRS to handle mailing out the form it seems.

Also, as @Ruffalo has already stated, the IRS already has an option online for this called IRS free file, and it is available to most people. Granted, I always advocate to coming to someone like me (a good tax preparer with reasonable prices… like for most of your guys’ returns I’d only charge about $50 (and yes, that is federal and state) ) for a plethora of reasons that are off topic for this thread.

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#10

I don’t know that most people making <$66k/yr need an accountant, as they tend not to have investments beyond a retirement fund, own their own business, or itemize (particularly now that the standard deduction is doubled) and many don’t own their homes, but it’s certainly a good option. Turbotax and the like are very easy to use but it can still be scary to do your own taxes. Paying someone to do it for you offers peace of mind.

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#11

Not american and will not claim to know anything about tax systems but I have read the same thing as @Ruffalo soldier. It made it to UK websites complete with scary click bait headlines, though they do it out of fun and the content it there.

https://www.theregister.co.uk/2019/04/09/no_free_irs_tax/

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#12

This is false. Almost all of my business clients (I have a couple hundred) have less than $66k/yr, not including Rentals or Farms (which for my clients generally show a loss more often than not). I will give you the itemizing thing though. Generally if you’re itemizing this year it’s only on state rather than federal because of not only the standard deduction change, but also the capping of taxes that you pay (state income tax withheld or sales tax and property taxes) at 10k for all filing statuses.

Also, when your income is low enough you have access to earned income credit which is a pain in the ass. Also depending on living circumstances, if there are dependents involved it gets extremely complicated as to who should/can claim said dependents in order to comply with the law first and then maximize the refund if we find we can play around with them. Additionally, if you have a working child we generally do their taxes as well so they don’t go online and screw up the parents’ return by claiming themselves if they are their parents’ dependent. Among a bunch of other factors.

Income =/= difficulty in tax return. My wealthiest clients I’ve done this year have one of the simplest returns, while another couple showed under 30k of income and it took me hours just with the sheer amount of stock sales they had (day trading…).

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#13

taxation is theft… dont be coerced into paying…

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#14

I have to do schedule c. Of I went with TurboTax, it would be $130 just to be able to pay more to the government

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#15

The free tax prep thing recently made the news. Turbotax and others make it REALLY hard to find. It’s a classic dark pattern.

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#16

Follow-up, they use robots.txt to stop search engines from indexing the page!

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#17

How else are they gonna sell your finance data… :slight_smile:

It should be illegal for anything that is mandated. There should be a free and easy way to do it without getting data mined by commercial interests.

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#18

They can’t sell data on your taxes unless you opt-in. They do ask if you want to “share your information”, so just go with nope. That isn’t what this is about, it’s about getting people to pay $40 every year when they could have filed for free.

The free file alliance stuff is free for the bottom 70% of earners in the United States. Cutoff is $66k/year.

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#19

one … they did not trick anyone…

Two… they did make it harder to get at… in a way. It is still part of their service. You did just give away you personal finances to be bought and sold on the open market.

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#20

Of course they tricked people. If you somehow heard about the FFA and wanted to file your taxes for free, they made it very difficult to find.

And again, you have to opt-in to data sharing. Just don’t opt-in. I don’t even think that’s unethical, opt-out would have been unethical.

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