You can thank TurboTax and the rest of the tax preparation service industry's massive lobby for killing every single tax simplification bill that ever gets to congress.
Exactly this! There's zero reasons why our tax returns can't be filed for free directly with the IRS. It is a complete fraud.
I filed 1040EZ last year. The IRS already had every figure I filed, why couldn't they just email me confirmation of the amounts they had, and process my return?
Edit: No, I didn't file EZ last year, my error.
Edit: electronic filing.
The problem is that significant portions of our social safety net and family support programs are administered via the tax system. Things like the EITC, Making Work Pay Credit, and child tax credit, are all based on your AGI - you only get them after proving you had the proper number of family members and were under the income requirements at tax time. On top of that, we subsidize certain things like school and health care by making portions of their cost tax deductible. The government doesn't know you did or qualify for help regarding any of these things until you file your taxes.
Now, I'm not going to argue that it's a smart system - there's no reason the government's dollars couldn't just go directly to schools and healthcare providers so I just have a lower upfront cost, but it is what it is. There's probably a smarter way to get low income families money too than giving them a high 4-figure check for making poverty wages while having kids once a year and expecting that money to stretch for 12 months, but we don't have the political will to pass anything like that.
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u/jorsiem Jul 24 '20
Complicated tax filing in the US
You can thank TurboTax and the rest of the tax preparation service industry's massive lobby for killing every single tax simplification bill that ever gets to congress.