IRS Pushed to Offer Free Online Tax Filing

[cathy63]

... If they have all the information, why are they making me corroborate what they have? ... They already know what I owe, so why bother going through the hoops? The only variables are your deductions, so, just send in your deductions on a form and let them do the math!

The IRS largely know your income...

But they could send you the basics, and then ask if you accept it, or want to add deductible expenses (I think there were earlier posts saying this is what some countries do)...

...if that populates with what they have and all I need to do is a quick stare and compare, it will save me time and mistakes...

I don't think the IRS actually knows your individual info early enough in the tax filing season to be able to create a partial return for you. Payroll tax returns filed throughout the year don't show individual employee SSNs, just an aggregate total for the employer. I'm not sure about other types of withholding, such as from pensions and IRAs, but I assume it's the same (which would explain why the loophole of doing all your withholding via an IRA withdrawal in December works).

The IRS does get W-2s at the same time the taxpayers do, but most 1099s don't have to be filed with them until March 31. Then after the IRS gets all these forms, it takes about 8 weeks before they have it sorted by taxpayer so it can be used to prepare a return. I just tried to pull a wage & income transcript for myself for 2022 and it's not ready yet, so I'd still be waiting if I were relying on the IRS to do my tax return for me.

It seems like if we want the IRS to prepare the income portion of returns, Congress would either have to change a lot of other processes and forms, or change the filing season so it starts in June instead of February.

 

[misanman]

I have used the free Turbotax from Fidelity for years and plan to continue, assuming they continue with the program.

 

[skyking1]

I don't think the IRS actually knows your individual info early enough in the tax filing season to be able to create a partial return for you. Payroll tax returns filed throughout the year don't show individual employee SSNs, just an aggregate total for the employer. I'm not sure about other types of withholding, such as from pensions and IRAs, but I assume it's the same (which would explain why the loophole of doing all your withholding via an IRA withdrawal in December works).

The IRS does get W-2s at the same time the taxpayers do, but most 1099s don't have to be filed with them until March 31. Then after the IRS gets all these forms, it takes about 8 weeks before they have it sorted by taxpayer so it can be used to prepare a return. I just tried to pull a wage & income transcript for myself for 2022 and it's not ready yet, so I'd still be waiting if I were relying on the IRS to do my tax return for me.

It seems like if we want the IRS to prepare the income portion of returns, Congress would either have to change a lot of other processes and forms, or change the filing season so it starts in June instead of February.

I've made dyslexic mistakes on a pile of w-2's and have them reject the E-filing. I do file later in the season though.
Once I found my booboo and corrected the W-2 the return was accepted.

 

[orbops]

TurboTax is a total rip-off. We qualified to use their Free File program a few years ago, but because we have self employed income and brokerage transactions, it switched us to the premium package and charged us $150 for the federal return. After complaining, they offered to refund half the cost - and I stopped using TurboTax after that.

I hope the IRS free tax option kills TurboTax's business since they now exited being part of the Free File program.

 

[brett]

Not interested in any 'on line' tax prep. Government supplied or otherwise.

I want to download a program, then efile my return. I keep all the data, the input etc for future use, whatifs for next year...whatever. Plus a good backup.

 

[RetireBy90]

Not interested in any 'on line' tax prep. Government supplied or otherwise.

I want to download a program, then efile my return. I keep all the data, the input etc for future use, whatifs for next year...whatever. Plus a good backup.

I have always said I didn’t want my financial data “out there” accordingly never even considered online tax prep. However a smart person suggested if you E-File your data is still “out there”.
Still, I’ll spend $50 or so for TT and prepare on my PC. Like you said, I keep the backups and can go back as far as needed. I do wish current year TT would allow you to open previous years returns. I seem to remember not being able to do that and had to dig out old CD, install previous application to print a form I had deselected when printing.

 

[rk911]

...They already know what I owe, so why bother going through the hoops? The only variables are your deductions, so, just send in your deductions on a form and let them do the math!

This presumes ome has trust in the IRS specifically and the feds in general. Many do not.

About 15-yrs ago when my MIL was alive both she and us had accounts at Vanguard. Not sure which made the error...the IRS or VG, but the IRS was dunning us for underpayment and interest for failure to report income from MIL's VG account. It all got straightened out but I would hate to depend on fhe IRS to know what we earn and owe.

 

[RetireBy90]

This presumes ome has trust in the IRS specifically and the feds in general. Many do not.

About 15-yrs ago when my MIL was alive both she and us had accounts at Vanguard. Not sure which made the error...the IRS or VG, but the IRS was dunning us for underpayment and interest for failure to report income from MIL's VG account. It all got straightened out but I would hate to depend on fhe IRS to know what we earn and owe.

Trying to not be political here admins

My experience with IRS agents that didn’t know military could contribute to an IRA and audited me for it, I also lack any confidence they would get it right and then it would be on me to prove them wrong.

 

[ncbill]

TurboTax is a total rip-off. We qualified to use their Free File program a few years ago, but because we have self employed income and brokerage transactions, it switched us to the premium package and charged us $150 for the federal return. After complaining, they offered to refund half the cost - and I stopped using TurboTax after that.

I hope the IRS free tax option kills TurboTax's business since they now exited being part of the Free File program.

that is why I don't understand why people use the web version.

when it is much cheaper to buy the downloadable version.

no worries about a "bait & switch" with the latter.

and you aren't leaving your personal information on TurboTax's servers.