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View Poll Results: Would you use IRS option to prepare your taxes ?
Use IRS option 41 48.24%
Continue to prepare myself 35 41.18%
Continue to use a pro 9 10.59%
I don't pay taxes 0 0%
Voters: 85. You may not vote on this poll

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Old 05-18-2023, 05:57 AM   #41
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They gotta spend that new budget somewhere, right? Government getting bigger is problematic, imo. Simplification of the system is the way to reduce costs, not this.

I'll try it, but I don't expect the first year to be "easy"... Like buying a new model car the first year.
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Old 05-18-2023, 07:50 AM   #42
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So, you spend your time and a few bucks doing your taxes via TT.

Later (maybe) the IRS comes back and says "no, you made a mistake, etc etc, our records show XYZ" or whatever. If they have all the information, why are they making me corroborate what they have?

I wonder what percentage of 'mistakes' does the IRS say "Oh, you're right, never mind" vs someone losing their case.

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!
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Old 05-18-2023, 08:24 AM   #43
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Too many bugs that don't get fixed in the commercial tax software packages. I grew tired of switching from package to package year after year to find one that prepares a correct return.

This past year I went with IRS https://www.freefilefillableforms.com/
It allows you to efile for free, but you have to do all the calculations (except for the simple arithmetic) yourself.

My approach was to use a commerical package to take my first shot at it, and then enter the results in freefilefillableforms.com (adjusting for the bugs of course).

Much less stressfull knowing that I have a path forward to complete the taxes without trying to do workarounds or switching packages anymore.

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Old 05-18-2023, 08:33 AM   #44
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That report is interesting. They have apparently already built a functioning prototype system that allows non-programmers to configure the workflow for simple tax returns.

My own experience in software engineering and government contracting tells me they are underestimating the costs though. They think they can implement the VITA scope* and serve 25M people for $221M per year, but implementing something like TCJA (or its provisions ending in 2026) is going to blow that right out of the water. Not to mention all the mid-year changes we dealt with during the pandemic that couldn't be planned and budgeted for; even the mileage rate changed in the middle of 2022 requiring double entries.

*VITA scope can be found on pages 6-20 of pub 4012 here: https://www.irs.gov/pub/irs-pdf/p4012.pdf
Interesting and informative link, thanks for posting it. If all that - the VITA scope - is the objective of this IRS initiative I think you have a valid concern. I hope they narrow down the scope, at least for the first phase.
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Old 05-18-2023, 08:35 AM   #45
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So, you spend your time and a few bucks doing your taxes via TT.

Later (maybe) the IRS comes back and says "no, you made a mistake, etc etc, our records show XYZ" or whatever. If they have all the information, why are they making me corroborate what they have?

I wonder what percentage of 'mistakes' does the IRS say "Oh, you're right, never mind" vs someone losing their case.

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, they don't know your expenses, deductions, adjustments (well some), or many of the credits you may be eligible for. You must supply that information. A couple of years ago they wanted to know why I did not report 529 plan earnings or eligibly for education tax credits. Had two sons in college, book expenses, apartment rental expenses, etc. Wrote a one page summary detailing the eligible 529 income, expenses, AOTC eligible expenses, reconciling all.
About 6 months later I received a letter saying all good, thanks.

Providing this information is exactly what you do when you file your own tax return. Oh, and the IRS probably doesn't know that your grandson lived with you for seven moths and you had daycare expenses last year!
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Old 05-18-2023, 08:41 AM   #46
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Later (maybe) the IRS comes back and says "no, you made a mistake, etc etc, our records show XYZ" or whatever. If they have all the information, why are they making me corroborate what they have?

I wonder what percentage of 'mistakes' does the IRS say "Oh, you're right, never mind" vs someone losing their case.
I'd be curious too. Purely anecdotal but the IRS has told me I was wrong twice (in 50 years), and both times they ultimately tacitly agreed they were wrong. They were wrong in 2019 and 2022...so maybe their error rate has worsened in the past few years? Would stand to reason as they are historically understaffed.
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Old 05-18-2023, 08:56 AM   #47
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The IRS largely know your income, they don't know your expenses, deductions, adjustments (well some), or many of the credits you may be eligible for. You must supply that information. A couple of years ago they wanted to know why I did not report 529 plan earnings or eligibly for education tax credits. Had two sons in college, book expenses, apartment rental expenses, etc. Wrote a one page summary detailing the eligible 529 income, expenses, AOTC eligible expenses, reconciling all.
About 6 months later I received a letter saying all good, thanks.

Providing this information is exactly what you do when you file your own tax return. Oh, and the IRS probably doesn't know that your grandson lived with you for seven moths and you had daycare expenses last year!
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).

A lot fewer people itemize with the higher exemption and SALT limitations. I don't. The IRS knows everything I enter already, they got copies of it all. Some of it is from them (the stimulus checks).

PS: "A lot fewer" sure seems awkward wording, not sure how to say that better in an informal context.

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Old 05-18-2023, 09:42 AM   #48
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Purely anecdotal but the IRS has told me I was wrong twice (in 50 years), and both times they ultimately tacitly agreed they were wrong.
By coincidence, I've had exactly the same experience. Two "letter audits" and in both cases they had gotten it wrong. No harm, no foul.
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Old 05-18-2023, 12:11 PM   #49
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By coincidence, I've had exactly the same experience. Two "letter audits" and in both cases they had gotten it wrong. No harm, no foul.
Two here as well, one I explained away and the other I sent a small check. I'm waiting for two more where I know I missed something small, one from 2019 and one from 2020.
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Old 05-18-2023, 12:17 PM   #50
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I have used the free fillable tax forms from the IRS for years. One year I underpaid and they sent me a bill, this year I used the wrong rate on some capital gains and overpaid, and they sent me a check.
A great deal of the time was plugging in our W-2's and INTs and what have you. 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 can dyslexify anything.
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Old 05-18-2023, 05:21 PM   #51
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... 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!
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The IRS largely know your income...
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Originally Posted by ERD50 View Post
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)...
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Originally Posted by skyking1 View Post
...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.
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Old 05-19-2023, 05:36 AM   #52
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I have used the free Turbotax from Fidelity for years and plan to continue, assuming they continue with the program.
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Old 05-19-2023, 07:33 AM   #53
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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.
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Old 05-23-2023, 04:27 PM   #54
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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.
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Old 05-23-2023, 04:44 PM   #55
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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.
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Old 05-23-2023, 05:00 PM   #56
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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.
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Old 05-23-2023, 05:20 PM   #57
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...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.
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Old 05-23-2023, 05:59 PM   #58
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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.
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Old 05-23-2023, 08:43 PM   #59
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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.
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