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There Is A Tax Season Villain, and It's Not The IRS
Old 02-10-2024, 08:15 AM   #1
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There Is A Tax Season Villain, and It's Not The IRS

I've used TurboTax for years, and this doesn't surprise me but Intuit is much more of a villain than I realized. However, the complexity of the US tax code is just as much of a problem, and that's not the fault of Intuit or the IRS.

So many developed countries do citizens taxes for them, for free, and it's criminal that we're stuck with an unnecessarily expensive and cumbersome system. The power of special interests/campaign finance working against citizens once again...

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Old 02-10-2024, 09:06 AM   #2
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Yes. Our system is broken. Our politicians don't vote for our interests, but for their donors and their party.
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Old 02-10-2024, 09:29 AM   #3
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Like usual (yawn), when the government lets private companies do what it should be doing, those companies take advantage. Red light cameras, pay lanes on the highway, low priced Internet, and this one, a free tax filing option for lower income, simple income tax situations.

The video mixes the problem of a complicated tax system (the government's fault) with the problem that a private company, Intuit, used various marketing techniques and internet slight of hand to make it harder to find and use the "real" free filing site. Just like they're doing with free credit reports...if you don't "annualcreditreport.com", you're probably about to pay for a credit report, even if it says "FREE" a dozen times. But guess who's fault this one is. It's the government again.

I'm no apologist for Intuit, but they're just doing right by their shareholders. And this video makes it sound like they are the only player in the market. So a totally biased view that, IMO, servers the purpose to put wind in the sails of the movement to simplify tax filing. While that's a laudable goal, I find videos like this one, that paint with a broad brush and leave out important facts (presumably because people are too simple to understand a more nuanced situation) troubling. This is why institutions lost so much credibility during COVID times; we see through the tactics and know they're not telling the whole story. Now you wonder how many other narratives have been similarly constructed.
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Old 02-10-2024, 02:03 PM   #4
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One could almost use the same analogy between Medicare (government) and insurance companies offering Medicare Advantage and Medicare Supplemental plans. As long as there is a profit motive, the private sector will always keep it so convoluted as to where it will never change.

There is no reason taxes or health care to be so complicated and confusing.
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Old 02-10-2024, 02:27 PM   #5
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In the video, not a single mention of HRBlock (formerly TaxCut), which I’ve been using for 30 years to file my taxes and typically costs 1/2 the price of TurboTax
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Old 02-10-2024, 03:17 PM   #6
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The standard deduction is so high, taxes for a great number of people are just not that complicated or hard. At the low end of the income strata, they can get. their taxes do for free. Up a notch, and you indeed can use a free Turbo Tax program. Beyond that, there's a large middle that use tools like Turbo Tax for convenience. I mean who wants to file by hand (get forms, check math, mail in, wait for refund). After that, is a pretty high strata that now businesses, have significant investments and either need a tax program or have someone do it for them. Ultimately, I just don't see filing taxes as a great burden or cost for most people.

Having said that, I do think the government should have a basic program for people with simple returns to just go online and input a few numbers and other basic data and be done. I filed a simple Pennsylvania return for a friend and their form is online, simple and all automated. There's no reason the Federal government can't do the same.


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Originally Posted by Al18 View Post
In the video, not a single mention of HRBlock (formerly TaxCut), which I’ve been using for 30 years to file my taxes and typically costs 1/2 the price of TurboTax
Also no mention of the walk in tax preparer industry. It's disgraceful what they charge for simple returns. And their loans on the refunds take advantage of people already struggling - great business model.

Overall, TT and H&R Block are a pretty good deal, especially if you follow our forum and get them on sale.
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Old 02-10-2024, 03:51 PM   #7
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Quote:
Originally Posted by Jerry1 View Post

Also no mention of the walk in tax preparer industry. It's disgraceful what they charge for simple returns. And their loans on the refunds take advantage of people already struggling - great business model.
There is a big component to this most people don't understand or consider. The walk in tax industry makes a killing doing advance loans and tax returns for those earning refundable credits, EIC tax, additional child tax credit, etc. Yes, this is money out of their pockets but also John Q. Public's as well. When I did taxes for HRB in one of the busiest offices in Chattanooga it was routine during our peak season to do a tax return for a young couple or head of household with numerous children who qualified for an $8-10K in a refund, charge three or four hundred dollars for the return and then charge fifty bucks for an administration fee and 36% APR for the advance until the HRB got the refund. Not to mention pushing their "Peace of Mind Guarantee" for another $36. I always made sure I explained exactly what it was costing the customer but their response usually was, I need the money. Quit after five years and did VITA volunteer work.
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Old 02-10-2024, 03:57 PM   #8
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Oh on the simple one W-2 returns, HRB use to advertise a free return. The catch was if there was any type of 401K contribution or other box marked, it would trigger the basic return cost plus additional for the box marked, not to mention encouraging the preparers to upsell the peace of mind guarantee. Helluva a racket and business model.
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