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Tax Time Again: Any Linux Solutions?
vettemph writes "As a Linux user, I've used Intuit's Turbo Tax On The Web in the past, but I don't like paying someone $20 to $30 to submit my forms. For the last few years I've been filling out the forms by hand and mailing them for $0.37 instead. Call me cheap. The IRS has a target of 80% of all taxpayers using e-file in the near future. Does anyone know where the 'free and open' solution is? Do we need to petition the IRS? Currently the IRS seems to be protecting their 'approved e-file partners'' profit margins in the name of a security layer. (I call shenanigans!)" So how will you be doing this year's taxes? I'd settle for a good PDF editor to neatly complete the IRS's PDF forms.
I just use the fillable PDFs that are available on the web site.
The IRS has a Free File program that a number of companies provide assuming you don't have any "special cases", that is to say, can use the basic 1040 -- don't own a business, take standard deduction, etc. I've found (whodathunkit) H&R Block's Free File program to be quite good. I did my taxes in my lunchbreak and got my refund the next week.
I forgot where I read it, but on the 14th on the http://www.irs.gov/ they will post a full list of where you can file an electronic return for free.
I'll take a break from Linux and boot into WinXP Home (which I bought a $89 OEM license for). I'll buy a copy of Turbo Tax from Walmart for $30 bucks and submit my return online.
It's not all or nothing. Windows is great for stuff like this. Don't let your ideology get in the way of cheap, efficient, widely avaiable software that'll make your life easier.
Several companies have web-based tax software: there is no software to install, they have all the forms, you get a PDF, and they can also submit it for you. I used one of them last year with Linux and Firefox and it worked like a charm. The refunds arrived very quickly, too.
:-)
Installable tax software is so 20th century
Lots of folks are eligilbe for free filing using web based tools. It was quick and easy for me last year.
h tml
http://www.irs.gov/efile/article/0,,id=118986,00.
I use TeleFile to do my taxes. I call a 1-800 number and it's free.
All my earnings are reported, all my tax breaks pre-calculculated, interest reported by the banks. Only thing I have to add are tax deductible donations like Red Cross stuff.
Takes me about 15 seconds to do my taxes.
I have NO privacy in my life, but it sure is easy.
... I can say "yay, we've got something better!"
My little corner of Europe (Portugal) actually has a good e-tax delivery system: since last year, they have a Java application (which works beautifully in Linux, FreeBSD, and OSX) freely available for download on their site. It's as easy as:
1) Download and run the app
2) Fill the nice, easy-to-understand forms
3) Hit the "Check" button, and if all goes well, "Calculate", and "Save".
4) Get the resulting file, submit it through their website
5) Profit!
Zero cost, and very low margin for error. And the cherry on top is: e-submissions have a larger deadline than dead-tree submissions. After they validate everything on their end, you get an official-looking confirmation note in regular mail, and you're done.
Then it's probably a very cosy relationship between the tax accounting software companies and the Inland Revenue Service. They pay ahem ... "subscription charges" for the documentation and specifications, the tax accounting software companies get to call their software "fully IR/IRS compliant".
Is it time to blow the whistle on the scam by asking for specs without the fees? Damn right it is. Will they listen? Not unless you can get some mainstream media behind you.
"It's not your information. It's information about you" - John Ford, Vice President, Equifax
H&R Block IRS Free File - Online Tax Programs - "FREE online federal tax prep and e-file for filers with AGI of $34,000 or less." They also have a few relatively inexpensive options if you don't quite qualify for that. I've used the free option for the past few years and it works great. (Even handles some of the non-standard stuff.)
If your taxes are more complex maybe TaxAct will fit the bill. I've used TaxAct a few times, and they were OK. You can do everything on the web and download a finished PDF of the forms. The downside is that it's slow to do it that way. You can also download some software from them to save your data locally, but it's windows only.
I've used Turbo Tax for years for a rather complex set of tax forms (A, C, F, and others). What I'm paying for is time savings, keeping the forms and calculations up to date (they are slightly different every year), and a guarantee. If TT screws up my calculations and I pay the wrong amount, Intuit has some responsibility. An OSS solution fir a once a year thing that changes significantly every year, and the failure (even minor calculation bugs) could cost you lots of money or in the worst case, jail time. Think I'll drop the $20.00. OTOH, if this is important to you, you could always start a new project on SourceForge.
Only if you can wade through the tonne (US:ton) of exemptions under the Act and persuade the Information Commissioner that there's a case for releasing them.
Actually they're nothing to do with the 2005 FIA, neither the DPA 1998 as they affect a financial interest. Yep, if a company can claim to stake a financial interest in not releasing the informaiton it's exempt from the FIA and the DPA. Shocking isn't it?
"It's not your information. It's information about you" - John Ford, Vice President, Equifax
Living in France for a year in 2000-2001 I had to file for taxes there. They had this Java-based software (with instructions on using it on Linux) that did the trick. Well, I still had to use the paper output it generated, I think if you had Minitel or whatnot you could file online too. I was impressed :-)
:-)
Here in Finland they know how much you earn anyway since your employer tells them, so they send you a "tax proposal", which is correct for "normal" people and they don't have to do anything other than possibly pay more/get a refund if the deductions their employer made weren't accurate. Anything special (like profits made from sales of stocks and investment funds, assets etc.) you can, depending on your bank, print out the correct forms online which takes a few minutes, return those and that's it. Of course it can get complicated here too, but I manage in less then an hour
http://www.taxfreedom.com/
Select taxpayers under a certain income, or with a student or military status, can use the TurboTax Web edition for free, with a free e-file for their federal return and (if their state participates in the program) one free state tax return.
They are not constitutionally legal anyway..
Just send them a packet of ice tea this April... See if they figure it out.
---- Booth was a patriot ----
Therefore, I requested to Turbo Tax to remove my user account, which contains a big deal of personal and financial information about me. They simply refuse to do that, as they say they need to keep my information on file.
This is something I do not like, so I just thought I would warn potential Turbo Tax Web users about this privacy issue.
And if someone has any piece of advice on how to face these people so that they agree to remove my account, it will be very much welcome!
Comment removed based on user account deletion
It may be cheap and easy but it might not make my life easier. Most non free companies have a way of making things miserable for their users and I refuse to fund them.
It was turbo tax's mistaken use of the master boot record for copy protection that put a freeze on any new non free software installation. I don't want tax time to wipe out grub for me. This also rules out using something like crossover office. While it might be easy to repair the damage, I refuse to pay money to be screwed that way or others.
The bottom line is that if I don't trust the bastards with my hardware, why should I trust them with tax records? My bank already sold me out so that my snail mailbox is flooded with Mortage applications. They sent me a form that I have to snail mail back with a signature to opt out of their spam program. What turds. A company that writes out to my MBR is liable to be as fast and lose with my tax information.
My ideology is firmly based in the practical. It does not hurt me to do my taxes by hand and by doing so I avoid many other problems. My avoidance of Windoze has saved me countless hours of upkeep that I used to spend due to bugs, worms and all of it was compounded by stupid shit like the registry. It's problems like this that free software is made to avoid. Non free software is designed to exert control over you and that control almost always spells more hassle than it's worth.
Friends don't help friends install M$ junk.
IANAAccountant, but I used to be, and to the best of my knowledge, it is still the case that expenses you incur in the preparation of your tax return are deductable. So if you have to shell out $35 for a tax package (and $89 for an o/s to run it, and $150 for a harddrive upon which to install that o/s) then as long as you itemise, and keep your receipts, what's the problem?
Sorry, i dont acknowledge anything above #10.
---- Booth was a patriot ----
Keep in mind that although H&R Block may say they will accompany you to an audit, they are in no way responsible if they screw up. Tax law specifically states that liability for filing errors are the filer's responsibility unless the return is prepared by a Certified Pubilc Acct. You will notice that H&RB (and Hewitt, et al.) will call themselves "Certified Tax Preparers" or some such nonsense.
Bottom line is that if they screw up, it is YOUR ass, not theirs. If you use a CPA, then you still have to pay the tax on any mistakes, but penalties, criminal charges, etc. are on the CPA, not you.
Not saying that they don't provide a valuable service, but make sure the person you are dealing with is knowledgeable and understands how much risk you are willing to take.
If you are getting money back then you should adjust your deductions so that doesn't happen.. Money should sit in your account rather than theirs.
With that in place since it's often extra to E-File just send the dead trees.. It's more of a pain for them to process it, and that gives them less time to find anything wrong with it.
What pisses me off more is buying an item that is labelled as .99 dollars, and ending up with almost a dollar in little coins. If prices had to be with taxes included, I'm sure a lot of the .99 cents would become .92 dollar or whatever would arrive at .99 dollars after tax.
You'd give all your vital tax, income, and personal information to some company offering to file it for "free"?
It's not "for free", it costs money. And, yes, I trust hrblock.com (after checking the certificate) as much as I trust any tax preparation software. In fact, I trust using a web-based tax system from a Linux machine more than I trust an application-based tax system from a Windows machine (where spyware is rampant).
Besides, you're a fool if you assume that "the bad guys" can't get your tax, income, and personal information by lots of other means. You need to protect your assets so that they are safe even if people get that kind of information about you.
Not I. This is one case where I don't mind taking 30 minutes to fill out a form and physically snail mail it (certified, of course).
Consider yourself lucky if your taxes are simple enough that you can fill out a paper form in 30 minutes and do it correctly. I haven't been able to do that in years.
My tax preparer also does a great job on my yearly return. But he provided a much more important service one year: when the IRS made a mistake, there was nearly nothing I could do about it on my own. The government came close to freezing my assets, and they stalled for 8 months before admitting the error.
(It's said that stalling is an unstated IRS policy; the hope is that you'll give up and let them have the money.)
Find a local tax accountant and develop a relationship. That one incident would've cost me two lifetimes' worth of professional tax preparation.
--
Dum de dum.
Freedom is not the license to do what we like, it is the power to do what we ought.
Turbo Tax For the Web.
http://www.turbotax.com/
Why are people talking about buying and *installing* software? Just use the freakin web version.
I've filed electronically using TTFTW for the past couple of years (both state and fed). Return goes directly into my checking account via EFT.
Cost is under $50 to file both fed and state. Can't beat it with a stick.
-Scott
The IRS.gov site mentions sytem upgrades being completed by the 18th, that will allow for the e-filing of your 2004 taxes. As per the free, H&R Block and a number of other companies will allow you to e-file for free if you make under a certain amount of money, et al. I'm not sure about state taxes as FL has no state income tax.
There are some places, mostly fast or quick service food, that include taxes in the price. Businesses won't go for it because then the product looks more expensive. Deception in numbers.
Taxes are automatically taken out of the paychecks of all but self employed people in the US. The problem is that an employer can't take out the exact amount from your paycheck because we don't have flat tax brackets, and have tax deductions. A part time job in addition to your main one may bump you up to a higher tax bracket. Your employer won't know how many dollars you deducted in mortgage interest, student loan interest, medical expenses and so forth. Most middle class and poor people either get a refund or end up paying a small amount at tax time.
If we had a flat tax or got rid of deductions, then the need to file would be almost nonexistent.
People that work for a company usually have their taxes withheld from their paycheck too. However, not everyone is paid that way, may have their own business, a part time job, working spouse, etc. All of those can throw off what taxes you have to pay. Also, the Feds and the individual states do have their own specific tax forms. They've existed for decades. What the original poster is complaining about it is for electronic filing. In that case the IRS has not come up with their own Java or cross platform app to do any of this. Instead, it lets software companies come up with their own tax software that I assume has to follow some guidelines the IRS has set.
Now concerning sales taxes, there is a good reason to not include the tax in the price: not everyone pays it. There are some oarganizations/people that have a tax exempt status, so their purchases are not taxable. Also, the amount of tax may be different depending on the product (ie food may be taxed at different rates in different localities than other goods, alcohol at a higher rate, etc). It's also a good in-your-face reminder of how much govt is taking from you. If it's included in the price, the amount of tax is hidden. Fuel is taxed like that and I would guess that the average Joe on the street doesn't have any idea how much he is paying in taxes everytime he fills up his car, but he probably has an idea of what the tax rate is when he goes to the store. Including the tax in the price is a nice way to keep hiking up taxes and mask them as normal price increases.
I've been to Ireland and didn't really find it's way of handling taxes any easier or 'consumer friendly' than what I've experienced in the states. I was pleased at the VAT refund station at the airport, though. Nice little bonus, but you guys are getting raped.
the good ground has been paved over by suicidal maniacs
Some googling found me a program called Open Tax Solver. I haven't yet tried it, so I can't really say how good it is.
A version for this years US Form 1040 has apparently just been uploaded.
I don't know if it's related but...
Some years ago Glen Roberts got hold of the IRS' manual for auditors under the FOIA and published it. (At the time he was running a newspaper and selling books, essentially all based on info he got via the FOIA or his experiences in getting it. It included a "how to" manual for using the FOIA.)
The IRS got him enjoined from distributing the auditor's handbook. (And some agency also got him enjoined from distributing the FOIA "how to".)
I think fallout from that episode ended up limiting how much stuff you could get from the IRS under the FOIA.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
When my wife and I started acquiring investments and stock, we realized that things had just gotten too complicated for us; at one point, we did our taxes three times, and got three different results.
So, we've had them done by H&R Block for the past three years, and we'll be using them this year as well.
-- The reason it's called the right wing? Irony.
I don't expect there to be a free Turbo Tax / Tax Cut equivalent. The idea of free software, as I understand it, anyway, is you make a program that you use, and you just give it to others because you think they may find it helpful.
This cannot happen with tax software. If you understand the tax code thoroughly, you're going to easily know exactly which forms to fill out in a specific year. And you would be an accountant, not a programmer.
Basically a programmer isn't going to sit down and write a program to do their taxes because by the time they know how to do their taxes, why would they write a program to do it?
This is why it takes a commercial entity to say "Ok, we have the know-how and the programmers to put this thing together, and we know people will buy it" -- god bless them because I've been using either Turbo Tax or Tax Cut for many of the past few years, and every time it has saved me money.
Certainly these companies can probably increase their sales a bit by making Linux binaries of their software, but don't expect them to give away the source to something they've invested so much $ in and depend on sales of to make money.
Coincidentally, I don't mean this post to be deragotary towards Open Source people, but am I wrong that no one is going to start a project for code that he himself isn't going to use?
Ecce Europa - Web Design for Business
http://www.taxactonline.com/
Entirely web-based; I've been using it to e-file under Linux for two years. If you just want hardcopy, it's actually free.
Four years ago I bought a Jackson Hewitt tax franchise as a hedge against the day when I'm too old to program. I'm 52, work full time as a C++ programmer, and haven't been laid off yet!
I'm not sure about H&R, but as part of our basic price we promise to pay any interest and penalities that occur if we make a mistake. In addition, for a small charge the client can extend that coverage to include up to $5000 in additional taxes that might be levied.
Tax filings are the taxpayers responsiblity even if God himself prepared the return. I'm sure a CPA prepared Al Capone's return, but Big Al is the one who went to jail.
You will notice that H&RB (and Hewitt, et al.) will call themselves "Certified Tax Preparers" or some such nonsense.
I pass a difficult exam (based on the tax portion of the CPA exam)in order to qualify as an Enrolled Agent which gives me the right to represent clients in audits and in tax court on identical basis as attorneys and CPAs. Of course EA have identical responsibilities with our attorney and CPA friends. See IRS circular 230.
Most Jackson Hewitts have an EA or CPA available to represent client in audits.
All you folks doing the free returns, when you get the letter from the IRS this summer let me help you get amend your return to get you out of trouble.
I happen to work for a company that makes tax software. It's a ton of work. A tax analyst (typically a CPA) and programmer team will typically have between 2 and 4 states, plus there is a team of a dozen or so that spend full time all getting approved forms (the forms must be very, very precise since they are usually optically scanned). There is a team of a dozen or so doing underlying programming for the system in general. The federal system has a half dozen people dealing with it specifically. All these people are doing this full time.
This is not even mentioning the fact that we have a lot of integrated accounting systems that interface with it, because those don't interest you.
If you're implying that some community should do this, I just don't see how it can happen. The knowledge is quite specialized and a ton of work is needed on a recurring basis. A LOT of testing must be done. People probably will not be willing to use a system unless there's some liability on the part of the authors.
If you're saying that the government should provide the software, good luck. The states are all WOEFULLY understaffed; with the budget cuts in the last few years, many states have had their taxing agencies practically decimated. Most lost a lot of staff, some lost most of theirs. The remaining staff is hideously overworked, and there's practically zero programmer time available.
What's the incentive for the government to push for something like this? There are already good products on the market, and they don't have to lift a finger to do it. If they did go thorough all that work, they'd be taking business away from companies, and they'd be taking on liability themselves for incorrect programming.
All my earnings are reported, all my tax breaks pre-calculculated, interest reported by the banks. Only thing I have to add are tax deductible donations like Red Cross stuff.
It could Take me about 15 seconds to do my taxes.
I have NO privacy in my life, but it is not easy.
Really, Uncle Sam gets reports from everyone and "voluntary compliance" is a fiction. Even charities have forms to fill out.
My wife thinks they should have a web site that has the forms filled out and a little button, "I agree" or "make changes". The I agree button would take all of no seconds to push and Uncle Sam knows where my money is, so the next screen should present payment options. Make changes should let you enter things they might not know about, which would be rare, or let you file a complaint that a human being actually has to look at.
Friends don't help friends install M$ junk.
Check out TaxACT. The basic "fill in the forms" version is free -- you print the resulting forms and mail them in, and it doesn't cost you anything. You can e-file for $7.95. No, it's not free, but come on -- under $8? You can barely see a movie for that these days.
The deluxe edition is only $9.95, and it is more thorough if you have things that can give you tax breaks. I'm doing the deluxe version this year, but did the standard one last year -- I started out thinking I'd print and just do it for free, but then realized that the convenience of e-file for $8 really can't be beat...
Since it's web-based, it works fine from Linux. One problem I had (and I've had with another web site as well): for some bizarre reason, the first screen, with the user agreement, looked entirely blank -- it was really just white text rendered on a white background. Strange. It came up fine in konqueror and firefox though, and once you get past that first screen everything seems to work fine in Mozilla (it did force me to install Firefox though, which is actually a good thing).
Anyway, sorry to sound like an ad, but I like it, and I like that I can use it under Linux. It gives my sense of privacy a bit of the willies, but I think you're pretty well protected by law as far as that goes...
Here in Ireland (and in the rest of the EU) your tax is automatically taken out of your paycheck
It works the same way here in the US. Income and other taxes are automatically deducted from my paycheck. However, since income tax is not a flat percent of gross pay, what they deduct from the check will seldom match exactly with what you actually owe in taxes.
and you don't need to worry about filling in tax returns every year unless you run a business.
If you don't plan to take a number of itemized deductions, you can fill out the simple tax form, which basically requires you to add up how much money you made, look up in a table how much you owe in taxes on that amount, and then subtract the total amount taken in income taxes from your pay. It took me all of about 10 minutes to do my taxes last year, which included the time to add up the income from four sources.
Of course, owing to the special-interest and loop-hole filled mess which is the US tax code, you can often pay a bit less in taxes if you take the time to figure out all the deductions you're allowed to take and fill out the longer version of the tax form which lets you itemize your deductions. This can take quite a bit longer.
Come test your mettle in the world of Alter Aeon!
Scribus is a robust open source desktop publishing app. Editing pdfs is one of its most killer tools.
Just some clarification - from a CPA with a masters degree in taxation - the tax return is ALWAYS the responsibility of the taxpayer regardless of who prepares it. However there are cases (not too uncommon) where a taxpayer is relieved of criminal wrong-doing by relying of "compentent" professional advice. But if you lie to your tax preparer you pay the tax and go to jail if the lie is big enough. But on the more practical side most undivorced reasonably compensated taxpayers have only 4 deductions left as a practical matter - mortgage interest, state and local income OR sales taxes (sales tax new this year (kinda)), property taxes and charitable deductions. You may qualify for medical deductions but not unless you feel like you're going broke paying them. If you're destitute and have kids you may qualify for the earened income credit and alimony is deductible if you're paying it. Otherwise if you are an outside salesman (person) or drive alot for your employer without being paid mileage you may have some other deductions available. Is this quick description all encompassing - not by any means. But most folks can do their own taxes if they just would.
I have read all the documentation.
One could create open software to calculate taxes and spit out the forms with the appropriate blocks filled in. You would then sign the forms and mail them in the usual 'dead tree' fashion.
But there are so many hoops you have to jump through for your software to be allowed to offer electronic filing that a true open source alternative is simply not realistic. You can't just slap a program together using a certain data structure, throw it up on the net, and announce "Here it is, folks!"
For starters, if Joe Schmuck downloaded the source and recompiled it (whether he made any changes or not), the binaries would then have to be resubmitted and Joe Schmuck would have to then also jump through all those hoops.
The best one could do, given IRS regulations, is created a closed-source binaries only (just like Windows) Linux soloution for electronic filing. And I doubt seriously anyone is going to want to do the aforementioned federal hoop jumping (which includes background checks for some software authoring company employees and/or the company itself) and then give the program away for free.
I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
My employer does take out the appropriate amount of taxes, based on a 'witholding' form I fill out, but:
my employer does not know how much interest I paid on tax deductible loans.
My employer does not know how much money I gave to charities this year.
My employer does not know how much I spent on medical expenses (which are deductible)
MY employer does not know how much money I made or lost in investments this year.
And I prefer to keep it that way.
Sales taxes in the U.S. are incredibly complicated. They vary by small region. Most States have a sales tax (in Virginia it is 4.5%), some cities take another 2-3% on top of that, some counties add a percent or two. In some jurisdictions food is not taxable, and in others, 'convenience food' is taxable, but not 'other' food - meaning I can walk into dunkin' donuts and get 1 donut and pay tax, or I can buy a dozen and pay no tax at all. Two identical stores with identical products just a few miles apart will pay different tax rates. It is ugly and complicated, but I like not having the tax as part of the advertised price - it makes it easier to comparison shop, and certainly makes the advertising literature easier to produce.
Objection! Assumes organs not in evidence!
Frodo Lives!!
Well you see, over here we have loopholes. Deductions and things.
It means anyone with any real money, brains, or just a compitent accountant, doesn't have to pay any taxes at all. It's a great system, and it works.
Your system is all "fair" and we don't take kindly to that over here in the USA.
- Adam L. Beberg - The Cosm Project - http://www.mithral.com/
Huh? Last time I checked France was a huge part of the EU and while it may seem bizarre to you and your 4 million countryment, I filed just as cryptic tax returns for them over the last 3 years. Guess what, they withhold for Social Security but not Income tax, meaning I wrote a bloody huge check four times every year to pay the tax man.
As far as "your way being better", I'd much rather have everyone write a check to the government every year, maybe that would finally spur the revolution we need. When you don't see it, except as a digit on a check, the tax seems reasonable. Let people write a check for 20% of their earnings and see how fast fiscal conservatives get elected.
While I'm at it, every time I'm in the US something I get really pissed off at is that shops are allowed to advertise a basic tax-exclusive price on goods. Here in the EU it's law that shops have to advertise a VAT-inclusive tax so that when you get to the counter you pay the advertised price, not the price plus 10-20% sales tax. How do you guys put up with that?
How do you put up with paying a 20% tax, in addition to confiscatory rates for social security, income, and property tax? Again, if it were buried in the price, I'm sure we'd gladly pay but since it's obvious, it helps keep government spending down.
At the bottom of the endless pile of paper work which characterizes all regulation lies a gun.
Alan Greenspan
A number of people have mentioned H&R block finding additional deductions they wouldn't have thought of on their own. Anyone care to be specific?
The reason I ask is that I've always done my own taxes, either by hand (way back when) or with TurboTax or TaxAct. My tax situtation isn't overly complicated but isn't overly simple either (mortgage, small business, investments, etc).
I've never felt like the tax code was too complicated for me to find deductions I was entitled to. All the tax programs ask you specific questions related to all areas where you might find deductions. I'm just wondering what are these elusive deductions that H&R block is able to find that couldn't be found with a little bit of homework.
Beauty is in the eye of the beerholder.
If you're going to pay someone to do your taxes, I'd avise checking local papers, etc. to find someone other than H&R Shaft er Block. I get mine done by the same person every year, the difference is she is motivated by the fact that the money I pay her is HERS, rather than H&R Block's. Trust me, I've done the Pepsi challenge with this and it is worth it. "If there's a refund..." HA HA HA sucker! 'Course working on the road does make for a lot of write-offs...
Send whiskey and fresh horses!
That is what I'll be doing this year but I hope to god that next year we can start something new and not have to worry about this any more.
Last year, the on-line TaxACT was one of the few IRS Free filing options that my family qualified for. I did federal there for free (including the filing) and paid some very small fee ~$10? for the state version and filing (with all the info automatically transfered from the federal form). I plan to try it again this year and hope they still have my info on file making it even easier.
Hire a CPA. Seriously . They're going to find a LOT more than a little "questionairre" is going to find by asking you questions.
A highly-skilled CPA (i.e. one who works with technology people) will be able to find places where you can deduct expenditures that your own Intuit and other software can't possibly take into account.
Use your DSL line for sending business emails? That's deductable as a business expense. Power to keep the cable modem and WAP running? Also deductable.
Accept PayPal payments for your Free Software work? That's not income, its a Gift, and deductable. There's a lot more where these come from. Most of them aren't going to be asked on any sort of tax software.
We just finished a website for a local CPA here in Norwich, CT. and he's really skilled in these and other areas.
Definately check out your local CPA, before you head into H&R Block or online for some question-and-answer forms and software.
It'll pay for itself in the first year's return. TRUST ME.
I am all for replacing the current taxation setup with something better - however, I don't think that the "FairTax" is the right approach.
One of the things I remember from economics courses I took in college a few years back was that taxation tied to sales of goods and/or services is a regressive tax - that is, if the sales tax on a $12 item is $1 (which is approximately what it would be here in Los Angeles), the $1 is a bigger percentage of a poor person's income than it would be of a rich persons. This makes the tax burden higher for the poor than it is for the rich. That doesn't seem like a sound policy to me - even though the proponents of such a tax suggest a rebate to those at the poverty line or lower, what happens to those who are only slightly above the poverty line? The poverty line's accuracy is also determined by geography - $10k a year goes a lot farther in the midwest than it does in Southern California.
That's not to say that the other way around - which is in theory how we are currently operating, but not in actuality - isn't fair either. Having taxation tied to how much you make is a disincentive to making more (theoretically). Why should someone be penalized (through higher taxes) for making a good living? Isn't the idea of a capitalist system to make as much as you can?
Flat tax makes the most sense of income taxes - even though I still don't like it (I don't think income tax should exist at all). Oh yeah, and encourage reduction in spending at the federal level (ok...you can mod this as "Funny"). Governor Schwartzenegger's State of the State address had a lot of good points - let's hope he can take it beyond mere words.
That out of the way, there have been two big assertions made about the way e-file works, with varying degrees of veracity. I will address them each in turn.
Assertion 1.The IRS is prohibited by law from offering a free efile package (either web-based or PC based)
Sort of: This is a decision that is more or less up to Messers Bush and Snow, not Everson. In general, the US goverment doesn't like to compete against private industry based on two predictions about the goverment product:
Assertion 2.Lobbyists have kept a Free and Open solution from being offered by keeping the specifications secret and only allowing evil corporations to know how to submit returns.
False: The steps and specs are carefully hidden away in the brightly colored Pub 3112(pdf) and others, such as the equally shiny Pub 1345 (pdf)(The actual specs for the 1040 are in the dead-tree-only Pub 1346)
Exercise for the reader:
- Get some friends together and write a tax preparation package in whatever language and whatever license you want (No extra credit given for ironically titled packages written in Malbolge or Brainf--- and distributed under the new X11 License). Found an LLC under the laws of your state. File Forms 8832 and 2553 with the IRS to be recognized as a Subchapter S Corporation (as a measure to avoid the hassles and shared liabilities of being a partnership).
- Figure out the mysterious Step 2 (Hint: Getting recognized as an ERO, and coming up with a business model are likely involved)
- Profit!
----Note: If you have an unwavering faith in the idea that the IRS is evil, then you misunderstand. The IRS is a bureau. As a whole, the Service has absolutely no emotional investment in being either kind or unkind to the taxpayer. Everything the IRS does is prescribed in 26 USC by the Congress. If the law says charge a penalty, we charge it. If the law says grant credit interest on late refunds, we grant it. If the law required that each US Citizen send us a chicken in lieu of a 1040 (it doesn't), then we'd collect 'em. All the same to us.
It may not be just, but it is fair, and that is more important.
So how will you be doing this year's taxes?
I won't. Instead, I'll pay x hundred $ for a kick-ass CPA, like I always do, who already forgot more about the tax laws than I'd ever want to know, who can handle my stock options and separate sole proprietorship and charitable contributions and new house interest and the fact that I just got married but didn't change my withholding . . .
I've come out in the black since I started using to my CPA, and I'll trade money for time any day.
You're right; such a policy wouldn't make any sense, which is probably the reason it is not the policy proposed by the FairTax. Rather, it proposes a rebate to all households equal to the amount of tax on spending up to the poverty line for said households' given situations (i.e. marital status, number of children, geographical location). This rebate could, in one implementation, take place easily via the employer, much like current payroll taxes only in reverse. So, when you get your paycheck, not only is it actually for the full amount of your wages (at least sans state income tax), it includes extra money for you to pay the taxes on your groceries and rent.
This provision of the FairTax is indeed what makes it "fair," but it's also its most complicated aspect, ensuring that the FairTax will probably never come to bear.
A VAT tax is the kind of simplification that would allow a radical simplification of the income tax.
Richard Nixon floated the idea of a VAT tax for the United States.
VAT is used in Europe. VAT is where each seller collects the VAT tax on her sales and deducts the VAT paid buying stuff for sale. Governments like it because it tends to be "self collecting". It gets revenue from the formerly "underground" economy. It can get revenue from trans national corporations that manipulate "transfer payments" to shift profits offshore.
As a previous poster has noted, the tax system needs an XML data structure and an XML description of the algorithms for the computation of tax.
I've daydreamed like this: Divide the task into an algorithm part and a sample data part. A python root module would emulate the "1040" form. All the child forms would be separate Python Modules corresponding to each schedule or tax form. The XML tagged test data would be included with each package of modules. The package of algorithms plus data would be GPG signed.
This scheme allows free and professional tax applications to co-exist. It enables modular development. It creates credible test data that can be used to cross validate alternate tax packages. It enables trusted open source.
You're asking the wrong question. Better questions are: Why do you have to file tax returns at all? Why is our tax system so complicated? Why does it cost so much to comply tax code and regulations?
Last year I spent hours crunching through my taxes using turbo tax. I tried really hard to get it all right, but in the end, I'm not honestly 100% sure that I did. Well I think the answer is here at fairtax.org. Basically it all comes down to 3 words "National Sales Tax". Then the linux software problem goes away
My Weblog
You don't need a PDF editor to fill in the forms electronically. Adobe's reader (I've only tried the Windows version; not sure about the Linux version) will let you type in the fields and save and print the results.
. html.
You can get the forms at http://www.irs.gov/formspubs/lists/0,,id=97817,00
Pulling together is the aim of despotism and tyranny. Free men pull in all kinds of directions. It's the only way to mak
I would love to see something like fairtax or a flat tax replace our current tax system, but I don't hold out much hope for it. From a political perspective, producing "tweaks" in the tax code is a great way for our representatives to pander to special interest groups. Plus, there are a lot of people for whom the current tax code is their bread & butter - the IRS, H&R Block and many independent accountants. Such a bill would face some serious opposition.
:-(
Even if such a broad, sweeping reform were made, I fully expect that by the next year, our politicians would introduce special exception cases to benefit politically powerful groups.