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Ask Slashdot: Can You Trust Online Tax Software?
An anonymous reader writes "TurboTax from Intuit and H&R Block's own tax package have been perennial mainstays for U.S. citizens trying to use software to figure out just how much they owe the country, without reading the tens of thousands of pages of IRS forms guidance. With tax season just around the corner, the new online platforms from both providers raise an interesting question: can you trust your return information any more or less to an online platform than you do to the equivalent software on your computer?"
...whose name you know. More than once it incorrectly calculated taxes owed, leading both the Fed and State governments to send me a check, saying, "hey, you way overpaid your taxes."
I'm done with tax software. It's back to a human accountant. Her first consultation with us turned up a $3,400 deduction we had missed a couple of years back. That alone pays for a few years of returns and advice.
Given the recent revelations about NSA spying, I refuse to use these services. The risk is simply too high that the government might see my tax returns.
If you know the Tax Code ok, or you actually have simple taxes*, software works fine.
You have to be somewhat familiar with the tax code because there's no easy way for us to translate tax law into simple English, so it's very easy for people to misinterpret one of the numerous questions the software asks. If you do that you a) don't get a deduction you deserve or b) do take a deduction and get screwed if you get audited. I'm a bit out-of-practice, but the student debt/tuition credit/HOPE credit/etc. nexus of Feds giving people tax breaks for paying for college in particular is very easy to screw up.
*Everyone I have ever met says they have simple taxes. Then they drop the annuity on the table and call it a W2. If you have any income besides interest on a bank account or a W2 you do not have a tax form H and R Block defines as "simple." You really need to read the paperwork that you are sent because many people take a chintzy $350 job helping their cousin cater a banquet, get a 1099, and are then surprised that I am legally required to put that on a Schedule SE and a Schedule C or C-EZ attached to a full 1040, and by the time you pay me for all those forms AND the self-employment tax you're losing money. The really big numbers at the top will tell you exactly what form it is. They'll be 1098, 1099, or W2.
Been doing it for years with government provided software.
Mind you it doesn't say 'cloud' every 5 words, but it submits it all online and even auto fills in a lot of your data from government databases. Not sure how long it has been available for but many many years without incident.
Oh and its free.
Thankfully, Intuit, Inc. (by a totally crazy coincidence also the maker of TurboTax(tm), a market-leading tax software solution) has been fighting to save us from communism...
So here in the Land of the Free, the IRS probably has the information it needs anyway (for fraud detection, and because Joe Worker's employer already reports it); but we can't let them destroy the free market, and capitalism itself, by making the process any easier. Instead, you just hand over your money and personal information to an 'Authorized e-File Provider' and be glad that you live in the bestest ever country on earth.
We will be rolling out a similar system for health insurance soon.
but legally the government outside the IRS isn't allowed to look at your tax returns
Unless you're buying health insurance in one of the new Obamacare exchanges. Or applying for a FHA mortgage. Or you happen to be the subject of an ongoing criminal investigation. Your State Government can access it too, if they have an income tax and wish to match up your State return to the Federal one. The IRS also shares returns with SSA.
There's also a multitude of Federal and State agencies that can access your tax account, if not your actual returns. The Department of State will check with the IRS before they issue or renew a passport, for the purpose of collecting foreign income taxes and denying passports to serious tax scofflaws. Child support enforcement agencies can seize refunds, so they've got a mechanism of communication with the IRS too.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
I have heard circumstances like this multiple times. It really bothers me that we have invented a tax code that is on par with the game "go" as far as its ability to be computerized. There are extremely talented individuals making a living interpreting our tax code. Those same people could be doing something far more useful to society than they are now, but we have created an entire industry that sucks them away from more useful endeavors by cobbling together a tax code that is a mashup of bribes to interest groups, bribes to voters, authoritarian interference with our individual lives, and a glass ceiling protecting the one percent. If any highschool graduate can't just sit down with a calculator and pay the *exact* amount owed, we have done something wrong.
refactor the law, its bloated, confusing and unmaintainable.