I'd suggest FreeTaxUSA.com as an alternative. Federal is always free, and state taxes are ~12/state. I don't have anything obscure about my taxes, and their forms indicate they can handle much more complicated situations than I have. I've used them for 3 years now, with no issues.
I will say their system is a bit clunky. I feel like I get in loops sometimes where I go through already filled in information and wish I could just jump to the next section. I wish they would give me more questions on each page so I can better understand how a response to one question filters through down the line.
If you want to get some of your pre-paid taxes back, you will have to file but the tax office doesn't care if you don't.
Fun fact, they called the government provided tax software ELSTER which in German is also the name of a bird (Eurasian magpie) which is also known as the "thieving magpie". Who said the government didn't have a sense of humor!
For instance, there's been legislation where the IRS would simply tell you how much you owe and you pay it or dispute it. The IRS already know this amount, because this is what eventually happens.
Turbotax successfully lobbied for its defeat. It explicitly spends large amounts of money to complicate and convolute the system and structure it like a classroom quiz.
It is incredibly arcane, and in some cases individuals holding publicly traded assets are legally required to file income tax in all 50 states.
https://www.propublica.org/article/filing-taxes-could-be-fre...
California piloted a pre-filled tax return system (similar to Sweden and Australias, that the OP was talking about) called ReadyReturn in 2005 with 51,000 people.
Intuit then spent $3 million to smash it. They lobbied and then sued the state to stop the program. They are also profoundly incompetent technologists. There's an entire subreddit dedicated to how broken their stuff is (https://www.reddit.com/r/TurboTax/top/?t=all)
What did the participants of ReadyReturn, the pre-fille forms, think of the government program that Intuit killed?
"99% stated they were satisfied with ReadyReturn, 97% stated this is the type of service government should provide, 96% stated it was more convenient than how they filed in the past, 95% stated it saved them time, and 98% stated they would use it again"
Once again private interests sabotage and destroy the public will.
The line of "the reason taxes are so difficult..." is from sheer propaganda shills. Tax simplification has happened, it worked, and Intuit killed it every time. The reason is Intuit. They are the buggy whip industry that won. Shameless grifters that intentionally disrupt people's lives for profit.
Use another service. Any listed on the IRS website: https://apps.irs.gov/app/freeFile/browse-all-offers ... Never give Intuit a dime and click on every ad you see from them.
That said, there are a lot of challenges to such a program.
Ready return was limited to people who were single, no-dependents, standard-deduction, only-wage-income, one-employer, with a maximum adjusted gross income of $139,917
This is great for a number of people and should exist!
That said, if you fall into this category, your 1040 should take 15 minutes to file by paper.
Where automated systems break down is handling more complex scenarios. Selection of deductions, pass through business income and losses, charitable donations, corporate investment vehicles, ect.
Many of this things require individuals to make choices at the time of filing. This is challenging to automate.
There are some exceptions to this depending on business size i think but the vast majority of the data is in the feds hands.
That's one of the things I never understood, the US is only country im aware of where you have to file if you're a citizen, even if you're a resident overseas.
HMRC's website in the UK is far from perfect, but its tax form covering all UK personal taxes has the features people appear to be paying for with TurboTax (Q&A format, most sections being optional, references to industry specific deductions, guidance notes) baked in.
If your taxes are "easy" in the UK they come out of your payroll without you filing a return.
After learning about how TurboTax lobbies to make filing more difficult, I swore I would not use them any longer. I also take everything opportunity to let people know about TurboTax's lobbying.
So far freetaxusa.com seems better than TurboTax IMO. It's cleaner and to the point. No unnecessary animations or any of that nonsense.
LOL I just tried to sign up and they rejected me because my personal email is on a .ch domain:
The Email Address can't be a foreign email address ending with .ch.
The interface is fairly minimal. The workflow mirrors the questions/boxes on the IRS forms/instructions, a very helpful feature in my situation since I could easily cross-reference the relevant IRS publications when necessary. They provide excerpts from the documents as you go, which is all I needed in many instances. Unlike TurboTax, the prepared forms were actually correct (to the best of my knowledge, I am not a tax lawyer).
Simple, cheap, reliable. Would and do recommend.
EDIT: Story is related to last year, I plan to use them again this year.
Once my bookmarks are clear, I know I'm good to submit.
1. reporting scholarship income (goes on the line beside box 1 and nowhere else), and 2. state taxes are not supported, and my state does not have an equivalent service.
An example is figuring out whether I would owe taxes on the gain from the sale of a primary residence I owned for less than 2 years. Figuring that out manually took some googling, finding an IRS guide, reading multiple pages of regulations along with exceptions and determining where I stood.
Another is determining HSA contribution limits when my wife and I were in individual HDHP plans part of the year, and a family plan the remainder.
0: https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...
The whole thing is a mess because TurboTax and H&R Block and the like want to stay in business. If the process is too easy then the middlemen won't survive.
(State taxes are a different matter; I've paid Illinois and Michigan taxes recently, and they do provide an easy and obvious way to e-file directly with the state.)
There are no income exclusions or anything. It is possible you will be unable to use it if you have to use some really obscure forms, but it does have all the forms that paid Turbo Tax can file for you. You also might not be able to use it if you have one of those weird tax situations where the IRS instructs you to write a message across the top of your 1040.
https://www.irs.gov/e-file-providers/free-file-fillable-form...
It’s all electronic. You get an email confirmation.
Interesting, I use TaxHawk (parent company to FreeTaxUSA, same software) and I find their UI excellent.
I had to quit turbotax because one year I was a 1099 worker and every year since, it pushes me to go with their "small business edition." Each year it got harder to avoid "upgrading."
Seriously, just do it. Quitting TT is so much easier than quitting anything else.
Things like backdoor Roth contributions (which aren't that exotic, tbh) were very confusing in credit karma, to the point where I actually did my taxes with another service just to verify that the calculations were correct, then submitted with CK. I found several mistakes in the CK results that were due to bad/confusing UI.
You likely won't hit this problem if you're just doing a 1040EZ or 1040 with standard deduction, no stock sales, etc. But if you have any complications...sometimes there's a reason to pay for software.
(definitely not defending Intuit here, though. Tricking people into paying is not cool.)
> Intuit Inc., owner of the popular TurboTax DIY tax preparation service, has moved forward with its $8.1 billion acquisition of Credit Karma, Inc., after satisfying the government’s requirement that Credit Karma divest its tax preparation business.
https://www.natlawreview.com/article/anticompetitive-concern...
Divest their tax prep business? I just did my taxes on creditkarma, and it was the same website that was trying to market me credit cards that i prepared the taxes on.
AHA, that article has a date "January 3, 2021", so I guess still in progress?
But ok, divest their tax prep business... the WAY CK was providing free tax prep was by funding it with the rest of their portfolio, the credit card marketing and such. The tax prep got people into their system (and possibly got their data into their system, I'm not sure how much was opt-in or opt-out).
Divest their tax prep business? Into it's own business? It won't possibly be able to provide the service for free anymore right? They will probably quickly go out of business.
I don't know how the heck anti-trust regulators think this did anything positive. Intuit one way or another succesfully eliminated the competition from free creditkarma tax prep. Gah.
That just makes me wonder what Credit Karma is getting out of the deal.
In several years of using it, they've never emailed me advertising anything, and while they're obviously sharing my info with credit card companies and banks, I haven't gotten any marketing from them either. If you don't care about the recommendations, as I don't, you can use it for your taxes and never think about it the rest of the year.
This would all be in addition to what they knew about your credit score or anything else you input on the other parts of their platform.
But as others pointed out, that part of CK got split off when Intuit bought them.
The DOJ forced them to sell that whole unit if they wanted to be acquired because of the super obvious data mining consolidation
After that been using CreditKarmaTax; no shenanigans.
At least look into the options. Credit Karma Tax, FreeTaxUSA, 1040.com - there's a bunch of stuff out there made by companies that don't actively try to make the IRS less functional.
Credit Karma was free for filing both state and federal though they did make two attempts to get me to install Cash App, both of which I declined.
Unless your finances are extremely complicated, it's fairly easy to do it yourself.
I've done all these things painlessly with regular tax software. I've also tried a professional CPA once, and he was useless. Just sat there asking me every question that the software normally would, and then typing my answers into his software. Nice guy, but not worth $400 compared to $50 software.
Unless you know exactly what your cost basis is, yes. It gets complicated with construction loans, HELOCs, refinances, having lived in a property for quite a while before renting, etc.
But yes, Accountants can help you evade taxes in ways unlikely to be audited or caught.
I would say it only gets really complicated once you venture into dealing with equity and AMT and stuff.
It’s funny though that people will scour the web and clip coupons to save money, but they won’t research how their biggest expense (tax) is calculated.
So does deal finding and coupon clipping, which is what the parent was comparing to.
If you have just a salary, no mortgage, and no stock/equity transactions, nothing has changed in 20 years, and it takes all of 10 minutes to fill the Federal form out (and I'm being generous). Every once in a while there is some extra credit, but it's usually prominently advertised. A simple hack is to look at the previous year's tax form and compare to see if anything has changed, and look up the guide related to those entries.
If you do basic stock transactions (RSU, SPP, buy and sell), then it's a bit more pain, but still easy.
Deductions are things one can easily miss, but even then, once you figure it out, you just have to keep an eye out for changes to deductions. The recent tax changes screwed it all up (although they also made taxes overall easier for those not in high COL states), but the usual deductions to watch out for are mortgage interest, state taxes, property taxes, and charitable donations.
If you have other things going on (side business, etc), then I would suggest paying for a CPA.
Worst case, just plug the numbers into TT and see if what you get is the same. If they imply you can get more, then pay someone to do it for you.
I know people like to think it will take a lot of effort, but at least for my salary, if I count the hours it takes for me to do all this, it's always cheaper than paying a CPA.
Merely dealing with an audit (even if everything you id was correct and above board) can be extremely stressful and time consuming.
My parents also thought their CPA was really good an knew what they were doing. Turns out that even CPAs screw up sometimes. :-)
They kept saying "Send us this doc and you'll be good." We'd get the doc, send it to them, and they'd say it's not enough.
Called the university. They said they'd never heard the IRS contest the form that universities provide (1098 or whatever it is). I had to beg them to find my actual bill for that year, so I could show them that what I paid match what was billed. Finally the IRS relented.
Jokes on them, though. I found some unused deductions, amended my tax form, and got back an additional $400.
Having said all that, I still do all my taxes myself. Neither Turbotax nor a CPA would have spared me this headache - they would have filed it exactly as I did - just slap on the form the university provides. My wife used to use a CPA in the past - relatively cheap ($150 for both federal and state). I found issues with his work - he didn't take as many deductions as he could. I amended and got back extra money. He also messed something up which the IRS (rightly) contested. We contacted the CPA so he could fix it and he went AWOL. We had to deal with it.
If your financial situation doesn't change from year to year, I suggest paying a CPA once to do your taxes, figure out everything he/she did, and just do it yourself next year.
I think that the most important thing to remember when dealing with any government or financial institution is to keep paper records of everything. For our education credit dispute, we had my wife's transcript and receipt for tuition paid in the tax folder; we sent that in and the matter was closed. Same goes for capital gains: it's really handy to have detailed records of the cost basis for anything you sell. Same goes for identity theft, bank fraud, stolen credit cards, contractors that don't do what you pay them to do, etc. Know what you have agreed to pay, keep a paper trail of it, hold up your end of the bargain, and then insist anyone you do business with hold up theirs.
I generally do keep paper records. For this case, both the university and a tax accountant told me what I had submitted is all that is needed. There's a reason the university gives you a tax form every year. Saying I should keep more records is like the IRS coming to you and not accepting your employer's W-2 form and wanting additional proof of your wages. Did you happen to save your biweekly payslips?
For standard deductions/credits (of which education is a common one), I do think it is the responsibility of the IRS to come up with a simple system to show it, like they already do for the W-2. The tax statement the university provides should suffice - what else is it for?
As for professionalism: They were calm and courteous, but I do not think being told "If you can show X it will be sufficient", and then not accepting X when I provide it to them is professional. This happened twice for the education credit issue. X wasn't some vague general idea, but a very specific document. They literally said "If you can show a bank statement showing payments to the university that will be enough" and then refused to accept it when I provided it to them (switching to "Yes, but how do we know it wasn't for parking?"). It should have been obvious at the outset that the bank statement would not have this information.
IRS enforcement has pretty much been gutted by Congress. For everyone but high earners, it all comes down to automated checks that run at file time. If you don't have any obvious flags (e.g. not reporting income that was on a W2), then the IRS doesn't have time for you.
Its so cute how everyone is afraid of a government agency that is opaque and can charge you fines or jail time for not correctly filling out their documents :)
I imagine it’s jail time for fraud, which is not the same as not correctly filling out documents.
I'm aware that in my current state I just take the standard deduction and call it a day. But the time and chance of having to go back to it due to a mess up is more than $80 imo.
Last year however I got all the way to the end of the process where they revealed I made too much and had to pay. That felt extremely unethical, as the information required to come to that conclusion was available far earlier in the process.
And yet what am I going to do but use turbo tax again. The perceived risk and effort of using a non-automated system to fill them out doesn't seem worth the cost.