I think you're missing the point. The IRS has already received your 1099/W2/etc and thus it knows (a) your income, and (b) how much in taxes you've already paid. By then having the IRS start your tax return for you, you would no longer have to fill in that info. The IRS makes free forms available already. Besides, are there actually people so stupid that they would give their SSN/info to a site like that?

"Besides, are there actually people so stupid that they would give their SSN/info to a site like that?"

Honest question. Are you saying that this particular site is less secure or all online e-filing services less secure? This is one of the options recommended by IRS[1] for e-filing.

[1] - http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-...

All e-filing services (include free file fillable forms) result in a third party seeing your data on the way to the IRS. This is true for both online and offline tax preparation software (e.g. TurboTax).

I think many of us here don't get paid by W2 or by 1099. We are compensated in different ways which don't require those types of filings (e.g. K1), in which case we do need to fill out forms.

I can't speak specifically for the group here, but the vast majority of US taxpayers by a large margin _are_ compensated via W-2 or 1099. Isn't that who it should be optimized for, rather than outliers or exceptions?

To clarify, the vast majority of US taxpayers that are compensated via W-2 or 1099 are eligible to file under 1040A or 1040EZ, both of which are much simpler and easier to deal with (and, incidentally, all of the major tax preparers like H&R Block and Intuit offer free versions for those use cases).

The portion of that cohort that file 1040 (generally those that make over 100K and have situations that make itemized filing more efficient than taking standard deductions) is pretty small.

Definitely ... until someone finds tax advantages to being in a different category and people gradually "reinvent" themselves as being in that category.

You were outraged at hedge fund managers classifying their income as interest (15% tax) rather than "earned income" (~35% income tax)? Well, wait until the income tax goes back up to 50+%, and see how many non-"earned income" ways there are to compensate employees...

I don't understand your example, the originator of a k1 would file it with the IRS, just like for a W2 or 1099.

There are an incredible number of moving parts with circumstances that may seem trivial, such as a master limited partnership or a foreign company paying dividends. Unless the entire world can standardize on taxes, these complications can't go away because not all information is properly reported or reported in a timely manner

Sure. But a system that only addressed the needs of 100 million people with simple taxes might still be a good idea (I realize that the thing exists. Free File is urged on by the government and has wide reach. I don't like that it is roughly designed to prevent the IRS from developing any sort of direct servicing).

You are looking at a group of a small percentage of that (at most a few million people) who make enough that they are not eligible for 1040A/1040EZ (the 1040A cutoff is roughly 100K) yet don't have particularly complicated tax situations. That pales in comparison to the people who can be catered by the free tax systems.

I'm saying that I don't like the current free file implementation. Who it covers (or not) isn't particularly part of my dislike for it. I'm admitting that it covers a great deal of people.

No, it's not about doing your taxes electronically.

It's about the IRS pre-calculating everything for you, so you don't have to input anything. You just say "yes, that's right", unless there are errors or additional information needed.

Exactly. We have the ability to do this, and private companies lobby against it (and win!) to protect their profit.

What the fark.

So, you're comfortable with just trusting the government to tell you what you owe? I'd prefer to check the math myself.

> I'd prefer to check the math myself.

Read the article. That's the idea. Check the math if you want, file your own paperwork if you want.

Login to IRS website, be shown all your data.

Is this correct? Yes. No. buttons. Workflow is present to deal with incorrect data.

The data is already submitted electronically by employers, brokerage/retirement asset management companies, states, etc. Why should I have to pay a private company (I'm looking at you Intuit) when the IRS should have the ability to provide the same service FOR FREE.

Government doesn't know your business expenses and various deductions (unless you want to stream your cash and credit card transactions directly to the IRS)

Sweden already has a form of this. There is a black box many retailers need to install which submits all of their daily transactions to the government.

Sure, perhaps we should also station TSA outside every retailer and have them search our bags. That sounds like a privacy nightmare.

Of course it is. I would never live in Sweden because of things like this. I was just pointing it out.

Response to niggler: Yeah, I'm cool streaming them my business transactions via Yodlee/Mint/my bank if it streamlines the process. They can already get the data if they want it (audit, etc).

Have you been through an audit? They don't just arbitrarily ask for all your records; they have questions about a specific number or set of numbers on your tax return and they ask you to substantiate it.