Tax rates are at historic lows

Ben Peck of The American Prospect has a list of the “Top Ten Tax Facts.” The whole thing is worth reading — as is the source material Peck links to. Here are some highlights:

1. The government has collected less in taxes as a proportion of the economy in the past three years than it has in any three-year period since World War II, and tax rates are at historic lows.

… 4. Corporate income taxes for the past three years have hovered at just over 1 percent of GDP, lower than for any three-year period since World War II. The average for OECD countries is 3.5 percent.

… 10. Only two OECD nations collect less revenue as a percentage of GDP than the United States — Chile and Mexico.

So if you love lower taxes so much, just move to Mexico already.

If you prefer showing to telling, Chuck Marr of the Center on Budget and Policy Priorities has the “Top Ten Federal Tax Charts.” Marr’s charts illustrate the facts in Peck’s list. Tax rates are at historic lows.

This is a fact. It is a true thing. You can look it up. But as with many facts these days, this fact is rejected by people who feel that facts are only factual if you “believe” in them.

Thus we have one of the stranger aspects of American politics just now: Millions of citizens angry with President Obama for raising their taxes despite the fact that he actually lowered them.

I know this isn’t simply perverse stupidity on the part of these citizens. These folks have been lied too aggressively by a powerful propaganda machine. And those with employer-provided health care might be confusing the bigger bite that premiums are taking out of their paychecks with a bigger bite from taxes.

But still, reality has to count for something. And the arithmetic here is not complicated.

So at some level it really is just stupid and perverse to blame Obama for higher taxes when he has lowered them. Thus at least part of the mandatory response to these folks is to point out — as nicely as possible, if they will allow nice as an option — that they need to shut up, wake up, and move back to reality. Spending your days seething with rage about something that is the opposite of true is not a recipe for personal happiness. (See also: Anti-tax anger directed at the ginormous tax-cut package of the stimulus-providing Recovery Act.)

* * * * * * * * *

Taxes are the one bill I have that I’m required to calculate myself. My Internet provider, my wireless carrier, my electric utility, my water company, my insurance company and the bank the holds my mortgage all just send me a bill. So does the township for our local taxes.

Yet the state and the federal government both require me to fill out a set of forms calculating my own bill. This seems superfluous, since both the state and the federal government will also be doing the same calculations in order to double-check that I’ve done this properly, threatening costly consequences if I get it wrong. So why can’t they just send me a bill?

Matt Yglesias explains why: We have to calculate our own tax bills because it’s more difficult and complicated that way. “Who Wants Taxes to Be More Complicated?” The short answer is that the tax preparation lobby does, and more importantly so do politicians who base their careers on railing against taxes:

Why don’t you just lie on your taxes? You don’t lie because you’re worried that the IRS will catch you. And why do you worry about that? Because all the various entities who’ve paid you over the course of the past year have to submit paperwork about your income. Your employer, your bank, your stock broker, etc. — record and transmit almost all relevant information about your money to the IRS, meaning that if you lie you’ll get caught.

But by the same token, the IRS could simply collect all this information and send you a tax bill. You could read it over, sign at the bottom, and either include a check or wait for your refund. It wouldn’t be fun, exactly, but it would sure be simple.

Needless to say, taxpayers should have the right to dispute the veracity of the IRS’s calculations and submit their own form. And some classes of people are going to routinely have unusually complicated tax finances. Journalists, for example, often have miscellaneous travel expenses related to freelance assignments. People running substantial small businesses will still need accountants.

But for the vast majority of the population, most of the pain of tax compliance could be eliminated by a few keystrokes at IRS headquarters. So why don’t we do it?

Two reasons. One is lobbying by the tax preparation industry to discourage states and the feds from developing easier tax-paying systems, as California recently did. The second is lobbying by anti-tax conservatives. When the Golden State implemented its ReadyReturn system, it did so over the objections of Grover Norquist and his anti-tax pressure group Americans for Tax Reform, which fears that if taxes become less annoying voters might be less unhappy about paying them. After all, if the government did something to make your life easier it would be harder to tout the difficulty of tax compliance as a reason to abolish the progressive rate structure.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    For all the people who carp about lawyer bashing, I note that one reason why the debate over taxes continues is because quite a sizable chunk of the people writing tax laws happen to be lawyers turned politicians. You can’t tell me that’s desirable complexity.

    Canada has been making small steps toward making it easier to compute your taxes, although one thing that used to be done which stopped in the 1980s was you could get a numerical table that told you exactly how much income tax you ought to have paid given a certain income level.

    One program I’ve been swearing by for a long time now, and I don’t know if there’s a USA equivalent, is this: TaxMan. Its only deficiency is that you have to file on paper, which takes longer since you need to mail stuff in, but it’s totally free and is reasonably user-friendly if you have prior experience with the way the tax system works.

    But really, the advent of personal computers in the 1980s should have made it easy for governments all over to roll out an infrastructure of easy tax computation for people: take your forms to Revenue Canada’s local office (or the IRS’s), and a friendly perosn working there will punch your numbers into the appropriate screens. Fifteen minutes later, you sign a printout and you’re golden.

    Instead it took until 1995/1996 for the Canadian (dunno about the US) government to issue rulings that allowed for people to print their own tax forms with tax prep software which is the greatest ripoff like EVER because you pay $30 for one program, NOT USABLE FOR ANY YEAR FOLLOWING, since of course tax rulings and brackets change from year to year. (>_<)

    So, yeah, fun times, right?

  • Emcee, cubed

    Two reasons. One is lobbying by the tax preparation industry to
    discourage states and the feds from developing easier tax-paying
    systems, as California recently did. The second is lobbying by anti-tax
    conservatives.

    Um. Third reason. The IRS doesn’t actually have ALL the information
    needed to do someone’s taxes. Yes, they might have the majority of your
    income reported to them, but a lot of other info isn’t. And maybe they
    could get some of it, if they contacted the right agencies, but that is a
    lot of extra work, which would all have to be done well in advance to
    get it done in time to send you a bill, then have it paid. For instance,
    did you get married/divorced/have a child this year? Those things drastically change your tax bill, but the IRS is not notified of changes in status. Did you make a contribution to charity? Unless a suitably large amount went to one charity, that isn’t reported. Did you have a cash transaction, such as gambling winnings under a certain amount, or payment for a job you did for maybe a neighbor or friend? That income isn’t reported, but should be included. And there are lots of other examples. The IRS may seem omnipotent, but that’s hardly true.

  • christopher_young

     And yet in other countries the overwhelming majority of people who aren’t self employed have no trouble paying taxes, and paying them accurately, even if they have more than one job. It can be done. Most years of my working life I never even filed a tax return. On the occasions I did, it was a very straightforward document.

    Of course things will be more complex for those who are self employed, but let’s remember the 80/20 rule here.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

     Ok, but a lot of that could be simplified right out if tax rates for anyone earning less, than, say, $60k a year were cut sharply and everybody required to file as individuals. In Canada, there is no true “joint preparation” for married couples in which one tax form is sent in. Instead, both members of the couple send in their own forms, and under the existing tax law, indicate how their deductions should be transferred between each other.

    Would anyone really complain if the marginal tax rates went 5% $20-$30k, 10% $30k-$50k, 15%, $50k-60k ?

    I’d say the loss of a lot of deductions would be worth the drop in taxes at the bottom end, balanced by higher marginal tax rates at the top end.

    At that point there’d be no excuse for the IRS needing you to provide your W-2 when they get a carbon copy of it from your employer anyway.

  • Magic_Cracker

    Another thing northern Mexico has going for it that should be very appealing to libertarians are lots of guns and a fierce, laissez-faire business climate. Sure, if you’re a small business-owner whether or not you are involved in the drugs, guns, and/or slave trade, you’ll probably be paying protection money to Los Zetas or some other gang group of private security entrepreneurs, but it sure beats paying taxes, amiright?

  • Emcee, cubed

    And yet in other countries the overwhelming majority of people who
    aren’t self employed have no trouble paying taxes, and paying them
    accurately, even if they have more than one job.

    As do people in the US. The amount of people  who actually deal with the IRS in more than a “that’s who I send my tax return to every year” way is extremely small.

    And yes, it would be nice and wonderful if the US had a simpler tax code. But we don’t. And it doesn’t look like we will any time soon. (Which right now is a good thing, because the only plans I’ve seen put forth lately to “simplify the tax code” consists of having the rich pay less by making the middle and poor pay more.) We have to deal with the tax code we have at the moment. And with the tax code we have now, the IRS can’t just send a bill. They need more information from people, most of which is taken at face value unless there is a glaring red flag to make them investigate.

    At that point there’d be no excuse for the IRS needing you to provide
    your W-2 when they get a carbon copy of it from your employer anyway.

    They don’t require it now. I think they still ask for it when you file a paper return, but the return won’t be rejected if you don’t. And since a large portion are now e-filed, sending in a W2 doesn’t happen very often.

  • http://www.facebook.com/profile.php?id=507398586 Tim Fargus

    If you’re taking the standard deduction and just filing your W-2, then there’s no reason for the IRS not to do this calculation for you and send you a bill. If it’s at all more complicated, then you can of course reserve the right to file yourself, or you can dispute the IRS’s calculations, but there’s no reason that a simple tax filing ought not to be handled by the IRS, rather than being handled by you, then by the IRS, then the two compared.

  • http://musings.northerngrove.com/ JarredH

    …you pay $30 for one program, NOT USABLE FOR ANY YEAR FOLLOWING, since of
    course tax rulings and brackets change from year to year.

    In fairness, the latter doesn’t immediately necessitate the former.  The yearly changes could be accounted for by providing free (or even low-priced) updates to the already-purchased software.  The H&R block packages already provide updates to the current year’s software throughout the tax season.  It would take little extra effort for them to provide an update next year that works with the software I bought this year.

  • http://musings.northerngrove.com/ JarredH

    On the complexity of filing taxes…I’m just glad that I’m no longer living in PA and working in NY.  Having to do a Federal return, a return for two states, and the PA municipality return got tiring after doing it for seven years.
     

  • Splitting Image

    Personally, I think the best argument for doing your own taxes is that it forces (some) people to look at their own financial situation and actually try to understand how much they are paying in taxes.

    If you think that the problem of people thinking their taxes have gone up when they have in fact gone down is bad now, wait until you see how bad it would get if most people did not have to calculate their own taxes every year.
    I’ve had to argue with people for years over whether or not that little bit of overtime they worked made them pay more in taxes than they made, and in nearly every case, the problem turned out to be that the nimrod in question sent everything to a tax preparer to do and had never actually looked at a tax form long enough to understand how the annual taxes were calculated. Nationalizing the tax preparation business (by simply having the government do it) would magnify that problem considerably.

  • http://musings.northerngrove.com/ JarredH

    Personally, I think the best argument for doing your own taxes is that
    it forces (some) people to look at their own financial situation and
    actually try to understand how much they are paying in taxes.

    I’m not so sure about that.  I do my own taxes, but I couldn’t tell you how what I paid in 2011 compares to what I paid to what I paid in 2010.

  • Apocalypse Review

    Yeah, but that’s not now they worked it back then. It’s an easy racket, too, since people who don’t know about free alternatives will buy the program, use it once, and then never again.

  • Apocalypse Review

    Another issue about taxes is that deductions are usually calculated as though every paycheck were multiplied through the whole year. This really shafts people who work only part of the year and have to wait ’till April to get their refund, and also people who get a raise after a tax cut set to take effect mid-year.

  • http://twitter.com/mattmcirvin Matt McIrvin

    In the days before TurboTax and the like, my dad used a commercial product that was just the 1040 and associated worksheets converted to a spreadsheet.  I think it was for Lotus 1-2-3, and though the output in those dot-matrix-printer days wasn’t as pretty as what Intuit produces, the IRS was actually willing to accept the printed forms.

    It wasn’t free like TaxMan, and it probably wouldn’t do anything to maximize your return under complicated tax situations, but the simplicity of the concept was admirable.

    As for the IRS figuring your taxes for you, they actually will do it under certain conditions:

    http://www.irs.gov/publications/p17/ch29.html#en_US_2011_publink1000174225

    but it’s a pretty bare-bones service, and many people obviously won’t pay the lowest tax they could this way.

    Speaking personally, when I was doing my taxes on paper, I always found Massachusetts’ tax forms more frustrating than the federal ones.  I think it was more a matter of physical design than anything else.

  • http://www.facebook.com/profile.php?id=507398586 Tim Fargus

    Another issue beyond that is that if you have two jobs, the taxes on each are calculated as though it’s your only job. For the last 6 years, I have ALWAYS owed money come tax time because I only make a couple of thousand dollars a year at my tutoring job, and they deduct almost nothing.

  • Daughter

     You may  not remember your total tax burden from the previous year, but don’t you know whether you received a greater or smaller refund, or wrote a larger or smaller check?

  • Daughter

    TaxACT online offers free tax prep for most Americans, and only cost $10 if your tax situation is complicated.

  • Daughter

     You can adjust for that by revising your W-4 and asking them to take more money out.

  • http://musings.northerngrove.com/ JarredH

    Nope.

  • http://www.facebook.com/profile.php?id=507398586 Tim Fargus

    But you can’t ask them to take a percentage out. You can just ask them to take an amount out, and my second job has very, very sporadic hours. It’s just never really been an option for me, because sometimes for several months I won’t work at all, and sometimes I’ll work quite a bit.

  • Donalbain

    Does everyone have to file taxes? I thought that it was only people with complex situations like the self employed, or freelancers. Don’t you have an equivalent of PAYE?

  • Daughter

     OK, why not? I’m hardly a math genius, and I don’t know the exact figures, but I could tell you whether or not I owed or got a refund the last few years, and give you a rough estimate of the amount owed/refund amount. Plus, you’re supposed to have your previous year’s taxes in front of you when you do this year’s.

  • http://musings.northerngrove.com/ JarredH

    Every individual or couple who makes above a certain amount (the exact breakdown for the 2011 tax year can be found here) has to file a tax return with the federal government.  I don’t know how various states do things.

  • Daughter

     Plus, you’re a software engineer. I would assume that means you have some facility with numbers.

  • http://musings.northerngrove.com/ JarredH

    Are you really asking me to justify myself to you?

  • Daughter

     Yes, I am. We’ve talked a lot on this blog about people who are willfully ignorant, when informing themselves isn’t that hard to do. According to the IRS, you should hold on to 7 years of prior returns. Whether you do your taxes yourself or have someone else do them, you’re supposed to have last year’s taxes in front of you so you can note anything that’s changed. You’re an intelligent person.  It’s not that hard to know what you paid last year.

  • http://musings.northerngrove.com/ JarredH

    As far as I’m concerned, you have crossed a line.  Whether or not I know how my tax burden compares from year to year neither breaks your arm nor picks your pocket.  Therefore, I maintain that is none of your business.

    Furthermore, I find your comments to me on this matter self-righteous and condescending.  Please desist.

  • Michael Cule

    Umm, perhaps I’m not understanding the situation but:

    1) Most people in the UK don’t file a tax return at all. If you’re employed and have no investments beyond one of the tax free individual savings plans then you’re not going to have to fill anything in. HM Revenue and Customs have all the details they need already. We seem to be saying that everybody in the US has to fill in a form. Is that the case?

    2) I fill in a form and do it on-line, which is not only the most convenient way to do it but also gives me the latest deadline. I’ve  never needed to employ an accountant nor purchase special software. Admittedly my tax affairs have always been quite simple.

  • http://musings.northerngrove.com/ JarredH

     1)  I posted a link to a page describing who has (had) to file a 2011 tax return with the U.S. Federal government upthread.  The simple answer is “everyone in the U.S. who receives an income they and/or their family can actually live on has to file.”

    2)  The complexity of the U.S. Federal tax return depends on a number of factors.  For many of us (like those of us that have pretty straight-forward income sources and take the standard deduction), it’s pretty quick and easy to fill out the form.  For other people (people for whom it makes sense to itemize their deductions, own farms, own their own business, etc.), it gets more complicated.

  • Daughter

     What I wrote to you is hardly comparable to what Fred wrote above:

    Thus we have one of the stranger aspects of American politics just
    now: Millions of citizens angry with President Obama for raising their
    taxes despite the fact that he actually lowered them.

    I know this
    isn’t simply perverse stupidity on the part of these citizens. These
    folks have been lied too aggressively by a powerful propaganda machine.
    And those with employer-provided health care might be confusing the
    bigger bite that premiums are taking out of their paychecks with a
    bigger bite from taxes.
    But still, reality has to count for something. And the arithmetic here is not complicated.

    So at some level it really is
    just stupid and perverse to blame Obama for higher taxes when he has
    lowered them. Thus at least part of the mandatory response to these
    folks is to point out — as nicely as possible, if they will allow nice
    as an option — that they need to shut up, wake up, and move back to
    reality.

  • http://musings.northerngrove.com/ JarredH

    I asked you to desist. This will be my last response to you.

  • http://lliira.dreamwidth.org/ Lliira

    1) Everyone in the U.S. has to fill out a form if they have income. You can legally skip if you know you’re not going to owe on taxes, but you really shouldn’t, because lots and lots of things look at your previous year’s tax return. Plus the only way to get a refund is to file.

    2) We do have the ability to do it online, but that only really works well if your taxes are very simple anyway. Plus it can become a pain too, because they need to send you something that you need to send back within a certain time frame, and if your post office is extremely slow (as mine is where I live), it’s a crunch.

    Everyone I know uses an accountant if they’re past the “single, no kids, one part-time job” stage. Because calculating taxes is a massive hassle. 

  • TheFaithfulStone

    Speaking as one of the few people who has to deal with the IRS every year, let me tell you that they are an absolute PLEASURE to talk too.  I mean that seriously  - I think we should make all these tax whiners call the IRS and ask a question (it can even be a dumb question.)  They’ll speak to a nice man or woman who speaks perfect English and is not reading from a script.  They’ll explain exactly what you need to do.  They’ll even anticipate the next few questions you might ask and answer them!  Since they have your tax return information up and in front of them, they’ll generally take a glance at it and give you some free advice if it looks like you need it.  They are empowered to solve your problems, and if they can’t, they will tell you exactly what you need to do to get it resolved, and explain why they can’t solve it.

    As far as “phone” customer service goes the IRS is an example to be emulated.

    They could do something about their wait times, but I suspect that has more to do with the tax whiners constantly cutting their funds for that sort of thing.

    If you gave the me choice between dealing with AT&T or the IRS, I would call the IRS every single time.

  • http://musings.northerngrove.com/ JarredH

    That’s quite a difference from the “disgruntled civil servant” stereotype, isn’t it?

  • TheFaithfulStone

    But still, reality has to count for something.

    Bristol Palin nearly won DwtS.  There’s an old adage about what to do “if the customer is wrong” – and there’s probably some similar guiding principle for being a “conservative” (which like “literally” means the exact opposite of what it literally means.  It’s a contranym.)

    1) If you’re in the tribe you’re right, if you’re wrong, you’re not in the tribe.

    IOKIYAR

  • Kirala

    It’s not that hard to know what you paid last year.

    I can’t speak for Jarred (although I can understand his response), but for myself, while I could easily find out what I paid and received in return (I do keep the forms), I couldn’t tell you without digging through the Giant File Box that tends to open three times a year (once at tax time, and around two other times to actually file all the documents/bills/etc that have been piling in the inbox).

    The number doesn’t stay in my head because 1) it’s a return, not a payment, for me; I never have to write it out (computer filing!) 2) it’s returned via direct deposit, and while I do check my finances, it’s only at an eyeball level (I could estimate to the nearest $500 for you, but no better) and 3) it’s apples to oranges, as my employment situation has not been stable for years and therefore my tax rates and situations vary accordingly.

    #3 is the chief reason why I haven’t tried to notice my exact taxes. #1 is the chief reason why I don’t care overmuch. The whole eyeballing-finances has worked for me at an income level most consider poor, with money to spare; I figure I could afford to be taxed more to support social services. I’m only now considering a detailed budget because I want to know how far I can push my margin to make my now-active student loan repayment move faster. That is, when I wish to become involved to change my situation, I have a need to educate myself. I think willing ignorance worked okay when the status quo was okay for all affected by my decision.

  • Apocalypse Review

    Canadians also almost always have to fill out a tax form, particularly as we’re encouraged to do so in order to claim the GST refund benefit (a quarterly payment which, for low income people, works out to around $60-100/quarter and can be a real break when you get the $$) and some other benefits as well – provinces without a Harmonized Sales Tax sometimes have a one-time provincial credit for sales taxes which means an extra $50 or so in your pocket come refund time.

  • Apocalypse Review

    TBQH how much of that is actually honestly due to Republicans bashing the IRS about 1997-1998 and passing that “Taxpayer Bill of Rights” thing? It kills me to have to admit they’re like a stopped clock, but in that particular situation…

  • http://www.facebook.com/people/Alan-Alexander/502988241 Alan Alexander

    As far as I’m concerned, you have crossed a line.  Whether or not I know
    how my tax burden compares from year to year neither breaks your arm nor
    picks your pocket.  Therefore, I maintain that it is none of your
    business.

    Furthermore, I find your comments to me on this matter self-righteous and condescending.  Please desist.

    An interesting comment, coming as it does in response to a blog post about people who are not only willfully ignorant about their own tax situations but who persist in falsely believing that their taxes have been raised by our Kenyan-Marxist usurper President and who aggressively pursue tax cuts for the rich that will devastate social services for the nation’s most vulnerable citizens.  Viewed in that sense, it is quite possible that you not knowing your own tax burden does break arms and pick pockets, if only metaphorically. Out of curiosity, do you think Obama has raised your taxes? And do you favor the various GOP plans that will raise taxes for most Americans and slash social spending in order to finance tax cuts for the super-rich?

  • Ursula L

    If the requirement to fill out tax forms results in make-work for professional tax preparers, then I think it is worth remembering an earlier post (sorry, I don’t remember the name) when Fred pointed out that in a recession where the biggest problem is a lack of work for workers who are willing and able, making work is a sensible response to the shortage of work available.  

    When there is a shortage of something, you make more of it.  

    But it would be better for the economy, I think, if taxes were high enough that the government could hire and train enough people to provide necessary legal tax advice,  giving them public sector jobs with the associated benefits and security. Rather than relying on private companies that hire and barely train a bunch of temps for two months of the year.  

  • http://musings.northerngrove.com/ JarredH

    but who persist in falsely believing that their taxes have been raised by our Kenyan-Marxist usurper President

    This does not describe me.

    Out of curiosity, do you think Obama has raised your taxes?

    Allow me to answer this by quoting myself:

    I couldn’t tell you how what I paid in 2011 compares to what I paid to what I paid in 2010.

    What part of  “I don’t know how the amount I pay in taxes from year to year” was unclear, exactly.

    So the answer to your question — which I think should have been obvious from my the statement I just quoted — is, “I don’t know.”  I will now amend that statement by adding that I really don’t care, either.  I don’t complain about how much taxes I have to pay.  The closest I ever came was the year I cashed in some stock options.  Even then, I wasn’t complaining about how much taxes I had to pay but lamenting that I didn’t have more withheld up front when I cashed in the options.

    And quite frankly, your questions strike me more as assumptions and/or accusations.  Ones that do not actually apply to me.

  • http://pulse.yahoo.com/_XXCAJ2ASBA3KJGMCSLD6VBIBNM Isatu Elba

     

    Viewed in that sense, it is quite possible that you not knowing your own tax burden does
    break arms and pick pockets, if only metaphorically.

    I think that whole aside is kind of veering away from what I think the original poster’s point was — that it’s less likely for someone to notice a change in their tax rates if someone else prepares their tax return for them and they never have to look at the paperwork.

    Obviously it’s still possible for someone to prepare their taxes on their own for years and yet have no idea if they got a refund or actually still owed money (or they might have simply forgotten from last year — perfectly understandable) but in that scenario if the person really was being intellectually honest if they were concerned that their tax rates had gone up they could go back and check since they have the paperwork in a box somewhere. If the government prepared their taxes for them and just sent them a check, that information would be somewhat harder to come by even for someone who was genuinely curious and trying to refresh their memory. No one is saying (I think) that everyone who does their own taxes remembers everything about them off the top of their head, but the argument is that having that stuff physically near you makes it easier — if you’re worried about changes in tax rates — to check to see if you really did pay a higher tax rate this year than the last year.

    (Of course, all of this is ignoring the fact that you can look up most of the information about the tax code on the Internet anyway, making it hard for someone to seriously argue that the stimulus package was a tax hike or that Obama has raised the income tax rate, but that’s a whole nother issue!)

  • Cathy W

    The availability of online filing is probably one area where it’s quite accurate to say that the tax-prep-software companies have influenced policy. The IRS doesn’t allow e-filing through its own site; it partners with private tax-prep companies. You can generally file for free if you qualify for the “EZ” form – single, income under a certain amount, no dependants, claiming only the standard deduction.

    My situation isn’t much more complicated than that – I still claimed only the standard deduction, which is where things get hairy, but TurboTax wanted to charge me $49.95 for e-filing my federal return and an additional $30 for a printout to mail to the state. I’ll file on paper, thanks.

  • VMink

    That’s true irony, isn’t it?  The IRS has taken great pains to be as customer-friendly as possible, and it shows.

    Know who else is pretty painless to work with?  The NY and NV DMVs.

  • g127

     I live in the Netherlands now, and they started filling out you’re online-tax forms for you. You just have to check if there are any mistakes and press enter. It took just 10 minutes this year. The IRS might think about investing more in ict. It might save the tax-payers a lot of time (and money).

  • Daughter

    I have used TurboTax in the past, but this year I kept seeing ads for the free online software TaxACT. I’m married, I filed jointly, I have a kid, and we have multiple forms of income, and it was free for us to e-file with TaxACT.

    We later had to amend our return, and so we had to upgrade to premium. The upgrade was $9.95.

  • Daughter

     During the Clinton admin, I remember a series of congressional hearings were held in which people testified about horrible treatment they had received at the hands of the IRS. Post-hearings, congresspeople vowed to reform the agency, and a series of reforms were put into place. We’ve benefiting from the results of those.

  • hapax

     

    Everyone I know uses an accountant if they’re past the “single, no kids,
    one part-time job” stage. Because calculating taxes is a massive
    hassle.

    And this is attitude that I really, really hate.

    Not that it isn’t true, mostly.  But I do my own taxes, spouse does his own taxes, and as the forms increase in complexity and decrease in accessibility (it is very very difficult to get your hands on actual *paper* forms anymore, and the online ones require memory hogging software to use)  it has become extremely difficult to get answers to simple questions from those who should have the duty to provide them.

    I don’t know how many times I’ve approached my bank and my City’s HR department with a question about something shown on my w-2′s and 1099s (those are the forms that are used to report wages and investment income (such as interest) both to taxpayers and to the IRS), only to receive a blank shrug and a stare and a “I dunno, ask your accountant”.  The response that I don’t HAVE an accountant is received either with incomprehension or rudeness (“Well, why don’t you get one?”  Oh yeah, in late March?  Any accountant who isn’t swamped up to zir eyeballs by then pretty much *must* be incompetent)

    The assumption that everyone not only has the wherewithal to afford an accountant, but also the time and information to evaluate and hire one, and the willingness to entrust their private financial affairs to a stranger, implies massive, massive doses of privilege.

  • http://lliira.dreamwidth.org/ Lliira

    No, actually, it doesn’t. An accountant costs far less than they save in both time and taxes. I was personally inspired to start using an accountant because of my friend who did in college — she was in college full-time, in a program in which she had to do a full-time internship, and she was working a full-time job to pay for college, and the small amount of money she spent up-front on paying an accountant ($30 iirc) was more than worth it in terms of the money, time and hassle she saved. 

    You know what implies massive doses of privilege? The idea that everyone can do their own taxes. The friend I’m talking about is brilliant. And dyslexic. She’s always had serious problems with math. I didn’t used to have problems with math until I threw out my back. Now I can either choose to be in unbearable pain, which isn’t conducive to thinking, or take pain medication which makes my thought processes scattered, my memory crap, and my precision with language a mess. What it does to my math skills — well, the other day I had to think for a second about what 2+2 equals.

  • hapax

     

    Know who else is pretty painless to work with? 

    Despite the slang expression “going postal”, I have always found postal workers to be helpful, friendly, and cheerful.

    The folks at the property tax office were delightful, too.  And the Elections Commission were both witty and scary-competent.