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submitted 9 months ago* (last edited 9 months ago) by MicroWave@lemmy.world to c/news@lemmy.world
  • Some taxpayers will soon qualify for Direct File, a free tax-filing option from the IRS.
  • The pilot will begin as an invitation-only service before rolling out to certain taxpayers in 12 states by mid-March.
  • In 2023, individual U.S. taxpayers spent an average of $150 to prepare and file returns, according to the IRS.

Eligible states will include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

...

Who qualifies for IRS Direct File

Residents of eligible states with a simple, straightforward return can qualify. The pilot will start with limited types of income, credits and deductions, IRS officials said.

While only certain taxpayers can use Direct File, the bilingual software includes built-in live chat support with IRS assistors.

The pilot will only accept Form W-2 wages, Social Security retirement income, unemployment earnings and interest of $1,500 or less. This means the pilot won’t include anyone with gig economy work or business income.

You must claim the standard deduction to use the Direct File pilot and the system only accepts a few credits — the earned income tax credit, child tax credit and credit for other dependents. The software also accepts tax breaks for student loan interest and educator expenses.

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[-] FlyingSquid@lemmy.world 76 points 9 months ago

This is how taxation should work in the U.S. if we were sane:

  1. The IRS sends you a bill or a refund.
  2. You pay it or deposit it.

The end.

The IRS should be calculating what we owe. We shouldn't be doing that ourselves or hiring people to do it for us. Maybe we could finally get the wealthy to pay their fair share.

[-] Delphiantares@lemmy.world 28 points 9 months ago

Or dispute it . This is how it's done almost everywhere else but the tax lobby have a best interest in this not working this way.

Or....you know bring back home ec classes that teach kids how to survive in the world instead of assuming parents will be able to do it

[-] FlyingSquid@lemmy.world 13 points 9 months ago

Sure, bring back home ec classes like that regardless, but that should also have no bearing on a saner taxation system. The one we have is ludicrous.

[-] Ottomateeverything@lemmy.world 28 points 9 months ago

The IRS should be calculating what we owe.

They do. That's why you occasionally get bills saying "hey you miscalculated by 70 bucks." They already do the work, they just still make us do it too for.... Reasons.

[-] superduperenigma@lemmy.world 13 points 9 months ago

Reasons

AKA Intuit lobbyists

[-] I_Fart_Glitter@lemmy.world 6 points 9 months ago

Once for a whole year I would get a letter saying "You underpaid by $30, plz pay." So I would pay. Then I would get a letter saying "You overpaid by $30, here is check." So I would cash it. Then I would get a letter saying "You underpaid by $30, plz pay..." There were six or seven of those exchanges. I didn't cash the last check and the letters stopped coming. 🤷‍♂️

[-] RegalPotoo@lemmy.world 8 points 9 months ago* (last edited 9 months ago)

As an example of how this could work based on how it does where I live;

  • When you get a job, open a bank account or a shareholding account you fill in a form telling them your IRD number and tax code. There is a flow chart on the back of the form to help you work out what your code is, but it is derived from the amount of income you expect to earn throughout the year and if you have any special statuses that significantly change how you pay tax (eg, of you have a student loan or owe child support)
  • Before you are paid (your income, dividends, interest, profit from share sales etc), the party paying you uses your tax code to determine the percentage tax you owe, then sends the tax plus a filing directly to the IRD on your behalf
  • At the end of the tax year, IRD looks at all the filings, totals up all your income, totals up all the tax you've paid, checks if you are eligible for certain tax credit, and works out if you've paid the right amount of tax
  • You get notified of the outcome, and get a chance to correct it (eg, if you've made charitable donations and want to claim a credit based on that etc)
  • Once the filing is finalised (which happens automatically if you do nothing) you either get a bill in the post, a cheque, or the money deposited directly into your bank account if you've nominated one - unless you owe them less that $10, in which case you get a letter saying that they've written the debt off and you owe nothing

No muss, no fuss. If you've got an interest in a trust or own a company then it gets a bit more complicated and you might need an accountant to file for you, but for 95% of people it's free, happens automatically, and they aren't stuck with a big bill at the end of the year

[-] HubertManne@kbin.social 3 points 9 months ago

yup. we should all be recieving a 2040x with the left hand side filled out already and we can optionally make the changes in the right hand side if we think its wrong.

[-] kingshrubb@lemmy.world 5 points 9 months ago

Agree. Then TurboTax and other tax preparers wouldn't be able to rip us off to the tune of billions of $ too.

this post was submitted on 28 Jan 2024
258 points (98.9% liked)

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