Preparing your federal income tax returns could be as simple as verifying that the IRS has the right numbers. But Intuit and other tax software publishers want a slice of the pie. (More)
More Video, Part II: Tax Day Headaches, Courtesy of the Tax Software Industry
This week Morning Feature offers more videos that explore important issues. Yesterday we began with Vox’s Sarah Kliff and Liz Scheltens explaining why most forms of birth control should be available over-the-counter. Today Vox’s Ezra Klein and Joe Posner explore how Intuit and other tax software companies block simplified auto-filing. Tomorrow we’ll conclude with Sen. Al Franken (D-MN) replying to mean tweets after he endorsed Hillary Clinton.
“Taxes don’t have to suck to file”
It’s that time of year again. Yep, the time of year when you open that secure email from the IRS, verify that they got the correct numbers from your employer and other income sources, make sure your dependents and exemptions are correct, and click the “File Online” button. And a day or two later, if you withheld more than you owed, that refund arrives in your bank account by electronic deposit … so you can afford see the live-action remake of Rudyard Kipling’s The Jungle Book.
Not about the movie. There really is a live-action remake of Rudyard Kipling’s The Jungle Book, coming to a theatre near you this week. That wasn’t the prank.
The prank was the part about filing your income tax return by replying to a secure email from the IRS. You could do that, but the IRS isn’t allowed to offer that service … and Vox’s Ezra Klein and Joe Posner explain why:
“This is a very strong value”
Preparing your taxes is expensive. Intuit’s TurboTax Deluxe costs $69, and of course that doesn’t include the value of the time you spend plugging in your own numbers. Or you could schlep that shoebox of W4s and receipts over to an accountant, and then it gets really expensive:
It’s a bit less if you don’t itemize deductions, but it’s still expensive. Yet accountants insist that’s a great deal:
The average cost to prepare a Form 1040 and state return without itemized deductions was $159 this year, also a 4.6 percent increase over the average fee last year, which was $152. This is an 11.2 percent increase from two years ago.
“When you consider the time it takes to complete tax returns, this is a very strong value,” says NSA Executive Vice President John Ams. “The tax code continues to become more complex each year, including some new Affordable Care Act reporting requirements. Professional tax preparers may also be able to find tax deductions and credits that may taxpayers might not notice.”
In other words, the people who make money from your tax headaches … are the primary reason for your tax headaches. But they insist it’s better for you because privacy. Or something.
“It’s all free!”
But there’s good news. If your household income is under $62,000 then you can download and use the IRS’ FreeFile software:
It’s not quite as simple as it might be – you still have to enter your income numbers – but at least you’re not adding $69 or more to your tax bill.
Photo Credit: University of Kentucky Faculty Media Depot
Graphic Credit: CPA Practice Advisor