Millions of Americans mess up their taxes, but a new law will help

Taxes in the US are unnecessarily stressful. I remember going to H&R Block and being sent home to find some piece of supporting documentation because it was “really important”. I turned the whole apartment upside down but wasn’t able to find it. Went back to the tax preparer in a state of high anxiety. When I asked what would happen if I couldn’t find the document and was told the impact on the final assessment could be as high as $80. Would have gladly spent 10x that to avoid the stress.

Dare one ask where all of the AI proponents are when the subjects of public budgeting and taxation arise?

This is by design. Income tax filing is a long-solved problem in much of the first world.

One of the easiest ways to convince the public that the government is inept and wasteful is to make it as difficult to do the necessary as possible. If politicians cared, this wouldn’t be an issue.

H&R Block isn’t exactly the top tier accounting option. Not sure what you were expecting. It’s like going to McDonald’s and being disappointed at the food quality.

Politicians do care. Unfortunately, the ones who care are the ones who want taxes to be painful and complicated, to benefit the TurboTax lobby and/or to keep people constantly viscerally aware that they're paying taxes at all.

This is the result of decades of Republican lobbying, legislation and outright sabotage. The philosophy, openly advertised by Grover Norquist's Americans for Tax Reform, goes like this: nobody likes taxes. So if people find the filing process difficult and stressful every year, they will be constantly reminded of this fact. This will in turn make them more open to suggestions and propaganda along the lines of taxes being something that must be fought tooth and nail at every turn, because let's face it, who wants the tax code to become even more complex?

In contrast, if the process is streamlined every year, most people won't even pay attention to how much they pay in taxes - which isn't great if your ultimate goal is to keep government as small as possible.

Basically nothing is going to happen to you if you make a best effort. So many people focus on getting it correct and pay hundreds or thousands to do so. I've filed my taxes incorrectly by accident for years and the IRS just sends me a correction and the new amount

It's to H&R Block's benefit to make you feel that taxes are stressful and you need 3rd party help, though. That you were stressed out about this interaction is H&R's fault; not the law or the IRS.

There is shared blame here.

The ease in which you can get away with these tactics ad infinitum is starting to make me a pessimist. It feels like it takes almost an entire population of unified people, that are diligently advocating on behalf of themselves, to compete with a ruling class that has the resources to stay on the offense forever.

The ruling class doesn't even have to actively communicate and conspire with one another (although they do). Their independent attempts to undermine and control government furthers the agenda of all private businesses.

> the impact on the final assessment could be as high as $80

That's the financial impact. Depending on what you're missing, the nonfinancial might be opening yourself to perjury, because you're knowingly claiming a falsehood as a fact on a tax return (even if it's financially in the government's benefit)... never mind potentially screwing up future tax returns in the process.

The average American shouldn't need top tier accounting to file their taxes.

IRS should create a spreadsheet with irs forms so the user types in their numbers and the calculations are automatic.

An intern or 2 could do this for the entire nation to benefit!

The IRS Direct File was shut down by the current administration. And no, it was way more effort than what two interns could do. https://github.com/IRS-Public/direct-file

The average American can file for free, or at least it was possible in the past.

They could also learn to file their taxes, as well as simple tax planning, in a very short video.

It would help if Americans educated themselves on the basics of taxes. They would realize quickly how W-2 income employees pay a very high tax rate when you factor in FICA vs high wealth individuals who pay little to no FICA or income taxes. Add in the benefit of compound interest, cheap margin loans, and you have an incredibly unfair system. It's also why many wealthy individuals argue for a "smaller" government & less taxes. They travel private, go to private schools & prefer to avoid anything "public".

All this is with just the very basics, not counting step up basis, trusts or anything slightly complicated.

I'm not joking, in Australia the tax "filing" takes like 2 mins, you literally go, next, next, look at the details, "yep looks correct" put in your claims, and then submit.

You are all done.

Unless you have something wack going on its not even a process. I have had signups which are more complicated then it.

American taxes on the other hand mega suck, and have 9000 pitfalls.

I found myself in a weird corner of tax filing because I did equity crowdfunding (startup investing in amounts probably smaller than worth it.)

This results in a lot of K-1s, which tax preparers charge you like $500 a form for, except all of mine had values like $2.

Luckily you just kind of do it halfway right in TurboTax and it works out.

Tax returns are best effort. It's much less of a crime to get one wrong than people think it is.

Finland doesn't even ask you to approve. They send you a suggestion and if you do not amend it by deadline they take it as it is.

And amending is online form where everything is clearly explained, links to documentation. And longest time it takes is actually to look up numbers from your own records.

> It's to H&R Block's benefit to make you feel that taxes are stressful and you need 3rd party help, though. That you were stressed out about this interaction is H&R's fault; not the law or the IRS.

H&R has lobbyists to ensure taxes are complicated and stressful.

In the US, property tax typically works that way for many people. You get something in the mail that says this is what your tax will be. If you happen to have a loan for your house, the bank in charge of your loan handles it.

The only opposing political argument I've heard is that if income taxes were this simple, many people would be overpaying. I think that argument has many obvious flaws. Unfortunately few US citizens demand anything of their politicians on this topic or other topics that would dramatically improve their lives. Instead they care more about vanity topics that don't even effect them.

I think it's perfectly fair to blame the law and the IRS for doing H&R Block's bidding.

In this interaction, I would blame the specific H&R rep GP talked to, not the company in the abstract. They provided him bad, vague information. It doesn't matter what the law is -- if a tax rep gives you bad, vaguely threatening information, that's going to cause stress, and it isn't the law's fault.