I knew about this on some level before, but the recent posts have given me a better understanding on how in some countries people need expensive third party software to pay their taxes.
Freetaxusa.com Isn't expensive. It's dumb it still costs money for state but the company that lobbies the government to make our tax code complicated costs a lot more.
You can also do your taxes manually if you know you have a simple return. Or use the expensive software and check it against your manual.
It all sucks though. It should be dead simple as the government already knows 99% of everyone's tax info.
But why do they make everyone file a tax return? In the UK it's only necessary if you're self-employed or very wealthy. Is it because they like auditing poor people so they have an excuse not to audit the rich?
Politicians decided to use the tax system as an incentive system. The IRS knows roughly how much money you made, there's a handful of ways you could make money they wouldn't know about like gambling winnings below $600.
What the IRS doesn't know is if you installed new windows, had a child, donated to charity, paid state or local taxes, paid for daycare, went through adoption, paid tuition expenses, and more. All of those things can be used to reduce your tax burden, so you have to file taxes to tell the IRS how much you spent on these things.
There's also the standard deduction, which negates most of those deductions and works for about 80% of the country.
DK,DC. The effort needed to file a tax return is negligible. It's literally as easy as getting a piece of paper in the mail, going to a website, and copying like four numbers and then getting a few hundred dollars in the mail. The only scenarios where this takes more than 5 minutes is if you're either self-employed or have a lot of wealth in assets you want to claim.
Anyone can file directly to the IRS, point blank, it just might take more than five minutes. I filed for four years when I was self-employed just fine. I filed for multiple jobs this year for free.