I think you're missing the point. The IRS has already received your 1099/W2/etc and thus it knows (a) your income, and (b) how much in taxes you've already paid. By then having the IRS start your tax return for you, you would no longer have to fill in that info. The IRS makes free forms available already. Besides, are there actually people so stupid that they would give their SSN/info to a site like that?
"Besides, are there actually people so stupid that they would give their SSN/info to a site like that?"
Honest question. Are you saying that this particular site is less secure or all online e-filing services less secure? This is one of the options recommended by IRS[1] for e-filing.
All e-filing services (include free file fillable forms) result in a third party seeing your data on the way to the IRS. This is true for both online and offline tax preparation software (e.g. TurboTax).
I think many of us here don't get paid by W2 or by 1099. We are compensated in different ways which don't require those types of filings (e.g. K1), in which case we do need to fill out forms.
I can't speak specifically for the group here, but the vast majority of US taxpayers by a large margin _are_ compensated via W-2 or 1099. Isn't that who it should be optimized for, rather than outliers or exceptions?
To clarify, the vast majority of US taxpayers that are compensated via W-2 or 1099 are eligible to file under 1040A or 1040EZ, both of which are much simpler and easier to deal with (and, incidentally, all of the major tax preparers like H&R Block and Intuit offer free versions for those use cases).
The portion of that cohort that file 1040 (generally those that make over 100K and have situations that make itemized filing more efficient than taking standard deductions) is pretty small.
Definitely ... until someone finds tax advantages to being in a different category and people gradually "reinvent" themselves as being in that category.
You were outraged at hedge fund managers classifying their income as interest (15% tax) rather than "earned income" (~35% income tax)? Well, wait until the income tax goes back up to 50+%, and see how many non-"earned income" ways there are to compensate employees...
There are an incredible number of moving parts with circumstances that may seem trivial, such as a master limited partnership or a foreign company paying dividends. Unless the entire world can standardize on taxes, these complications can't go away because not all information is properly reported or reported in a timely manner
Sure. But a system that only addressed the needs of 100 million people with simple taxes might still be a good idea (I realize that the thing exists. Free File is urged on by the government and has wide reach. I don't like that it is roughly designed to prevent the IRS from developing any sort of direct servicing).
You are looking at a group of a small percentage of that (at most a few million people) who make enough that they are not eligible for 1040A/1040EZ (the 1040A cutoff is roughly 100K) yet don't have particularly complicated tax situations. That pales in comparison to the people who can be catered by the free tax systems.
I'm saying that I don't like the current free file implementation. Who it covers (or not) isn't particularly part of my dislike for it. I'm admitting that it covers a great deal of people.
