That’s the fallacy of “if it’s not on a 1099, it isn’t taxable.”. Yes, you are supposed to report every penny earned, not just the earnings the IRS gets matching documentation of.
I have close to a 5-figure amount reported on the Misc other income line, that is in no way reported to the IRS in any other way.
I have close to a 5-figure amount reported on the Misc other income line, that is in no way reported to the IRS in any other way.
This is pretty different from your earlier assertion that 80% of tax filers would be disqualified from just filing with things reported to the IRS.
That vast majority of people don’t have an amount that is failing to be reported as Misc that anyone would actually care about in the scheme of things.
Caring about it is a different argument than it not existing. Fifty cents of interest earned from a bank is still reportable, and while no one really cares about fifty cents, it would set a terrible precedent to make formal policy stating that it wasnt reported so it can be ignored.
I think the clear and obvious suggestion would be that if the IRS was going to “just handle it” for everyone, then the reporting threshold from interest/dividend-paying groups would be anything above $0.
It is automated paperwork and filing from their perspective, so should be a pretty trivial change, as long as they’re able to just send that information digitally rather than printing EOY statements and paying postage to mail them.
What about the teen who scooped ice cream all summer and informally pocketed $50 in tips? What about the $20 your neighbor gave you for mowing his law last week? What about selling that used car of yours for a $500 profit? Does anyone care if it is reported or not? No. But defaulting to a policy where they arent expected to (either explicitly or implicitly), individual judgement enters the equation as to how much does matter. And “I didnt think it was significant enough to change the IRS’s numbers” becomes a vaild defense regardless of the amount involved.
As said in my first reponse, the reporting burdons would need to expanded drastically, or a vast majority of people couldnt [legally] use the forms as produced by the IRS.
After having done taxes for regular joes for the past 10 years, I think you are severely overestimating the number of households that would need to make changes to a tax return that is pre-filled out for them based on the items that are required by law to be sent to the irs already. I think the vast majority don’t have extra income to report and would probably just leave money on the table (as they do now) by not taking all the available deductions.
I’m not saying its a better idea to do it this way. But I agree with the sentiment that giving them that much money, they should be able to do our taxes for us.
What about what about what about what about…
The kid getting $20 to mow a lawn is very unlikely to earn enough money to need to file taxes in the first place.
And unless you are running a business as some kind of used car flipper, if you sell a used car for profit, of any kind, you are in a small minority (historically – very recent history being a potential outlier).
I’m not saying its a better idea to do it this way. But I agree with the sentiment that giving them that much money, they should be able to do our taxes for us.
Yes, it is more about the general principle that this is an absolute shitload of additional funding, and would potentially cover handling most people’s taxes, by extension.
I do like Scripta’s suggestion of a pre-filled, that you just amend.
But I also realize that the tax prep lobby is ludicrously strong, and that is why we can’t have nice things.
…yet I’m assuming they still wont be able to answer the phone most of the time. 
I also think it’s more about the principle of giving each taxpayer a presumed number that most are going to just go with regardless of accuracy, as opposed to letting them arrive at their own numbers on their own. It’s almost impossible for the IRS to declare a tax return is wrong, when the taxpayer used the form produced by the IRS themselves.
I also think it’s more about the principle of giving each taxpayer a presumed number that most are going to just go with regardless of accuracy, as opposed to letting them arrive at their own numbers on their own. It’s almost impossible for the IRS to declare a tax return is wrong, when the taxpayer used the form produced by the IRS themselves.
Just a guess, but I would think that for the vast majority of people, tax prep is stressful and more expensive and time consuming that it “should be” for their level of tax return. (in terms of “arriving at their own numbers on their own”)
I guess part of the question is, Europe manages to do this sort of thing pretty widely – do you think our tax situation is JUSTIFIABLY more complex to where the IRS wouldn’t be capable of a similar level of service? Or is it really just the fact that the tax-prep lobby has lobbied hard and long to avoid all manner of filing simplifications and improvements?
I dont think you went out on a limb with that guess. It’s much more a fact than many things being passed off as facts these days. 
I think it is more complex, and would require pretty severe (very simple, even basic, but still very significant) tax law changes in order for the IRS to be able to achieve the same efficiency. At least to do it legally, which I guess may or may not be a concern any more.
HAHAHAHA. You’re joking, right? Everything the IRS says always has the caveat that it is 100% on the taxpayer to make sure they are including everything and they are on the hook if they didn’t. If the IRS switched to a pre-filled out form with all income that was reported to them on line 1 and a space on line 2 for you to include your garage sale profits, I can guarantee that the signature line at the bottom would include a clause saying “By signing this, you swear that you have added every single cent you earned throughout the year, even if we haven’t reported it to you, so help you God, lest you burn in IRS purgatory for the next hundred years or until you pay us all back taxes plus penalties and interest.”
I think the hardest part, aside from dealing with the CPA lobby, would be the timing. It would take the IRS time to create the pre-filled forms from all the documents that are due to them in January and February, and then you would have to allow the taxpayer at least a couple months after receipt to return the form. Pushing back tax day from April 15 to June 15 would be a significant effect on government cash-flow. The last thing we need right now is them printing more money to get them through that gap in time lol
So you are agreeing that the pre-printed form wouldnt work for a majority of taxpayers? 
In regards to your point, I think it’d be a lot of wasted effort on the part of the IRS if this pre-filled return was only to fill in 1099 amounts, with the remainder still needing to be filled out by the taxpayer. “Doing your tax return for you” would inherently come with a presumption of it being a competed return that might occasionally require some tweaking for specific exceptions, otherwise it’ll remain as stressful and burdonsome for taxpayers as it is now.
I think the hardest part, aside from dealing with the CPA lobby, would be the timing. It would take the IRS time to create the pre-filled forms from all the documents that are due to them in January and February, and then you would have to allow the taxpayer at least a couple months after receipt to return the form. Pushing back tax day from April 15 to June 15 would be a significant effect on government cash-flow. The last thing we need right now is them printing more money to get them through that gap in time lol
The vast majority of individual income taxes are withheld on a semi-monthly basis, and all other tax payers have to pay quarterly estimates, or pay penalties later.
I don’t see why either of those conditions would change. I suspect cashflow would be wholly unaffected.
Or even improved, since large refunds would also be delayed.
I didn’t think about that. I’m not sure how much more the IRS brings in on April 15 vs. how much they pay out. But, if it isn’t a significant difference, I guess it wouldn’t change much.
Good points. I don’t really have an idea of how much they take in from people that haven’t paid their estimates. I assume its a lot since the penalty for not paying your estimated taxes is so small. But I could be wrong.
not really. Bunch of seniors here that constantly vote down education, spending the lowest per person in the union. sound familiar
Oh I’ve thought about it, but it’d be too much work even for FWF – keeping track of balances and interest rates to ensure it doesn’t exceed $10/yr. It’d be one of the most difficult ways to “make” money.
Since you keep doing this – the word is burden.
Sure, the one time I rely on auto-correct…