FTC bans tax-filing parasite TurboTax from advertising itself as ‘free’

Originally published at: https://boingboing.net/2024/01/23/ftc-bans-tax-filing-parasite-turbotax-from-advertising-itself-as-free.html

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I know they passed a law a couple years ago where they finally made state filings “free”.

I used to have to file two state income taxes because I worked in one and lived in the other. PITA and double the fee :confused:

It is kinda silly that the states and government just don’t have their own website for this. But, you know, capitalism. :confused:

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I have been doing taxes in Excel for at least 5 years. If you have an experienced tax preparer do your taxes once, you should be able to to the following years tax paperwork. On the other hand, if you just drop a disorganized pile of paperwork and receipts, the tax preparer deserves to get paid. I would not touch Turbo Tax with a 10 foot pole.

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The tax code changes from year to year.

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Most people shoudn’t need to file at all, the IRS aleady has the numbers. It’s the tax preparation industry lobbyists that make it necessary for everyone to buy software every year…

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One popular analogy is someone orders a pizza, the pizza delivery person asks the customer to work out what they owe for the order, and if they guess wrong they go to jail.

(I guess we could also expand this analogy by giving rich people a bunch of coupons for all the free pizza they want.)

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If all you have is W2s and 1099s (no K-1s), Turbotax can work really well. And software like this (or TaxAct or H&R Block’s software offerings) is WAY cheaper than going to a storefront tax prep place, where all they really do is ask you the same questions that the software asks.

But like @GuyMontag451 pointed out, for the vast majority of Americans, the government should just be working out your taxes and sending you a bill or refund automatically. You should only have to fill out a form and file it if you disagree with their conclusion. The existing system is stupid, and perpetuated mainly by the lobbying of Intuit and H&R Block.

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Freetax USA has a stupid name and apparently no advertising budget, but I’ve been using it for years to do our taxes, which involve a basic 1040 form from my husband’s job and all the forms I need as a freelance (self-employment tax, Schedule C profit or loss, business expenses, etc.) . Completely free for us and have had no problems whatsoever.

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I used it for a long time to simplify more complex business forms. As you pointed out, it’s cheaper than a service or a pro. Now, I’m in the free file camp, using Open Tax Solver:

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Several tax preparation companies including TaxAct and H&R Block have sold financial info to advertisers.

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That something called the “tax-filing industry” even exists is bad enough.

There are legitimately free alternatives–IRS partners with local organizations each year (usually United Way and AARP for 2) that have trained volunteers who prepare and e-file tax returns for the public for free.

The United Way VITA (Volunteer Income Tax Assistance) program has a household income cap ($75k this year in Florida), and it is my understanding there is no income cap for AARP tax prep assistance.

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In this analogy the rich people own the pizzaria.

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That’s evidently how [eta: or similar to the way] most countries’ taxes operate. But not Yankistan.

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In Japan, your employer files your taxes for you, and you just submit an amended return in February or March if you had other income.

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