The forms with tiny font. The aggravating acronyms. The looming deadline. The math. The threat of pricey penalties and even jail time if you mess up the math.
Tax season has the unique ability to strike fear into the heart of even the most financially confident Americans. If you’ve come to hate April 15th, you’re not alone.
We all wish we learned about taxes (and other useful adulting things) in school instead of parallelograms. But instead of having to become tax experts ourselves, why can't filing our taxes just be easier?
Consider this; Taxes are a bill the government charges you. So why do you have to do all the math?
Instead of having to fill out a complicated return every year, the government should just tell you how much you owe. You could check their work, make any changes, and send in payment or receive your return in record time.
If this system sounds too good to be true, it’s actually not. It’s called Return Free Filing. In fact, it’s already used by countries like Denmark, Sweden and Spain, and it could allow the average American do their taxes for free in under 10 minutes.
What tax season in Sweden looks like (probably).
Over the past decades, multiple Return Free Filing Bills have crossed Congress’ desks. In fact, Barack Obama and Ronald Reagan were major supporters of Return Free Filing.
But, someone big is standing in the way. Tax prep software companies like Intuit (TurboTax), H&R Block and others make HUGE money from the fact that taxes are crazy confusing.
TurboTax and H&R Block love that the process is complicated, redundant, and downright annoying. They support your tax headaches so much that they spend millions of dollars lobbying the IRS to keep it that way.
You pay tax prep software companies your hard earned money to make doing your taxes easier. They turn around and pay congress to make sure it stays complicated.
Government: You owe us money. It’s called taxes.
— jordan (@jordan_stratton) April 16, 2019
Me: How much do I owe?
Gov’t: You have to figure that out.
Me: I just pay what I want?
Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too.
Me: What if I get it wrong?
Gov’t: You go to prison
In 2003, tax prep companies increased their stronghold against Return Free Filing in a major way. The IRS agreed not to create their own free filing system if tax prep companies provided a free filing option for lower income Americans - called the Free File Alliance. The tax prep companies then actively hid these free file options from search results so no one could find them.
On top of that, the Free File Alliance system is confusing, the IRS doesn’t market it, the tax prep companies have no incentive to push it, and a shady opt-in option allows them to push their own paid products.
Frustrated yet? Yeah, so are we. From January 1st to April 15th we’re bombarded with ads that say filing taxes is free and easy - using their software and dodging their constant upsells, of course. Enough is enough.
Stacks and stacks of complex tax code? No thank you.
Here at LearnLux, we know that knowledge is power. That the system was purposely designed to be confusing, to put money into big financial company’s pockets. To make you feel like you can’t do it alone. And to that we say, it’s time for a MAJOR change.
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This piece was inspired by ProPublica’s reporting on the TurboTax Trap which details how Intuit, the maker of TurboTax, and other companies have worked hard to make tax preparation more complicated and costly. If you believe you were wrongly charged for tax prep software through TurboTax, check out info here on how to request a refund.