As Americans, filing and paying taxes annually is a requirement. We might not like it, but we know that taxes are one the major sources of revenue our federal government receives that allow it to continue its work of introducing and creating laws, as well as protecting and keeping us free.
However, as you well know, most of us wind up paying hundreds of dollars more each year just to make sure that our taxes get to the IRS and are done correctly – and, no, that doesn’t include any taxes that we might actually owe for the year. On top of that, the bulk of Americans spends some 13 hours on average preparing our taxes, whether organizing receipts for CPAs or jumping through all the hoops required for small business owners.
It’s ridiculous, I know. And one of the many reasons is that tax season is often one of our least favorite times.
But it might just get a bit easier, both for your time and your money.
Thanks to a newly introduced bill, the IRS may soon be forced to offer more free online tax filing options, as well as simplify some of the processes already in play.
It’s known as the Tax Filing Simplification Act of 2022 and was recently introduced by Democratic Senator Elizabeth Warren of Massachusetts.
Now, upon reading that particular name, many you might immediately have questions as to its 1) legitimacy and 2) how its math works out in the end, as Warren is not exactly known for introducing plans that actually do much good in the end. Instead, she’s widely known as a leader who expects us all to trust her Ivy League education and that she knows best.
The only problem is that she doesn’t. Oh, and that as much as she says she’s for working Americans, most of her plans would end up costing us much more, as well as taking away our freedoms.
But I digress.
Rather than getting into all that too much, let’s instead focus on this particular bill, which, as far as I can tell, might actually be good for the average American and not just the top one percent.
According to a recently published report by Accounting Today, the Tax Filing Simplification Act is meant to make taxes both simpler and cheaper for Americans – namely, by forcing the IRS to offer a more user-friendly and completely free online filing system.
Currently, the IRS does offer a free filing option. And while some 70 percent of us are, in fact, eligible to use, which most Americans don’t actually know, only a measly three percent usually take advantage of it every year. As Warren noted, this is because, for starters, the program can be rather complicated, especially for those who don’t have what you might call simple taxes.
Another reason is that not all tax vendors offer this option. And the ones who don’t usually advertise it as such. They either charge customers for the service or steer them towards another and usually not-so-cost effective offer, lowering program participation.
According to a report from April of this year, the Government Accountability Office had determined that most Americans spend far “too much time and too much money,” as Warren calls it, on taxes. And so they recommended that the IRS create some more options for the American people that might actually make tax filing nationwide truly free.
And, as Warren says, that is exactly what this law would require of the IRS.
“Along with lowering costs and eliminating red tape for all taxpayers, simplified filing tools would ensure that more eligible people – including millions of low-income Americans – receive important tax refunds, like the Child Tax Credit and Earned Income Tax Credit.”
Per the proposed legislation, the new law would allow taxpayers to cut out third-party tools like TurboTax or Intuit and file directly with the IRS. They would be allowed to download all necessary filing data from the IRS software program to minimize mistakes, as well as be offered an option for pre-prepared tax returns, including income tax liability and/or refund amounts already listed.
The new law would ensure that the IRS cannot make deals restricting its free services and that those services be offered through a secure online program with identity verification functions.
Would this law help you out?