Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
×
Businesses The Almighty Buck

TurboTax Started Charging the Disabled, Unemployed and Students To Make Up For Trump Tax Law (propublica.org) 279

The 2017 tax overhaul directly threatened the lucrative business of Intuit, the maker of TurboTax, so it pushed students, the disabled, and unemployed to a paid tier to make up for the lost profits. ProPublica reports: Although the company draws in customers with the promise of a "free" product, its fortunes depend on getting as many customers as possible to pay. It had been regularly charging $100 or more for returns that included itemized deductions for mortgage interest and charitable donations. Under the new law, many wealthier taxpayers would no longer be filing that form, qualifying them to use the company's free software. Intuit executives came up with a way to preserve the company's hefty profit margins: It began charging more low-income people. Which ones? Individuals with disabilities, the unemployed and people who owe money on student loans, all of whom use tax forms that TurboTax previously included for free. The shift was described to ProPublica by two people familiar with the process.

Because the new law almost doubled the standard deduction, Intuit faced a loss of users of its Deluxe edition. Most of the millions of Americans who would no longer be itemizing their deductions are relatively affluent -- making more than $75,000 a year -- but they would now potentially be eligible to use the Free Edition. In response, the company bumped a number of forms typically used by lower-income filers, which were previously available in the Free Edition, into paying editions. "They were always supposed to be customer focused, customer first," one former staffer said. But the income levels of the groups that were being driven to paid products "was never really considered." One of these forms was for a tax credit that goes exclusively to poor taxpayers who are elderly or get disability benefits. Another is used by low- to middle-income households that receive a credit for putting money in a retirement account. A third is used by taxpayers who collected unemployment benefits.

This discussion has been archived. No new comments can be posted.

TurboTax Started Charging the Disabled, Unemployed and Students To Make Up For Trump Tax Law

Comments Filter:
  • by Anonymous Coward on Wednesday July 17, 2019 @08:48PM (#58942814)

    And the parasite company got more parasitic to survive.

    • by Anonymous Coward

      Funny how this article tries to blame Trump for taxes being easier to fill out. So then a gigantic corporation that built itself off of Democrat tax laws decided to screw over the Democratic voting base to keep enriching executives. And now we should be angry at Trump because.... taxes should be harder to fill out?

      • The fact that the tax code is so convoluted that the average American wants and/or needs a third party to help them file their taxes is the real crime. Turbo Tax (and other third parties) are necessary parasites because of the tax code. Simplifying the code is a good thing. That said, moving previously free forms that helped those most disadvantaged to the deluxe version is appalling. Raising the cost of the deluxe version would have been the morally correct choice. Now, is there a Congress critter (don't c

        • a government run system which would be free to use that would be similar to the offerings of the various third parties?

          Even better would be an Open Source app, managed by a non-profit, that anyone would be free to fork and extend.

        • by Gilgaron ( 575091 ) on Thursday July 18, 2019 @08:32AM (#58945012)
          The third parties aren't necessary, they made themselves necessary by preventing the IRS from providing the software themselves. When I do my state taxes, I can just pop onto the state's webpage and take care of it in minutes. For the federal taxes, I have to buy a program, calculate my taxes, submit it, and the IRS checks on their end again with their own programs. The tax code isn't super complicated, you could make a spreadsheet do it, it'd just be a headache for the consequences if something was off and you got audited. If I was using the tools the IRS uses from the beginning then only the inputs would need validated, which is comparatively easy.
        • Simpliying the code is a good thing.

          Okay [nordicmodelusa.org].

      • by LordKronos ( 470910 ) on Wednesday July 17, 2019 @11:33PM (#58943570)

        Funny how this article tries to blame Trump for taxes being easier to fill out. So then a gigantic corporation that built itself off of Democrat tax laws decided to screw over the Democratic voting base to keep enriching executives. And now we should be angry at Trump because.... taxes should be harder to fill out?

        Check your biases. I read the article. Did you? It doesn't try to blame Trump for anything. It only mentions Trump a few time times:

        "Trump’s Tax Law Threatened TurboTax’s Profits. So the Company Started Charging the Disabled, the Unemployed and Students."

        Simple factual statement. Doesn't say Trumps change was good or bad. Just that it affected TurboTax, and they responded accordingly to protect their profits

        The other references to Trump were even less interesting. The only real blaming the article does is blaming Intuit for advertising free filing and then trying to trick people into paying, and for failing to disclose what situations would incur additional charges this year.

        So please feel free to point out where you think the article blames Trump or suggests we should be angry at Trump.

      • Re: (Score:3, Insightful)

        by Darinbob ( 1142669 )

        Except taxes were not easier to fill out for many people. Even with the Trump changes, the itemized deductions are very likely to be much larger if the taxpayer has a mortgage, has a lot of charitable contributions, has large medical expenses, and so forth. The standard deduction is so small that it really does not take much work to exceed it by itemizing if the taxpayer is middle class and still working. Of course, the increase in the standard deduction is awesome if the taxpayer is lower middle class a

        • ... has a lot of charitable contributions ...

          The UK has an interesting system. When you donate to a charity, you can tick a box that allows the charity to claim your tax deductions on your behalf, so they get more money, and you don't have to work.

          Translated to US situation: Imagine you want to donate $100 to a charity, and have $20 tax savings, so it costs you $80 but you have the extra work. Instead you donate $80 and tick the checkbox, the charity gets an extra $20 from the tax office, it costs you $80 plus zero work.

          Typically the big charit

        • Yet other Tax prep software providers that participate in the IRS's Freefile program are able to continue providing the free-file for those legally eligible without tricking them into paying. I've used TurboTax for years but seeing how they were pushing me to use the paid options while my income was below the 50k threshold I used another app. No push to pay for services the IRS says my income level exempts me from. And it increased the refund I did get slightly over what Turbo had calculated. Not a lot
          • I'm not defending Turbo Tax, I stopped using them. But it is annoying that you have to pay to file; TurboTax and HR Block give you free federal filing but then it's $20 to e-file with the state which is absurd. So I print it out and pay a few dollars of postage so that someone has to waste time at the tax office scanning it back into a computer.

        • Comment removed (Score:4, Insightful)

          by account_deleted ( 4530225 ) on Thursday July 18, 2019 @09:12AM (#58945182)
          Comment removed based on user account deletion
          • by PuckSR ( 1073464 ) on Thursday July 18, 2019 @12:24PM (#58946338)

            Pre-filled tax forms have been proposed many times in the USA. They are ALWAYS shot down by Intuit and other tax company lobbyists

            You will notice, every time that politicians talk about "easier taxes", they are just hand-waving.
            -Trump talked about reducing the number of tax brackets to make the FORMULA simpler, despite it being something anyone can do with a basic calculator
            -Paul Ryan bragged about reducing the basic tax form (1040EZ) from 12 lines to 10 lines

            None of these things actually make taxes easier. They are just lip-service.
            The IRS has ALL of the data needed to perform pre-filled tax forms, but they won't do it.

        • Mine would have been easier, but to get my state taxes right I had to fill out the federal itemization even though I was taking the new standard deduction.

      • Except no part of the article “blamed” Trump. Other than identifying it was tax changes championed by Trump, the article doesn’t mention him. It’s funny how Trump supporters rush to defend him at every instance even when there is nothing. It’s like they have guilt consciences or something.
  • Don't like it, use a competitor or fill out all the shit yourself.

  • by silverkniveshotmail. ( 713965 ) on Wednesday July 17, 2019 @08:54PM (#58942852) Journal
    It is total bullshit that we should pay for the privilege to square up with the government every year. I hope one day the rug is pulled out from companies like this, and they implode.
    • by Luthair ( 847766 ) on Wednesday July 17, 2019 @09:06PM (#58942920)

      More like congress has been blocking the IRS - https://www.theverge.com/2019/... [theverge.com]

      Plus tax lobby generally tries to block things that make taxes simpler because they want people to not like them - https://www.npr.org/sections/m... [npr.org]

    • No, turbotax is doing everything it should as a private business.

      The problem is squarely upon your shoulders and the people you elect to office. Neither of the parties gives a shit about you, maybe you will remember that next time you hit the poles.

      And by you, I mean everyone! Nations get the governments they deserve. You want things to change... change how you vote.

      If you continue doing the same thing while expecting different results then you are insane. Voting for either D or R is doing the same damn

      • Tell me that when said companies aren't busy corrupting the politicians we try to elect.

        • Maybe if we elected incorruptible people instead of trying to blame the companies that must defend themselves from their rivals attempts to corrupt...

          I wonder what that would look like. I suspect the media would be influenced to be dead set against such a person, possibly even spreading lies day and night about that person...

          Thats not something we will see in our lifetime...
  • Let's not forget (Score:5, Informative)

    by DigitAl56K ( 805623 ) on Wednesday July 17, 2019 @08:56PM (#58942864)

    This:
    https://www.propublica.org/art... [propublica.org]

    And this:
    https://news.slashdot.org/stor... [slashdot.org]

    Summary: Intuit suck

  • Hold up... (Score:3, Insightful)

    by bblb ( 5508872 ) on Wednesday July 17, 2019 @09:04PM (#58942904)
    If Trump's tax law was benefiting big business, then why would a big business be losing money from it and need to charge poor people..? The whole idea that a large segment of the "1%" didn't have accountants filing their shit and was instead sitting at home using TurboTax free edition this past April is pure fantasy... Also pretty funny that this didn't pose a problem for H&R Block's free software. But sure, let's blame Trump cause what doesn't he get blamed for these days?
    • Re:Hold up... (Score:5, Interesting)

      by SirAstral ( 1349985 ) on Wednesday July 17, 2019 @09:18PM (#58942992)

      That is the usual catch 22-logic many have.

      Ignore anything good results that a political opponent creates while gravitating towards everything bad. It is very similar to the the "risk aversion paradox" or "Ellsberg Paradox".

      People have a habit of sticking to the evil they know and this is an offshoot of that. In their minds even if something good is done, they think it can only be for the wrong reasons and still lambaste it.

    • by eepok ( 545733 )

      Big business is not a uniform, over-arching club. Some industries benefit. Some companies within those industries benefit. Any company can benefit from a number of different changes.

    • You've got six replies here to a really obvious question, and not one answer. This disappoints me.

      For individuals: Trump's tax law eliminates a lot of deductions permanently, thereby increasing taxes, while increasing the standard deduction temporarily, thereby decreasing taxes. For some people this means paying less in the short term, for some people it means paying more. When the increase on the standard deduction runs out, everyone will be paying more.

      For companies: Trump's tax law reduces corporat
  • Tax code (Score:4, Insightful)

    by markdavis ( 642305 ) on Wednesday July 17, 2019 @09:15PM (#58942970)

    We need to change the tax code so most people don't NEED to use greedy, third-party companies to prepare their taxes.

    And when the tax code is changed ever so little, such that it actually DOES make it a little easier and faster (the first time I have ever seen that happen), the result is this kind of crap.

    Sigh

    • Well, they already don't NEED to use greedy, third-party companies to prepare their taxes. It just easier to do taxes with them.

      But yea the government should require the IRS to file 100% of every citizens taxes and for them to send them out to be contested, corrected, or accepted. And if a citizen can prove that the IRS did not offer a correct return with the best possible amounts then uncle sam has to pay out an extra $1,000 smackers to them plus any court costs. Along with double the amount against bus

      • by EvilSS ( 557649 )
        Yes, they should. Unfortunately, they literally do the opposite and prohibit the IRS from doing just what you stated. The IRS would love to do it too, it would save them a fortune not having to process and cross check returns. Hell, they actually do do it, but they legally can't send it to you. Go get a copy of your tax transcripts. You can see where they compare their results to yours.
      • Comment removed based on user account deletion
  • by Dallas May ( 4891515 ) on Wednesday July 17, 2019 @09:20PM (#58943006)

    There is literally zero reason why almost anyone here has to do out their own taxes at all. The IRS already has all of the information you have to report long before you type it in. That's the scandal.

    • by SvnLyrBrto ( 62138 ) on Wednesday July 17, 2019 @10:14PM (#58943266)

      More to the point, not only do they have all the information necessary, they actually do the calculations to check your work... just not immediately.

      I found this out first-hand the first time I used tax-prep software instead of doing everything dead-tree. I made a mistake during my return... I missed a checkbox I should have clicked, which resulted in my receiving a return about $1100 larger than I should have. Three years later, I got a notice from the IRS pointing out the fact and inviting me to dispute it if I had records showing I was correct (I wasn't. It was a legit screwup on my part.). And, of course, they wanted their $1100 back. And I'm basically a nobody with an uncomplicated return that would not have set off any flags in whatever software they use to choose who to verify or audit.

      So, likewise, it infuriates me that I have to file taxes at all. The IRS does have all the info themselves. The do all the calculations themselves. So why the hell do we have to go through the headache every year?

      • I don't know if this would always work, but after reading about the double work that goes on with the IRS checking returns, a coworker of mine sent in blank forms and his documents (e.g. W2s) to the IRS one year and reported that they did indeed just do everything for him and sent him his check.
    • by jrumney ( 197329 )
      In many countries these days, it is optional for wage and salary earners to file a return at all. Income tax is already collected at source, and it reduces the cost to run the tax department significantly if they don't have to deal with millions of tax returns at the end of every tax year. Basically you only file if you have significant deductions that weren't already accounted for in your tax code, or significant investment income that hasn't been taxed at source. And even if you do have to (or choose t
      • Taxing income correctly when it is earned is generally only practical with a flat undeductible tax. In any graduated tax system, it is either not feasible or some people are being ripped off.

        I suggest that you live in a salary-heavy area instead of a wave-heavy area, that you yourself are on salary, such that you are ignorant of anything but a specific pre-set income value at the end of every year. The rest of the country outside of the valley you live in earns a wage. Instead of a pre-set value per year,
        • Instead of a pre-set value per year, it is a pre-set value per hour, and if we work fewer or more hours this year than last year, then we change tax brackets.

          Tax brackets are applied to income within a specific range (5% on the first $10k, 10% on the next $30k, 15% on the $50k after that). The marginal rate does not apply to your entire annual income, so you don't need to know how much you'll make in the future to know how much tax will be levied on income you're earning now—just how much income you've earned so far. If the tax is collected at multiple points (more than one employer, for example) they they would need to coordinate to correctly track cumula

      • For most people in the USA filing a 1040 is completely optional.
        If you choose not to file:
        A: You will NOT receive any refund on the extra tax you paid. The IRS is just fine with that.
        B: If the IRS decides you owed even a penny more then what was already withheld you will be subject to fines and interest. The IRS is just fine with that.
        C: ???

    • There is literally zero reason why almost anyone here has to do out their own taxes at all. The IRS already has all of the information you have to report long before you type it in. That's the scandal.

      Fortunately that is not true except in the simplest cases. If you [Dallas May] thought about it a little bit, you would realize what a bad idea it would be to give them that much data. Take all the problems and abuses of the Google and Facebook and add the coercive powers of the government on top? No thank you.

      For reference, in Japan the simplest case is handled by the employer. If your income comes from a single employer, then they prepare the tax return for you, after giving you an opportunity to report a

    • Comment removed based on user account deletion
  • I had to file unemployment for several months while living in Upstate New York. It was a pain in the ass to apply for, and was mismanaged rather severely once that caused my benefits to be spontaneously denied in the middle of the period until I corrected some other person's mistake.

    The worst part by far though was how the taxes were managed for it. When I filed for unemployment, I checked the box to have taxes withheld from my unemployment check (just as one would do for regular income). When the check came, indeed taxes were withheld. But what happened with my next tax return (by which time I had a new full time position)?

    When I put my unemployment benefits into turbotax it promptly told me I had to pay all of it back to New York. Every. Last. Cent. That was, to put it mildly, an unpleasant surprise. Apparently for some reason never explained to me, my unemployment benefits were not really a benefit at all but rather a zero-interest loan with extremely short payoff terms.
    ,bR> The next time some fucking blowhard on the radio is going on about how people "want to be on unemployment", try first actually talking with someone who has been there. I sure as hell didn't want to be on unemployment, and the fact that it screwed me on the way out makes me want to work even harder to avoid it in the future.
    • Pretty much the only time you have to pay back any unemployment benefits is when you were over-paid, either due to fraud on your end or mistake on theirs.

      If its the former, fuck you scumbag.
      If its the later, you dont deserve that money, and it isnt "Every. Last. Cent."

      So which is it? You say you had to pay back "Every. Last. Cent," so you are a fucking scumbag, yes?
      • I don't write the tax code. I put my numbers into TurboTax and when I entered my unemployment benefits in as income (using the proper mechanism in there) the amount that I owed the state of New York increased by exactly the amount I was paid for unemployment.

        In other words you assume too much. Far, far, too much. But thanks for playing.

        I had to pay back every last cent of unemployment that I received. It was not a pleasant surprise.
  • We had a pretty complicated return, with wages, Social Security, an annuity, dividends, a stock split, a corporate takeover, an IRA conversion and a capital gain on sale of a house. About 20 pages of forms if you include the worksheets, filed with freefillableforms. It does the calculations, just like TurboTax. The hard part is assembling all the info and then data entry, which you have to do anyway. The only difference is you fill in lines on a form instead of answering TurboTax's questions. So what's
  • For a company that rakes in over 5 billion in revenue and has a market cap of 72 billion, you'd think they could afford to hire some competent programmers. Case in point, the current Mac version of Quicken sucks so I still use the 2007 version. But since the beginning of 2019, I haven't been able to import transactions from my credit card accounts. Aside from the fact that effing Chase charges you $9.95 to be able to download transactions from within Quicken, a task I could do myself for free, losing thi

  • Trump made me do it!

He has not acquired a fortune; the fortune has acquired him. -- Bion

Working...