Senator Warren Claims TurboTax 'Relentlessly' Upsells Customers in Letter To FTC (theverge.com) 93
Senator Elizabeth Warren (D-MA) has written a letter to the Federal Trade Commission, saying that TurboTax "continues to relentlessly upsell" customers while also directing them away from services that would otherwise be free. From a report: As noted in the letter, Warren's staff analyzed TurboTax's services using a sample taxpayer and found that the company attempted to upsell the customer eight times during the tax filing process. Warren writes that in "several cases," these solicitations "appear to be efforts to mislead customers into thinking that they must pay the extra fees in order to file their taxes when that is not the case." Some show up as full-screen prompts, forcing users to scroll to the bottom to deny the upgrade.
In one instance, Warren's team found that TurboTax highlighted its $89 tax filing package as "the right option" for their sample taxpayer, leaving the free option at the bottom of the page. After choosing just one upgrade, Warren's staff found that their sample taxpayer with "simple" filing requirements had to pay an extra $69 to report her unemployment income and educator expenses, plus $64 to file Massachusetts state tax returns. That makes for a grand total of $133 -- a sum people wouldn't have to pay through the IRS's free Direct File service, Warren argues.
In one instance, Warren's team found that TurboTax highlighted its $89 tax filing package as "the right option" for their sample taxpayer, leaving the free option at the bottom of the page. After choosing just one upgrade, Warren's staff found that their sample taxpayer with "simple" filing requirements had to pay an extra $69 to report her unemployment income and educator expenses, plus $64 to file Massachusetts state tax returns. That makes for a grand total of $133 -- a sum people wouldn't have to pay through the IRS's free Direct File service, Warren argues.
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I don't really need Youtube Premium either, but Liz isn't complaining that they keep trying to upsell me on that.
Is Youtube required by the U.S. government for every taxpayer?
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Turbotax is not required either. They can use HR Block, or, *GASP* pen and paper!
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Right, as if anyone still owns a pen.
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People keep sending me free pens in the mail trying to guilt trip me into sending them money. Pens are not in short supply here.
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OK, pens that work.
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I have a collection of pens I use. I used one of those pens multiple times this past week, and two other pens for limited use as well.
As for taxes, my local taxes were done via pen.
I know it's difficult to imagine using something which doesn't rely on a computer, but try.
Should the government subsidize bait and switch? (Score:5, Informative)
Turbotax is not required either. They can use HR Block, or, *GASP* pen and paper!
When Turbotax is advertised free, why would you think people will search for something else?
The answer is, Turbotax has been doing bait and switch.
Bait and switch is one thing on something that is an optional purchase (although still illegal). What makes this specifically the government's business is that it is bait and switch on something that is required by the government.
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Don't you guys have fillable PDF? That's what we do in Canada. No pen required.
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I think the point is that private companies constantly upsell their services in deceptive ways.
I think that the point is that filling in a tax return is required by the government, and TurboTax is trying to graft onto that a payment that goes to them.
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Predatory, but with taxes this is something everyone has to do, and taxes are way too complicated for many people to do correctly on their own. The "free" option is usually for those with simple taxes who can do it on their own if they graduated high school. The language in the tax documents is baffling at times; the helpful tips are obtuse. Taxes are a language that most tax payers don't know.
The other half of the equation is that tax prep software, and other tax prep people, lobby heavily to prevent si
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Predatory, but with taxes this is something everyone has to do, and taxes are way too complicated for many people to do correctly on their own.
For anyone that qualifies for the free tier of TurboTax, the tax forms are NOT complicated. We all survived tax preparation long before TurboTax existed.
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I don't really need Youtube Premium either, but Liz isn't complaining that they keep trying to upsell me on that.
Is Youtube required by the U.S. government for every taxpayer?
No. Neither is TurboTax.
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I stopped using Turbo Tax (Score:5, Informative)
This doesn't happen until well into your tax prep work. So switching over to a competitor becomes a major pain. This is by design.
It's the kind of user hostile UI design that normally gets
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because they're practices are deceptive. If you click something by mistake you're locked into the upsell with no way to disable it, even if you haven't used the service (which itself is of dubious value).
This doesn't happen until well into your tax prep work. So switching over to a competitor becomes a major pain. This is by design.
It's the kind of user hostile UI design that normally gets /. up in arms.
Their use of dark patterns sucks. They are constantly manipulating you into doing something you don't want to do.
For one of my kids at the end they were pushing me to pay $130 for a federal and state return that I knew should be free. It took a while to figure out what to do. Go to the left side nav pane "tools" section. Scroll to the bottom and click "switch to free version". It will switch over unless your tax situation is using something not included.
For another of my kids when I was done entering th
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Most software will let you edit the raw form if something isn't covered. And you know it won't be covered because the software will tell you flat out that it's not covered: some will tell you this by trying to upsell you, others will just pop up the form and have you fill in the right number, others will just have some text pop up. The hard part is knowing you need to do something, and then figuring out the official instructions about it from the official IRS website. Caveat, I haven't used TurboTax in a
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Most software will let you edit the raw form if something isn't covered. And you know it won't be covered because the software will tell you flat out that it's not covered: some will tell you this by trying to upsell you, others will just pop up the form and have you fill in the right number, others will just have some text pop up. The hard part is knowing you need to do something, and then figuring out the official instructions about it from the official IRS website. Caveat, I haven't used TurboTax in a decade, maybe it's changed.
I still hate that federal e-file is free, but all the tax prep software charges a fee for state e-filing. Which the last two years I've paid because it's worth the convenience fee to avoid printing out the forms (at work) and standing in line at the post office.
Both TurboTax and HR Block will do a "simple" federal and one state for free. You just have to navigate through dark patterns trying to get you to pay for something. Intuit will do things like offer two paid and one free service, but the button for selecting the free service says something like "death by suffocation"
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Meanwhile, FreeTaxUSA is pretty great. I use them for my business taxes. Somewhat guided process but only $14.99 even with a schedule C and state filing.
Re:So? (Score:5, Insightful)
...but Liz isn't complaining that they keep trying to upsell me on that.
YouTube didn't have an agreement with the federal government to provide free services that it violated at every stage of the tax paying process. Intuit did. That agreement was in exchange for the federal government not providing its own free service.
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It is insane that in 2024 the USA doesn't have a simple and free way for tax payers.
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They do, but it's a pain, or it was when I tried it.
I've been downloading the forms, printing them and filling them out. Then I mail them in, all 10 pages. It cost $1.68 plus the 6 x 9 envelope.
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May I recommend FreeTaxUSA? Even their paid options are extremely reasonable. Not a huge amount of guidance but way easier than tracking down and reading through instructions for the paper forms.
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Federal is free with them. State cost 14.99. Great service, used it for a couple years now. Couldn't be happier.
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I didn't even have to pay for state since they show you the form and you can copy the fields to the paper form or in my state file online with the fillable form. They just made it convenient.
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You are required by law to file taxes. Youtube is private corporation, you are not required to watch youtube videos or have a youtube account. They are in no way comparable. It is insane that in 2024 the USA doesn't have a simple and free way for tax payers.
Hey now, easy there. We're working on it. I mean, the Internet is pretty new. We're trying to roll out a tax filing system on it. Give us another century or so and we may make a go of it.
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Turbotax offers free service to low-to-moderate income people as part of an agreement it has made with the IRS. In return for this, the IRS doesn't provide free electronic tax preparation services like most other advanced countries do. For most consumers, the IRS could in fact automatically fill out their returns and the consumer could simply check it by answering a few simple questions rather than puzzling over instructions written for professional accountants.
If you've always wondered why filing your ta
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The US government has an official free filing preparers program. There's a web site where they list them as "trusted IRS Free File partners." There should be some minimum standard of actually providing that free service without tricks in order to stay listed.
But what about H&R Block? (Score:1)
Trick question! Their system is down, so you can't file using them even after paying for it.
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Trick question! Their system is down, so you can't file using them even after paying for it.
No wait. Say you're an American overseas. Which HR Block do you use? This one [hrblock.com] or this one [hrblock.com]? If you think that's an easy answer, how come both give different results? Seriously, I can vouch this is true based on my return last year -- the difference was about $500.
It does. (Score:4, Interesting)
I use TurboTax for various reasons. The amount of upselling is pretty fierce. Her pointing out obvious reality doesn't seem like it should be controversial.
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This video does a great job explaining how inefficient and costly our tax system is compared to advanced countries.
https://www.nytimes.com/video/... [nytimes.com]
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This video does a great job explaining how inefficient and costly our tax system is compared to advanced countries.
https://www.nytimes.com/video/... [nytimes.com]
I don't need to watch that. Let me bottom line it for you.
If the United States continues as a democracy, the tax system will never change. It's simply not possible in our current state of democracy to make major changes like revamping the tax system.
If the United States turns into a Republican Party led single party dictatorship, then it's possible depending on who is running things that the tax system will go away completely, perhaps change to a flat tax system, or make whatever changes the
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Completed my taxes a couple of days ago with TurboTax. She is absolutely right that it is deceptive. It is unclear what particular product you are using, and it appears impossible to do anything other than move to a more expensive version.
That said,, Turbo tax is so damn slow - why does each item of information need its own screen? And why does it need to spin and animate stuff as I move from one screen to another? Terrible, and its nagging about me setting my farm income to 0 (I don't have a farm, henc
Like the DMV "services" (Score:5, Interesting)
Reminds me of the DMV (dept of motor vehicles) sites that I kept getting when I was searching for the real state DMV. They were offering a service that was basically them doing what was already free. The site was so sneakily named and designed that I was a totally confused and about to enter my info before I dug in more deeply and realized the scam.
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Reminds me of the DMV (dept of motor vehicles) sites that I kept getting when I was searching for the real state DMV. They were offering a service that was basically them doing what was already free. The site was so sneakily named and designed that I was a totally confused and about to enter my info before I dug in more deeply and realized the scam.
Same with non-Americans filling out an ESTA (Electronic System for Travel Authorisation) to travel to the US, loads of dodgy sites that charge you extra just to be a middleman by passing the details from their website to the official one (the official site was $14 last time I did one). It doesn't help that the legit site is cbp.dhs.gov which looks a bit dodgy to begin with. Fortunately Google is pretty good at filtering the dodgy ones out when searching for ESTA, at least if you've an adblocker installed.
Re:So what? (Score:5, Interesting)
Because the company behind TurboTax negotiated a deal with the government: the government wouldn't provide a free website where everyone could do their taxes online super fast (basically everything filled out for you to start with, so 95+% of people just need to hit "accept" and it's done; most people have very simple taxes and the gov't already knows your financial information), like many other countries do. In return for NOT developing that website, TurboTax has to have a free version distributed to anyone who wants. TurboTax is doing VERY underhanded dark-pattern shit like having people click on the WRONG "free" version. What is a "wrong" free version, you ask? That's one that isn't actually free to file online with, it turns out. So they have two "free" versions, and one is marketed visibly and promoted and links are all over their website...and the other one is hard to navigate and find, but it actually can file your taxes electronically for free. Shit like that.
The gov't never should have made the deal to begin with.
The problem is worse than that (Score:5, Insightful)
TurboTax exists because the government intentionally makes tax law confusing. Every deduction you take requires confusing calculations and gives you doubts and the fear of an audit. Even the IRS and tax courts don't agree on the tax codes. It's FUD all the way.
The annual tax should be just a simple percentage of income, the same percentage for all based upon the sum of all your W-2's and 1099's. No deductions. No AMT. No EIC. A simple post card filing. Then TurboTax would cease to exist.
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But the govt now has such a site.
And I agree, govt shouldn't have been involved to begin with.
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It gets worse. Turbotax/Intuit has spent $45.7 million on federal lobbying since 1998.
There is one political party who has consistently received most of Turbotax lobby money. And they are always the one objecting to IRS developing software for free filing. I'll let you guess which party that is.
And there is more. Intuit received $94 million in federal research and experimentation credits in 2022, and another $106 million in 2023. This money was to go towards developing software for the *new* free filin
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People are free to not use turbo tax and go use the free govt thing.
Nope. The IRS direct free file is only a pilot program available for like 10 states.
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Really? Republicans also like it how it is. Not wanting it on the same bill as the Ukraine aid is just a convenient excuse. The Ukraine aid is going to pass anyway because their donors in the military industrial complex want it to pass. Want to fix the border? Find a way for raytheon to make a few dollars. It will happen overnight.
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Ukraine will pass because most legislators want it. The ones who don't want it are only feeling that way because Trump has a chip on his shoulder against Ukraine. Most legislators want the budget for the border, they few who don't want the increased funding for the border is because Trump doesn't want Biden to have a "win" and instead wait until after the election (if they still have jobs). In other words, most legislators want to do the right thing, but there are people gumming up the works for silly po
Re:So what? (Score:5, Insightful)
Oh, right, because the grumpy orange man told them not to because it's an election year, and all that matters is winning elections.
Putin & Ukraine (Score:2)
True! And thanks for the citation. Let's keep in-mind how Putin and Ukraine fit into all of this. Ukraine hasn't received any US arms since before last OCTOBER because US funding cannot make it's way through Congress. Putin doesn't want to see funding, so neither does Trump, who has instructed Speaker Johnson to drag his feet as long as possible, giving Russia 6 months so far to weaken Ukraine in preparation for Spring fighting. Putin is getting exactly what he wants and America's ally Ukraine is suffering
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Oh, right, because the grumpy orange man told them not to because it's an election year, and all that matters is winning elections.
LOL, you are giving way too much credit to that old fool.
If ANYONE was serious about illegal immigration, they would go after the employers giving money to the illegal immigrants. They never do. Why is that? (hint, illegal immigration is the cheap labor that the Republican party is built upon)
Sounds about right (Score:2)
I had to log back in unfortunately to access last years return. When I finally found the link to download it (I think I had to "start" my return before I had access
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I swapped to H&R awhile back when TurboTax did the lame move to make home mortgage deductions be a part of the ultra super premium deluxe edition. They apologized but no going back. H&R feels better, but at times it just won't do the calculation and I have to do something by hand.
Also, I download and do it on the computer, and save the returns on the computer, so that next year it's a simple import of a local file.
Absolutely true. (Score:4, Insightful)
I just did my taxes with TurboTax - had tried TaxSlayer which has more free/cheap offerings (I use it for my mom-in-law's taxes) but didn't have the payment option I was looking for. Not only does TurboTax keep trying to upsell, it also keeps asking for permission to share my data with world+dog. And if I revisit a section (income or whatever) it asks the same upsell questions again that it asked the first time I went into that section.
I have kids. I don't need anyone else to beg me repeatedly for things.
What is this "claims"? (Score:3)
Isn't it an obvious *fact*? Shouldn't that be "Warren attacks"?
easily solution (Score:2)
how about stop making people pay taxes or at least make it so that you dont require a PhD to file taxes.
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how about stop making people pay taxes or at least make it so that you dont require a PhD to file taxes.
That's the obvious solution... simplify taxes to the point we don't have to write a 200 page novel in order to complete the task. However, if you think companies like H&R Block, Intuit (TurboTax), Jackson-Hewitt, and others are going to go down without a fight, guess again. These tax preparation companies and services are heavily invested in having as complex a set of rules and regulations as possible so that they can make their money. Eliminate this need by repealing the Federal Income Tax and using
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the complex rules have zero to do with software makers, that is U.S. congress and Dept of Revenue
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the complex rules have zero to do with software makers, that is U.S. congress and Dept of Revenue
The rules themselves may not... but simplifying things and not having to do 200 page novels in order to file your taxes does. The software makers and tax preparation companies have built an industry around this... if you simplify the rules, the industry is no longer needed... which means those companies go away... so Block, Intuit, Jackson-Hewitt, et al, will do their level best to lobby Congress to NOT simplify the rules.
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The software is cheap, essentially zero. I'm thinking $20 for tax software is expensive to someone who mashes burgers for a living; they can do their 1040-EZ without software anyway, meanwhile I have long lists of trades and such to import.
Not really seeing the problem with the software companies since the complex IRS rules predate them.
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Not really seeing the problem with the software companies since the complex IRS rules predate them.
So you are saying you do not understand that the software companies and the tax preparation companies will be lobbying Congress to keep the tax rules as complex as possible so they can keep their fiefdom of tax preparation and deciphering all of these complex laws and regulations.
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The rules were complex as possible before software existed. *yawn*
$20 is essentially zero for me and anyone with a real job
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The rules were complex as possible before software existed. *yawn*
Put the events in order:
Now what happens if you simplify the tax rules (take away the first item)? No more need for Block, a subset of Intuit, etc. The house of cards falls. This is why they will lobby Congress to keep things that way because complex tax
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Congress will not simplify tax code, ever. Your "argument" is rotten from the foundation.
Re:easily solution (Score:4, Insightful)
"Flat Tax" does nothing to simplify taxes. Figuring out the tax rate is the simplest part of the process. Look up AGI on a table and there's your percentage. The flat tax is a ruse to help out the wealthy by claiming that it makes tax filing simpler. The tax prep software already severely hurt the manual tax prep industry, it's so much cheaper than going to an accountant or a professional tax prep company, but the tax prep software makes so much money for this that they also want to keep the complexity.
Now, flat tax hurts other things - long term capital gains. These are vital to encourage long term investments, especially in an era when so many companies are hyper focused on quarterly earnings. Buy and hold is better for the economy than churn. And long term investments are no longer just tools for the ultra wealthy, almost everyone has their retirement tied up in long term capital, even if it's hidden behind a pension or 401K.
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"Flat Tax" does nothing to simplify taxes. Figuring out the tax rate is the simplest part of the process. Look up AGI on a table and there's your percentage.
Sure it does. A flat tax would apply the same percentage across everything and eliminate the need for calculating your AGI... which is the worst part of this entire process. Generally speaking, I would prefer FairTax over a flat tax.
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No they don't
That's why the Fairtax (the most often cited flat tax proposal) has a prebate. It addresses the issue of regressive taxation. Although not perfect (since the prebate a
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She's right (Score:3)
I disagree with her on probably most things, but she's right on this. TurboTax is aggressive, and you could make an argument for predatory.
Others correctly point out that people are free to use something else, but I question how much that matters. Fact is, TurboTax is the most popular service, commanding 73% market share in 2021 [secondmeasure.com]. When a company becomes that dominant, I think it's worth looking into their practices to make sure they're above-board.
That all said, I will probably disagree with her over what regulation, if any, should be done. I think the IRS should absolutely have its own system, and it's bonkers it's taken so long just to get a pilot program going (and one that can't even cover everyone in the states in which it's available). Better education of the public on available services would also help. TurboTax should be allowed to upsell and offer premium services, but they should be prevented from using any dark patterns.
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I would add that its a travesty that legislators on both sides of the aisle have created the cluster-mess that is taxation in this country. There are thousands of carve outs, big and small. Most for seemingly good intentions, but add up to a absolute nightmare. It is telling that neither party feels moved to fix any of it. Rather both find it just great to add their special interest to the pile. Then bark about issues on the periphery, like is the IRS hassling this group or that group this month. Th
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Warren wrote to the wrong Feds (Score:1, Funny)
Warren wrote a letter to the FTC – but she should have written a letter to Education Department demanding to know how anybody could get through a US elementary school education without knowing how to easily recognize and effortlessly deal with a-hole high pressure sales marketers.
My experience (Score:2)
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I've used FreeTaxUSA for two years. Even with a Schedule C and state filing, I only paid $14.99. People are going to think I'm a paid shill because I've commented multiple times on this article but I'm just really happy. It gave me equal results to $100+ filing with another option. They'll even let you download the 1040 and worksheet forms while you work and even before paying so you can double check everything.
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You paid $14.99 too much. You should not have to pay a dime for the privilege of giving the government your money. They purposely keep the tax code so complex and so difficult to navigate just to appease Intuit lobbyists, while billionaires don't pay jack shit because they're just taking out loans on assets instead of earning income like the rest of us.
Replace the whole damn thing with a 30% sales tax coupled with social safety net handouts for the low earners and abolish the IRS.
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Oh I could have done it for free for federal. State, I would have to copy the numbers from the generated forms to make that free.
Whatever things should be at the government level, this company is still doing alright.
Re: How about getting rid of the income tax? (Score:3)
You mean a flat tax, which is inherently regressive? Or some other thing? Some states just don't have state taxes, then they ream you with property taxes.
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olt.com (Score:2)
See subject. OLT would have processed and filed that for free.
This is so easy it hurts! (Score:1)
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They literally just did that [slashdot.org].
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TurboTax got my girlfriend to switch to Linux! (Score:1)
The boot sector virus installed by TurboTax years back (mentioned first here [slashdot.org]) persisted until it eventually derailed a forced upgrade from Windows 7, rendering her computer unbootable. This was finally the last straw for her, and as a proof-of-concept, I was allowed to install Linux on the machine so she could launch the old Windows install from a VM and finish her taxes. Years later she now recognizes Linux as inherently superior and no longer uses Windows or TurboTax! Thanks TurboTax!
freetaxusa (Score:2)
umm, if you have a simple enough tax return (most of us do), you can get free federal and $14.99 per state with freetaxusa. A simple search on DDG for "free file tax service" finds them.
Sorry if people aren't TRYING!!!
Alternatively, fix the tax code! (Score:2)
vive la difference (Score:2)
The difference between Turbotax and the gubment is that Turbotax will respond to pressure from customers.