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Ask Slashdot: Can You Trust Online Tax Software? 237

Posted by Soulskill
from the how-to-win-the-audit-lottery dept.
An anonymous reader writes "TurboTax from Intuit and H&R Block's own tax package have been perennial mainstays for U.S. citizens trying to use software to figure out just how much they owe the country, without reading the tens of thousands of pages of IRS forms guidance. With tax season just around the corner, the new online platforms from both providers raise an interesting question: can you trust your return information any more or less to an online platform than you do to the equivalent software on your computer?"
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Ask Slashdot: Can You Trust Online Tax Software?

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  • by David_W (35680) on Tuesday November 19, 2013 @08:20PM (#45469109)

    A friend of mine made an interesting point to me a few years ago, and caused me to switch from online versions to the local ones you install on your system. With the local versions, you get to keep the data files. The online versions tend to purge from year-to-year, or at least after a couple years. If you want to refer to an older return, be it because you are being audited, or just to help figure out something on this year's forms, you'll have everything (worksheets, forms, etc.) with the local version, assuming you back up the software and data files. Online, you probably just have a PDF of whatever finally got submitted to the IRS, and that's it.

    So yeah, online versions work, but local ones give you more control.

  • by guanxi (216397) on Tuesday November 19, 2013 @08:21PM (#45469119)

    For attackers trying to collect personal information -- for identity theft, for dirt, for spying -- can you imagine a better target than servers holding everyone's tax returns?

    Remember, security needs to make an attack more costly than the data is worth to the attacker. What responsibility / liability do vendors have regarding security for these servers? A breach may not cost them very much.

    I file using paper.

  • by DexterIsADog (2954149) on Tuesday November 19, 2013 @08:31PM (#45469175)
    No. No, I won't save more money than I earn at my job in a month. There's not that much more to save. And I earn a lot. Enough that I've decided not to spend my leisure time becoming a tax accountant - you know, someone whose *job* it is to know taxes. Software doesn't mean shit, it's the person using it *and* their knowledge.

    I could also paint my entire house, but I don't feel like doing that either.

    I don't regard spending time learning tax regulations as time well spent. And, wrong again... she didn't find the deduction using tax software, but by looking at our returns, how we work, and then interviewing us. You know, employing skills that software doesn't do well.

    Other than that, your analysis was spot on.
  • Re:No, you can't (Score:2, Insightful)

    by Anonymous Coward on Tuesday November 19, 2013 @08:31PM (#45469177)
    My take on this is to log in and provide hypothetical information under a pseudonym. I let it come up with whatever it will... then use that as a guide to hand fill in my official paper return.

    I highly resent being compelled to share my financial state of affairs with anyone, even the government, as much as they resent my prying into their affairs - such as how they are spending that which they extracted from me.

    Even more so, I resent being compelled to share personal private information to third parties.

    I get the idea the time is fast approaching that I will no longer be allowed to fill in my tax return by hand and be compelled to render the most intimate details of my life to organizations "working with" my government.

    My government has given ample evidence that they are not to be trusted. They give all indication of protecting the wolves from the sheep. The sheep have no business hiding when the wolves are hungry, but it's quite OK for the wolves to don sheep's clothing and rat them out. Any sheep that dares rat out a wolf will be dealt with severely ( Snowden ).
  • Re:Australia (Score:5, Insightful)

    by fuzzyfuzzyfungus (1223518) on Tuesday November 19, 2013 @08:34PM (#45469203) Journal

    Been doing it for years with government provided software.

    Mind you it doesn't say 'cloud' every 5 words, but it submits it all online and even auto fills in a lot of your data from government databases. Not sure how long it has been available for but many many years without incident.

    Oh and its free.

    Thankfully, Intuit, Inc. (by a totally crazy coincidence also the maker of TurboTax(tm), a market-leading tax software solution) has been fighting to save us from communism [propublica.org]...

    So here in the Land of the Free, the IRS probably has the information it needs anyway (for fraud detection, and because Joe Worker's employer already reports it); but we can't let them destroy the free market, and capitalism itself, by making the process any easier. Instead, you just hand over your money and personal information to an 'Authorized e-File Provider' [irs.gov] and be glad that you live in the bestest ever country on earth.

    We will be rolling out a similar system for health insurance soon.

  • by Anrego (830717) * on Tuesday November 19, 2013 @08:37PM (#45469227)

    Yes!

    An audit requires a large amount of time and effort on the part of the victim. It's an extremely time consuming and frustrating process if you have _simple_ finances. The NSA spying is largely transparent and non-intrusive.

  • Re:No, you can't (Score:5, Insightful)

    by ArbitraryName (3391191) on Tuesday November 19, 2013 @08:46PM (#45469287)
    All of your tax information like your W-2 and various 1099s are provided to you by other people. People who keep that data on their servers. I'm not sure what sort of "financial privacy" you think you have, but the US tax system doesn't allow for much, if any.
  • by ColdWetDog (752185) on Tuesday November 19, 2013 @08:59PM (#45469369) Homepage

    OK, how about three anecdotes? Last time I used TurboTax I got a polite letter from the IRS saying I owed $68,000. I ran over to an accountant who reviewed our return, ended up getting us a refund of over $5000 and more than payed for herself.

    Turbo Tax is OK, but the tax code is so complicated that if you have anything other than 'normal' income (ie, W2's and 1099's) you may miss out on big problems or rewards. No more TT for me. Actually, the accountant does use some form of Intuit software, but it's far beyond my interests and abilities. And I agree with other posters. I could probably learn the stuff, but would rather start pulling out my toenails with pliers, thankyouverymuch.

  • go (Score:5, Insightful)

    by nten (709128) on Tuesday November 19, 2013 @09:09PM (#45469421)

    I have heard circumstances like this multiple times. It really bothers me that we have invented a tax code that is on par with the game "go" as far as its ability to be computerized. There are extremely talented individuals making a living interpreting our tax code. Those same people could be doing something far more useful to society than they are now, but we have created an entire industry that sucks them away from more useful endeavors by cobbling together a tax code that is a mashup of bribes to interest groups, bribes to voters, authoritarian interference with our individual lives, and a glass ceiling protecting the one percent. If any highschool graduate can't just sit down with a calculator and pay the *exact* amount owed, we have done something wrong.

  • by ktappe (747125) on Tuesday November 19, 2013 @09:37PM (#45469521)

    You know, employing skills that software doesn't do well..

    I'm not following this. Software (I use TaxAct) is quite good at making sure to ask you a lot of detailed questions about your life events and situation. Software can make sure to ask these questions and not forget one like a human can. If you, the end-user, neglect to check a box that says (for example), "I donated a car this year", then that's your fault not the software's. If you're trying to say the accountant would ask "Hey, are you sure you didn't donate a car?" and you respond "Oh yeah...you're right, I did," then OK, the human is better at coaxing info out of you (or inducing you to lie.) Personally, I'll stick to software.

  • by Anonymous Coward on Tuesday November 19, 2013 @11:18PM (#45469919)

    The janitor my company uses is incorporated, which means we run no risk of having his contractor status challenged, or dealing payroll tax overhead, etc. So we are willing to pay him more than we would pay a non-incorporated individual. If you are convinced that tax breaks are only for fat cats, then you will always be a skinny cat.

    Does your janitor realize that you are actually screwing him over in the long run by forcing him into a contractor status rather than paying him as a regular employee (presumably with benefits...)?

  • by Dareth (47614) on Wednesday November 20, 2013 @08:41AM (#45471945)

    I heard that in other countries the government calculates the taxes and sends a bill. How can it make sense that the government that makes the rules leaves it to the people to figure out what/if they owe and only look at it after the fact? How does that make any sense at all?

  • by Anonymous Coward on Wednesday November 20, 2013 @04:04PM (#45476053)
    One of the effects of the extremely complex tax code is that it discourages small businesses. Because they therefore have less competition, large businesses can make more money. The rich get richer. It's an anti-democratic process.

"Love your country but never trust its government." -- from a hand-painted road sign in central Pennsylvania

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