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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 DexterIsADog (2954149) on Tuesday November 19, 2013 @09:06PM (#45469013)
    ...whose name you know. More than once it incorrectly calculated taxes owed, leading both the Fed and State governments to send me a check, saying, "hey, you way overpaid your taxes."

    I'm done with tax software. It's back to a human accountant. Her first consultation with us turned up a $3,400 deduction we had missed a couple of years back. That alone pays for a few years of returns and advice.
    • by ShanghaiBill (739463) on Tuesday November 19, 2013 @09:21PM (#45469123)

      I'm done with tax software. It's back to a human accountant.

      Are you aware that most human accountants use ... tax software?

      Her first consultation with us turned up a $3,400 deduction we had missed a couple of years back. That alone pays for a few years of returns and advice.

      Most likely she found that deduction by running tax software. I use Turbo Tax, but I also keep up on tax law, and changes to the software, so that helps me find deductions a less informed person using the same software, would miss. Software is a tool, it can do more in the hands of a skilled user.

      If you spend a day studying tax law and reading your software's manual, you will save more money than you earn at your job in a month. It is time well spent.

      • by DexterIsADog (2954149) on Tuesday November 19, 2013 @09:31PM (#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.
        • go (Score:5, Insightful)

          by nten (709128) on Tuesday November 19, 2013 @10:09PM (#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.

          • Re:go (Score:5, Interesting)

            by Anonymous Coward on Tuesday November 19, 2013 @11:01PM (#45469621)

            It's not an accident that tax codes are as complicated as they are. My company (one of the two mentioned) spends a ton lobbying Congress to keep the tax laws complicated enough that people cannot reasonably do it with pen and paper without missing something or spending far too long doing it. Yet they don't want to make it so complex that you have to seek professional help. It's a tricky balancing act and it tends to tip towards being too complex because, in that case, they can then direct you to their CPAs that use their expensive tax product and charge a referral fee on top of that. From the CPA perspective, the referral comes with a ton of the information already entered into the system, so they can complete more returns. I find it funny that I've had conversations with the CEO where he talks about how excited he is that his company can so radically simplify the tax experience with software while, at the same time, he's employing lobbyists to make the tax software necessary in the first place.

            However even if there weren't intentional efforts to complicate the tax code, it would still be a lot more complex that you want it to be. Just like computer code that starts off elegant and simple and, through bug fixes, optimizations and new features becomes a tangled web of spaghetti code, the tax code will get more and more changes to close loopholes (bugs) and add new taxes/credits for various things (features). And business tax codes are even worse.

            I'd be more upset about it if I didn't now have a ton of stock in a company that benefits from making the process simple for those willing to fork over ~$100 each year. That, and we get the software for free :-)

          • by Dareth (47614) on Wednesday November 20, 2013 @09:41AM (#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 ktappe (747125) on Tuesday November 19, 2013 @10:37PM (#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 csumpi (2258986)

            ask you a lot of detailed questions about your life events and situation

            But time to answer those lots of detailed questions, is money. Or at least time wasted, from your life.

          • by wytcld (179112)

            I use TaxAct too. Not the online version, but the standalone. However the first year I used it I filed online through them after preparing it locally. The following year I went to file online again and found someone else had beaten me to it. Someone who had information that could only have been obtained from access to my prior year's return. Took me most of a year and help from a senator's office to straighten it out.

            Now, where did the perp get access? The laptop that I only boot into Windows once a year to

        • by mjwx (966435)

          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.

          This, a good tax accountant saves you more than doing it yourself because they know all the loopholes and deductions you can claim without being flagged for an audit.

          • by Sarten-X (1102295)

            Or even if flagged for an audit, as I was, they're able to justify the deductions... Yes, I really did go to grad school, even though the university never filed their paperwork to show my tuition. The supplies and equipment I donated to my church could be deducted, but I just had to get my minister to write a quick signed letter. The investment income I had that year wasn't all taxable, so it didn't all need to be declared as taxable income like the IRS claimed.

            Software's great for an estimate, and those es

        • by Darinbob (1142669)

          It seems odd for me to use a tax service, since they'd just ask the same questions turbo tax asks, and the most difficult part for me is often just gathering up all the necessary paperwork. Not much time saved, plus added inconvenience of setting up appointments and such. I doubt they'll find any non-obvious savings, since I don't have a variety of investments, I don't day trade, I don't have unusual tax situations, etc.

      • by Anrego (830717) *

        If you spend a day studying tax law and reading your software's manual, you will save more money than you earn at your job in a month. It is time well spent.

        For personal finances I don't feel this way. I suspect it would take the equivalent or more of the time spent working during that theoretical month to gain/maintain that knowledge, and (for me at least) would be an extremely boring and unpleasant chore. I'd rather take the hit and spend that time doing something I enjoy. Money isn't everything, or we'd all probably be lawyers ;p

      • Exactly. Tax software is not somehow an exception to "garbage in/garbage out". It will only discover what you tell it about.

      • They do but none of them use Turbo Tax. Their stuff is A LOT more expensive than that. On a side note, modern pro tax programs all support an outsourcing button where all your shit gets sent to India to be computed. I recommend you verify with any accountant you use (in writing) that they do not outsource your tax forms.

        • just what I said, too. MAKE SURE they don't send it offshore.

          get them to sign a form that you create stating this exactly. all work will be done by person (xyz), signed by him and this person sits in office (abc). something to that effect.

          we have to stop this outsourcing shit before it gets even more out of hand than it already is. there are huge privacy issues at stake here and once it leaves the country, anything can happen to that info.

      • by csumpi (2258986)

        Are you aware that most human accountants use ... tax software?

        Yes. But theirs is better. And they already know how to use it.

        They also have knowledge of the tax code, which even if not complete, much more than mine, yours, and everyone's who commented on this article, combined.

        • by Darinbob (1142669)

          And they charge a ton of money for it, more money than they'd likely save by finding obscure loopholes for my situation.

      • by osu-neko (2604)

        Are you aware that most human accountants use ... tax software?

        I assume most experts in their field use software that is relevant to their field of expertise. I also assume they use it more effectively than I would, given the fact that I use the software relevant to my profession far more effectively than a non-expert possibly could. I assume I'm not a special snowflake in that regard, and thus this is a reasonable generalization.

        If you spend a day studying tax law and reading your software's manual, you will save more money than you earn at your job in a month. It is time well spent.

        Wrong analysis. If we assume (and this is a big assumption) that I save as much as the professional I could hire would, then it doesn't ma

      • by gravis777 (123605)

        Are you aware that most human accountants use ... tax software?

        Truthfully, unless you go to a person who specializes in taxes, and has done so for years, I find that the online tax software is more efficiant than the human accountants. Many places, such as H&R Block, that sets up tax advisors in Walmart and places like that, hire out-of-work people, send them to school for a couple of weeks, hire them for about 3-4 months and pay them around $10 an hour. I know people who have done it. Many can hardly b

    • by whoever57 (658626)

      Her first consultation with us turned up a $3,400 deduction we had missed a couple of years back.

      And some years ago, I proved to my accountant that she was wrong about a deduction she claimed we were not entitled to. So what's your point? Two anecdotes don't prove anything.

      • Whoa, Perry Mason, slow down! I wasn't aware I needed to "prove anything".

        I related my experience, in which tax software made repeated mistakes, and then I used a human who did a better job. How in the world did my simple story get your panties in such a wad?
      • by ColdWetDog (752185) on Tuesday November 19, 2013 @09:59PM (#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.

        • by JJJJust (908929)

          IRS said you owed $68,000. Accountant said you were due back $5,000.

          Since this is an anecdote about ineffective TurboTax, what did TurboTax say you owed/were due?

        • the last time I used tax software on my own, I followed all the simple instructions (my taxes were not all that complicated) and I got a letter from the IRS saying I owed something like $10k!

          I freaked out, of course.

          luckily, I had the name of the tax guy I used a long time ago (when I had a complicated return) and I brought my stuff over to him.

          this is the most amazing part: I brought the stuff to him on a tuesday and by wednesday mail delivery time, the completed return was PHYSICALLY in my mailbox. what

          • by Darinbob (1142669)

            What sort of deductions? Seriously, I can't think of anything significant that would apply to me that I don't know of. Certainly not enough that it could pay for a CPA's time. Sure, if I inherited parent's estate it would be complex and I'd try to get some help for that year, or if some other unusual situation came up, but for typical use the tax software will handle it.

    • I've used the Canadian version of turbo tax for years without any problems, but my taxes are pretty simple.

      I'm not sure how asking for a bunch of anecdotes will help you verify how good tax software is. Maybe there is study or review on this subject somewhere.

    • there are humans and then there are humans.

      don't bother using a 'send it away to india' cheap service. they will fuck your shit up worse than a $9 tax program.

      if you want it done right, make sure it never gets sent offshore and its done by guys with white hair (ie, older guys). age does matter and experience is worth paying for. young guys don't know everything, but older guys generally more aware of how things work in the real world.

      if you have anything other than trivial tax returns, find a real accoun

    • by X0563511 (793323)

      If you have the sort of tax situation where software can make/break that kind of deduction or over/underpayment, you really shouldn't be using tax software yourself anyway. You can probably (and should!) have a professional helping you to handle your taxes.

      If you just need to file a 1040-EZ and don't want to print and mail in the paperwork yourself, it works just fine.

  • by GlobalEcho (26240) on Tuesday November 19, 2013 @09:08PM (#45469029)

    Given the recent revelations about NSA spying, I refuse to use these services. The risk is simply too high that the government might see my tax returns.

    • Crap, I used all my mod points yesterday!
    • by shentino (1139071)

      Are IRS audits worse than NSA snooping?

      • by Anrego (830717) * on Tuesday November 19, 2013 @09:37PM (#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.

      • by 6ULDV8 (226100)

        Only because of the point of entry.

    • by melikamp (631205)
      And more to the point: I will fully trust the online tax software if it's free (libre), secure against eavesdroppers, and operated by the tax-collecting government agency itself.
  • Australia (Score:5, Informative)

    by cheater512 (783349) <nick@nickstallman.net> on Tuesday November 19, 2013 @09:09PM (#45469039) Homepage

    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.

    • Re:Australia (Score:5, Insightful)

      by fuzzyfuzzyfungus (1223518) on Tuesday November 19, 2013 @09:34PM (#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.

      • Re:Australia (Score:4, Interesting)

        by stinerman (812158) <nathan.stine@NOSpaM.gmail.com> on Tuesday November 19, 2013 @10:13PM (#45469439) Homepage

        Yeah, I mentioned that at work once. That in foreign countries your return is pretty much done for you, and you just sign off on it. If it isn't correct you provide proof and then send that amendment back in. I got an incredulous stare and an "Oh, that'd be great for the government. They could say whatever they wanted and people would just pay up."

        *sigh*

        A good many people have no idea that the IRS already has all your W-2s and could fill out a simple 1040-EZ on your behalf. Sure, when you're itemizing it would get a bit more complicated, but for the vast majority of folks who don't itemize, there is no reason that the IRS can't have everything filled out for you, and all you need to do is sign and return.

    • by ktappe (747125)
      See, that's exactly how the U.S. should do it. It is moronic that we have to pay 3rd parties to submit data and money to the government. But we are responsible if the data is wrong, not the bad programmers.
  • Come on, we all know that if you use online tax software then the NSA can get access to your tax information! They spent BILLIONS of dollars in sophisticated backdoor technology so they can read all of our tax returns!

    • Re:It's the NSA!!! (Score:5, Interesting)

      by kamapuaa (555446) on Tuesday November 19, 2013 @09:18PM (#45469093) Homepage

      I realize it's a joke, but legally the government outside the IRS isn't allowed to look at your tax returns. If you are a pimp or a drug dealer, you must file taxes with your correct occupation, however these taxes are not admissible as evidence against you, and law enforcement doesn't have access to it to point you out as a drug dealer.

      Theoretically anyway.

      There's been some funny side effects to the law, such as a prostitute who argued that her services weren't as much as the government claimed and she didn't owe so many back taxes. Congress passed a law that only the cost of goods sold count against revenue for dealing drugs (you can't include the cost of advertising) - however breast implants are a legitimate tax deduction as long as they're so large that they're purely for professional good and not personal enjoyment. And of course Al Capone going to jail on tax evasion, of all things.

      • Re:It's the NSA!!! (Score:5, Informative)

        by Shakrai (717556) * on Tuesday November 19, 2013 @09:38PM (#45469235) Journal

        but legally the government outside the IRS isn't allowed to look at your tax returns

        Unless you're buying health insurance in one of the new Obamacare exchanges. Or applying for a FHA mortgage. Or you happen to be the subject of an ongoing criminal investigation. Your State Government can access it too, if they have an income tax and wish to match up your State return to the Federal one. The IRS also shares returns with SSA.

        There's also a multitude of Federal and State agencies that can access your tax account, if not your actual returns. The Department of State will check with the IRS before they issue or renew a passport, for the purpose of collecting foreign income taxes and denying passports to serious tax scofflaws. Child support enforcement agencies can seize refunds, so they've got a mechanism of communication with the IRS too.

      • Re:It's the NSA!!! (Score:5, Informative)

        by JJJJust (908929) <JJJJust@NOspam.gmail.com> on Tuesday November 19, 2013 @09:43PM (#45469267)

        I realize it's a joke, but legally the government outside the IRS isn't allowed to look at your tax returns. If you are a pimp or a drug dealer, you must file taxes with your correct occupation, however these taxes are not admissible as evidence against you, and law enforcement doesn't have access to it to point you out as a drug dealer.

        Theoretically anyway.

        I don't buy this.

        Title 26, United States Code, Section 6103 states:

        (i) Disclosure to Federal officers or employees for administration of Federal laws not relating to tax administration
        (1) Disclosure of returns and return information for use in criminal investigations
        (A) In general
        Except as provided in paragraph (6), any return or return information with respect to any specified taxable period or periods shall, pursuant to and upon the grant of an ex parte order by a Federal district court judge or magistrate judge under subparagraph (B), be open (but only to the extent necessary as provided in such order) to inspection by, or disclosure to, officers and employees of any Federal agency who are personally and directly engaged in—
        (i) preparation for any judicial or administrative proceeding pertaining to the enforcement of a specifically designated Federal criminal statute (not involving tax administration) to which the United States or such agency is or may be a party,
        (ii) any investigation which may result in such a proceeding, or
        (iii) any Federal grand jury proceeding pertaining to enforcement of such a criminal statute to which the United States or such agency is or may be a party,
        solely for the use of such officers and employees in such preparation, investigation, or grand jury proceeding.

        (4) Use of certain disclosed returns and return information in judicial or administrative proceedings
        (A) Returns and taxpayer return information
        Except as provided in subparagraph (C), any return or taxpayer return information obtained under paragraph (1) or (7)(C) may be disclosed in any judicial or administrative proceeding pertaining to enforcement of a specifically designated Federal criminal statute or related civil forfeiture (not involving tax administration) to which the United States or a Federal agency is a party—
        (i) if the court finds that such return or taxpayer return information is probative of a matter in issue relevant in establishing the commission of a crime or the guilt or liability of a party, or
        (ii) to the extent required by order of the court pursuant to section 3500 of title 18, United States Code, or rule 16 of the Federal Rules of Criminal Procedure.

  • by Kardos (1348077) on Tuesday November 19, 2013 @09:13PM (#45469063)

    With local TurboTax, you're just running closed source software. However, you can quarantine it such that it is unable to transmit anything over the tubes, and print the result, limiting the worst case scenario to incorrectly filled out forms.

    With online tax prep, you're sending all your details to some online server somewhere, and hoping that they only do the computations and wipe all the data. But they won't. It'll be stored so next year it'll be "half filled in already for your convenience". If you value your financial privacy, you would not use an online tax service.

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      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 par
    • Re:No, you can't (Score:5, Insightful)

      by ArbitraryName (3391191) on Tuesday November 19, 2013 @09:46PM (#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 X0563511 (793323)

      If I can't trust H&R Block to handle my financial data, I have a very big problem, and so do all those people who use them for accounting (and in-person tax handling).

    • "If you value your financial privacy" is such a loaded phrase.

      Risk. What's the worst that could happen? Well, your AGI can be used as a form of identity. So can your SSN. Your employment history as well is used as identity (you will be quizzed on this when applying for loans). You file any address changes and your current address, and your address history is used as identity (same deal).

      Probability of any of these being hijacked is roughly identical. It's low: compound trustworthiness of the org

  • I don't keep any tax data on my PC for security reasons. Had an iMac a while ago that blew up and it was a pain to get the drive out before trashing the thing. Easier just to keep the data in the tax cloud.

    • I don't think that word means what you think it means. Reliable is probably what you're after.

    • by JJJJust (908929)

      I don't keep any tax data on my PC for security reasons. Had an iMac a while ago that blew up and it was a pain to get the drive out before trashing the thing. Easier just to keep the data in the tax cloud.

      The fact that you couldn't get the drive out isn't a security issue, it's an Apple engineering issue.

    • You are going about the secure data destruction business all wrong... Once the computer is toast, anything between you and the platters is just 'collateral damage'. A rifle, angle grinder, or cutting torch will go right through an iMac without much difficulty.
    • by X0563511 (793323)

      You've heard of this wonderful thing we call encryption, right?

  • by David_W (35680) on Tuesday November 19, 2013 @09:20PM (#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.

    • You can file a FOIA request to the NSA. They make backups of your hard drive every month.
    • A word of caution, though. For reasons that, no doubt, have to do with fundamental difficulties in computer science, the rapid changes in the storage of integers and trivial floats; rather than being money-grubbing shitweasels, vendors of standalone accounting/tax-prep packages have a... spotty... record when it comes to compatibility of older files with newer clients.

      I recently had the pleasure of migrating some antique version of Quicken to the present. The "Well, just open the old file with the new so
      • The officially-recommended(but not supported, or guaranteed to produce accurate results) solution was to take the oldest file, install an intermediate version a few years newer than that file, open the file with the intermediate version, allow it to convert, check the results manually, do the same with a second intermediate version, and then finally take the output from the second intermediate version and import it into the current version.

        .

        I don't know about you, but the first time anyone recommended anything remotely similar to that for their software would cause me to terminate the program with extreme prejudice, take the CD's and shred them into tiny, sharp pieces and mail them to company wrapped up in a pipe bomb.

        • Oh, believe me, the only vestiges of politeness I preserved in that situation were for the poor sucker who had dutifully been typing her records in for years, and stood to lose them if they couldn't be migrated. Quicken... they can go to the special hell.
      • This was sort-of my understanding of the big popular tax software also,,,,, that if you use the online services or not, the package is still only going to function for one year. And it's no accident.

        A friend spent a number of hours over a few weeks entering tax info into a (big-well-known) program they had purchased the previous tax-year, figuring they'd just print it out and mail everything in, because they couldn't e-file it because it wasn't a current version,,,, and guess what? "Sorry, you need an upg
        • by X0563511 (793323)

          Tax code changes year to year. It would have been irresponsible to allow you to do that.

          That said, it sure was awfully nice that they waited until the end of the process to tell you that...

    • by X0563511 (793323)

      H&R Block's stuff prints out all the worksheets and such too, not just the final return. Not sure if others do it, but it's handy.

      1, you have all the data available
      2, you know how they calculated things

      Both very handy items to have around.

  • by guanxi (216397) on Tuesday November 19, 2013 @09:21PM (#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 Kardos (1348077)

      Well the IRS still has the mother lode, the best target. But you're exactly right; if they are keeping all that info, they'll soon be the second best target. And when they get broken into, it'll be much much worse than the recent Adobe screwup.

    • by DaHat (247651)

      can you imagine a better target than servers holding everyone's tax returns?

      Yes, healthcare.gov.

      Read in horror: https://www.trustedsec.com/files/CONGRESS_Hearing_HealthCareSEC_FINAL_v1.1.pdf [trustedsec.com]

      Or, if you aren't keen on long reading, note that the website actually advertises the fact that it is the target of SQL injection attacks via it's search function: http://www.redstate.com/2013/11/18/healthcare-gov-site-advertising-sql-injection-attacks/ [redstate.com]

      • by guanxi (216397)

        (Thanks. If you could post a source besides a random PDF (which many people on /. will hesitate to download) and highly partisan, anti-Obamacare RedState, it would help your point and be informative for the rest of us.)

        • by DaHat (247651)

          Or... you could go beyond your close-mindedness, trust that your web browser will simply open the PDF up for you (as mine does)... and maybe take with a grain of salt what the evil RedState has to say... doubly so when you do not know how I arrived at choosing that link (hint, it was a quick search and was the top relevant result).

          Just for you, here is another link, but about the PDF above & a quote from the CEO of TrustedSEC who was testifying in Washington today:

          “Hackers are definitely after it,

          • by Kardos (1348077)

            The point was that PDFs are, thanks to Adobe, attack vectors (http://www.iceni.com/blog/2012-was-the-year-for-pdf-viruses-trojans-and-exploits/) and asking someone to open one is akin to asking them to run a binary email attachment. Your "trust me, I'm a doctor" response does not address that concern in the least.

          • by guanxi (216397)

            RedState, Fox, etc. have lied to me consistently. I don't think it's close-minded to learn from that and disregard them. I think the Huffington Post or Daily Kos are prone to exaggeration and don't rely them either, but there's less outright lying and deceit.

  • For security and privacy, I'd say it's about equal. I don't recall any breaches of that data turning up, and if someone had breached it I'd think news would've turned up. That kind of breach is the kind the perps or someone in the know couldn't resist bragging about.

    For legal compliance purposes, you have to trust the on-line services less. The IRS puts the obligation to have the information on you, regardless of who you used to prepare your return. You need to make sure you've got copies of both the return

  • by NicBenjamin (2124018) on Tuesday November 19, 2013 @09:34PM (#45469199)

    If you know the Tax Code ok, or you actually have simple taxes*, software works fine.

    You have to be somewhat familiar with the tax code because there's no easy way for us to translate tax law into simple English, so it's very easy for people to misinterpret one of the numerous questions the software asks. If you do that you a) don't get a deduction you deserve or b) do take a deduction and get screwed if you get audited. I'm a bit out-of-practice, but the student debt/tuition credit/HOPE credit/etc. nexus of Feds giving people tax breaks for paying for college in particular is very easy to screw up.

    *Everyone I have ever met says they have simple taxes. Then they drop the annuity on the table and call it a W2. If you have any income besides interest on a bank account or a W2 you do not have a tax form H and R Block defines as "simple." You really need to read the paperwork that you are sent because many people take a chintzy $350 job helping their cousin cater a banquet, get a 1099, and are then surprised that I am legally required to put that on a Schedule SE and a Schedule C or C-EZ attached to a full 1040, and by the time you pay me for all those forms AND the self-employment tax you're losing money. The really big numbers at the top will tell you exactly what form it is. They'll be 1098, 1099, or W2.

  • by bhlowe (1803290) on Tuesday November 19, 2013 @09:43PM (#45469263)
    I've been using TaxAct.com for 4+ years for personal taxes and it is fantastic. Super cheap and reliable.. All information from previous years is stored on their servers so each year it gets easier to file. Unlike healthcare.gov, I trust their site, it works, is easy to use, cheaper than anything else, and they didn't the taxpayers a half billion dollars on the rollout.
  • ... since almost inevitably the final result is e-filed, either by you or by your tax preparer.

    YMMV, but a couple of things came to my mind.

    First, if you're asking this question it's really likely that doing your own taxes isn't saving you anything. An accountant or similar preparer can do them faster, and almost always finds savings that you won't. Plus, at least in Canada, if the tax people come a knockin' it will be your preparer who deals with them, not you.

    Second, if you're one of those peop
  • Esq. (Score:4, Funny)

    by PopeRatzo (965947) on Tuesday November 19, 2013 @10:21PM (#45469477) Homepage Journal

    You guys are still paying taxes? Suckers...

    Last year, I declared my basement the Sovereign Kingdom of Ratzistan, and myself the Lord High Exalted Mystic Ruler for Life. Not only will I not be paying taxes any more, but I've just sent the US Government a bill for $100,000 for the easement of my front door where they insist on putting their so-called "mail" and "restraining orders" and such. I talked to a lawyer that I met on Craig's List and he says I got a great case and instead of taking a percentage, he charged me a flat fee of $1200 to set me up with all the proper documents. They look really nice, too with a gold foil trim and big official seal.

    You laugh now, but when I get that $100,000 (well, it'll be $98,800, after I pay back the nice Italian guy at the bar who lent me the $1200 for the lawyer), I'm gonna buy myself a sweet gaming rig and drop the rest on the Broncos to win the Super Bowl. Then we'll see who's laughing.

  • by students (763488) on Tuesday November 19, 2013 @10:32PM (#45469503) Homepage Journal

    figure out just how much they owe the country, without reading the tens of thousands of pages of IRS forms guidance.

    I have never found it challenging to file my taxes using just the information from IRS.gov [irs.gov]. IRS documents usually explain things very well.

  • One version of TurboTax a couple of years ago transmitted every entry I did on my machine in this software package to some outside entity.
    Add a number - firewall comes up asking for permission to connect. Move around - same thing.
    May have been some debugging feature but who the hell needs to see every move I do in some debug-log, if this was the case.

    Do I trust the Co? Sure no, their attempts to tie you in and milk $$'s out of you are disgusting.
  • "can you trust your return information any more or less to an online platform than you do to the equivalent software on your computer?"

    Well, the information on your tax return will eventually be sent to the Internal Revenue Service. You may not know this, but the IRS is part of the same United States Federal Government that also has the NSA spying on you. Once the IRS has the information, you are hosed.

    I would not advise shorting the IRS. That is a very bad idea. They can be downright chippy about it. Prote

  • So I started using TaxSlayer.com because they offer cheap $9.95 federal filing and a discounted state filing and supported multi-state filing. Everything was great and it was a nice web interface, detailed access to the actual forms and good questions asked.

    I am familiar with the tax forms enough to do my own semi-complicated taxes for a full time job and a side-business sole-proprietorship that includes complex self-employment schedules and amortization and appreciation of equipment purchases, entertainme

  • I tried TurboTax before, granted it was probably a decade ago. After several hours of trying to figure out how to correclty answer questions, gave up.

    Just go to an accountant. You can get your taxes prepared and signed for $100-$200. The forms will be filled out correctly. You save a lot of time. You save money by having someone who knows the tax code get you more money back (or pay less taxes).

    And spraying my info into the "cloud"? Yeah, no thank you.
  • Intuit has already proven that you can not trust Turbo Tax installed on your computer.

    http://slashdot.org/story/03/02/16/1549232/ [slashdot.org]

Any sufficiently advanced bug is indistinguishable from a feature. -- Rich Kulawiec

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