Item — HN Reader

In addition to the penalty you'd incur, the IRS is unlikely to dig into your deductions and credits with your fervor, so they will likely compute a number that is "quite suboptimal".

There are also multiple ways of doing things, and picking one path may be strategic to you (if you expect more or less income in the following years). Giving up on this flexibility and its ramifications will affect your outcome negatively.

For simple filings, yes, it should be possible for them to give you a bill that is close to what you'd compute yourself.

This is my experience for the US system.

3 comments

> the IRS is unlikely to dig into your deductions and credits with your fervor, so they will likely compute a number that is "quite suboptimal"

Which would be fine by me, in all honesty. Let the IRS compute a "basic" return for you. If you want one that digs deep and actively minimizes your tax bill, then you can get your taxes done in one of the more traditional ways.

My (very limited, anecdotal) experience is the opposite. When filing in ~'08, there was some stimulus credit I didn't claim, like $400, which I was eligible for.

After filing, I got a letter that said (in more formal language) "oh, you missed this, we're direct depositing it."

In any case, even for stuff the IRS might legitimately not know about, it would still be a tremendous simplification to reduce it down to, "Hey, here's a list of things that have deductions or credits. If you think something's missing, enter the info."

I think the general idea would be for the IRS to provide you with the completed tax return. This should be sufficient for a vast majority of people who only earn employment income.

You would then review the return and could update/file a return if you have additional deductions or business income that would not otherwise be reported to the IRS.

I believe the UK and some other European countries already have this system.

The UK tends to do its tax incentives a different way.

The government favours them as subsidies at point of purchase, rather than something you do at the end of the year. That actually works out a lot nicer as a tax payer, as you don't need to have the full amount of money up-front, and also means you're way less likely to miss out on some of them.

For maybe 90% of UK employees you don't need to file any kind of tax return, your employer handles all that for you.

If you do have some uncomplicated deductions (eg. you are a higher rate tax payer and have made large donations to charity, or have business expenses which were not paid by your employer) you can phone the tax office or ammend them online.

Only those in more complicated situtations need to file anything, which most people do through the tax office's website.