Are there any statistics on how many individuals do their own tax returns using tax software (such as turbotax) or without just the old fashioned way?
If you could point me to something I would be most appreciative; google doesn't come up with much.
based on my informal survey, I think I am the only one.
: based on my informal survey, I think I am the only one.
No you are not. I make it 2!
Wendy
Well, I'm one too, and the TurboTax people seem to be making a living ...
More to the point; how many members of Congress do their own? If they did their own, it would not be long before the process became much simpler. If your member of Congress did their own, would that make it more likely for you to reelect them?
You are making an implicit assumption that everyone wants their tax return to be more simple. I think some folks relish the complexity.
Actually, it would be at least 2-3 years before the process maybe would become more simple. Simply having to do their own tax return wouldn't make much of a dent, as is the case for probably the majority of self-preparers. Like them, Congresscritters can send in anything they think is reasonable and that they are willing to sign on, as long as they include at least the basic info reported annually by 3rd parties. Severe confidentiality constraints pretty much guarantee that any sins of omission they might commit will never come to light, just as with Mitt Romney.
Why do I say 2-3 years? Because that is how long on average it would take for IRS audit letters to start being sent out, let alone anyone having to meet some hard collection deadline.
How many Congressional individual tax returns would contain "nanny tax" errors, just for starters? Then, would their basis and carryover numbers (i.e. multi-year tax issues) ever really be examined in any detail? The majority of those errors might never be uncovered.
What I don't really know, is just how complicated is the financial life of the average Congresscritter? Do they all have complicated investments, off-shore or otherwise, and business enterprises? Aren't at least a few of them just ordinary one or two-paycheck families with a house and kids?
I doubt that. They probably have lots of investments and would have their accountants do it for them just because of the amount of data, not the complexity of the calculations.
What percentage of individuals are eligible to file 1040A or 1040EZ?
Right. Imagine a poll with the following questions:
You'll probably get lots of votes for #1, but not nearly as many for the others. Everyone would like the tax code to be simpler, but few people would want it changed in a way that might cause THEIR taxes to go up. Congress could probably do it in a way that's revenue neutral (when they remove deductions, they also lower the base tax rates), but that's an average across all taxpayers -- some will see their taxes go down, while others will see them go up.
Thanks much; that tells me how many people self efiled, which is a big piece of what I am looking for. But it does not tell me how many people self paper filed. I suppose the first approximation would be to assume the proportion was the same as on the efile.
7.5 million returns were not processed?
While the number of visits to irs.gov might look like the web site is providing a valuable service, each year I have to return MULTIPLE times because forms are not all ready by January 1, and they dribble out to the web site willy nilly. A decrease in the number of visits would indicate to me they are doing a better job.
wow - 90% are e-filed.
This one gives you statistics on the whole set of tax returns, but is only up to the 2011 tax year.
Of the self prepared paper returns (10.8% of the total), 46.5% are prepared by software
Of the paid preparer paper returns (4.5% of the total), 81.5% are prepared by software
So a total of 6.6% of returns are preapred without software, presumably by pen and paper method: 5.8% self prepared and 0.8% by paid preparers.
So we still have 1.1M paid preparer prepared returns done with pen and paper!
I wonder where volunteer prepares go in this classifcation scheme? My father, a retired (non-certified) accountant, used to prepare returns for seniors and low income folks using pen and paper, under some program sponsored [I think] by the IRS. Then one year they wanted him to be trained on some software to prepare and file returns electronically. He dropped out of the program.
to the 2011 tax year.
What does "V-coded" mean?
How can one tell whether a paper filed return is prepared by software or not? Hand-written entries could be transcribed from a display screen, self-prepared can be done using fillable forms...
I've often suspected each software vendor puts some kind of unique code at the bottom of the printed page, but does the IRS keypunch that in to their system?
Paid preparers doing more than ten returns are required to e-file, unless taxpayer opts out, so the amount of PPPF returns (Paid Preparer Paper Filed) should become insignificant over time. This is a fairly new requirement that was phased in just over the last few years, so even last year's statistics might not be representative of this year or next.
There is also an unknown number of paid preparers who don't fill out the paid preparer block on the returns they do, which also skews the number. The IRS is trying to crack down on these dishonest and unethical preparers, probably with mixed results.
This is a snapshot taken a couple of days after the filing deadline. I assume that tens of millions came in on 4/15 and the couple of days following, which count are received but not processed.
Is this only 1040 returns? There are other forms, like 1120-H for condos, which are very easy to fill out and there is a flat tax of 30% on unqualified income (typically interest). No tax on condo fees, no deduction for qualified expenses. Because it's so easy this form is usually done by pen and paper. I don't know even if there is software for it.
Have no idea about the mechanics, but v-coded seems to be IRS speak for computer generated paper return. I'm assuming that they print out in a very specific format and can be scanned accurately because of that, but that's just me speculating.
Not just unknown, but probably unknowable. Surely this must be a very small number? Why would the customer not insist on it? Are there really people who are preparing tax returns for pay that are not properly authorized? I don't even know who authorizes/licenses/certifies paid preparers. The IRS? The states? Both?
Really? At the income level that most congresspeople enjoy, they're using many of the loopholes and benefits that make the process as complicated as it is. Perhaps more to the point, their patrons - the entities that pour millions into their campaign treasuries - also like it that way.
No. What possible difference could it make to me?
e-file (it seems that 86% are e-filed)
up to the 2011 tax year.
There is a four digit code assigned to each software vendor. It is printed on some forms in varying locations. I'm sure it's coded by the IRS because that's how they track the sort of problems that affected Intuit and H&R Block returns this year.
The codes are assigned and maintained by the National Association of Computerized Tax Processors,
Ira Smilovitz
: > More to the point; how many members of Congress do their own? If they : > did their own, it would not be long before the process became much : > simpler.
: Really? At the income level that most congresspeople enjoy, they're : using many of the loopholes and benefits that make the process as : complicated as it is. Perhaps more to the point, their patrons - the : entities that pour millions into their campaign treasuries - also like : it that way.
: > If your member of Congress did their own, would that make it : > more likely for you to reelect them?
: No. What possible difference could it make to me? : -- : D.F. Manno : snipped-for-privacy@aim.com
If you don't have really fancy investments, just common stocks, bonds, mutual funds, etc, a mortgage, some local and State taxes this presents few problems as now the brokerage houses can download your tax information directly to programs like Turbotax, so you don't have to type in(with room for typs in my case) all the dividens, trades, etc and mostof the others are single entry items like home mortgage, local and State taxes. Charitble donatins and medical expenses may be a bit mor niggly, but do you donate to 100 charities? I do it even with a vision handicap(witness my typos). It doesn't take anywhere as long as it used to in the old days.
Wendy Baker
Because they are not aware of the requirement, or don't understand the importance of it.
No authorization is needed. Anyone can hang out a shingle and prepare tax returns for pay. The only requirement is that they have a preparer ID number (PTIN) from the IRS, sign the return, and put their PTIN on it. You can get a PTIN online in about 5 minutes.
The IRS tried to start requiring paid preparers to pass a competency test if they are not EAs, CPAs, or lawyers, but the effort is currently dormant because a court ruled that the IRS didn't have the authority to require it. The IRS is appealing the decision.
California has a certification requirement, but it applies only in that state. I'm not familiar with the details.
Bob Sandler
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