you've been given an explanation of why people pay to have their tax returns prepared
Yeah, but only after I created this thread, not before. However, I was given an explanation of why SOME, not all, people have to pay to have their tax returns prepared.
Neither I nor the video I posted suggested the US government should prepare tax returns. Only you suggested that.
As you know, this would require the government to know how much you paid in mortgage interest, property taxes, charitable contributions, unreimbursed employee expenses (if you're paid on a W2) etc... If you own rental property then the government would have to know not only interest and taxes, but fees for repairs, property management, insurance premiums, calculate depreciation, etc.. If you own receive income or have expenses from an estate or trust or ownership in an LLC then you have K-1's. Again, do you think these people would want to depend on a government employee to compile and report all of that correctly
Haven't even mentioned someone who files a Schedule C (you know, all those small business owners all over the country)
Is the government going to know all of their expenses? Do you really think small business owners are going to want the government to take that out of their hands (the business owner) and they will just trust the government to do that correctly?
However, yours may not be such a bad idea. Doesn't the IRS already receive these forms from the various financial institutions for each tax payer, where applicable?
1098 -- For most homeowners, mortgage interest is tax-deductible, and this document will tell you how much you paid last year. Your lender is required to send you one of these forms if you paid at least $600 interest. Actually, your mortgage company probably won't send you an official IRS form, but a document of its own design that contains the same data. In addition to the mortgage interest, other information often found on this statement includes amounts paid toward points to get the loan and escrow disbursements for real estate taxes (also deductible) and property insurance (not deductible).
1098-E -- Are you paying back a student loan? The interest on your educational debt is reported on this form; your lender must send you one if the interest tally is at least $600. You may be able to deduct your student loan interest and possibly other loan-related amounts, such as origination fees and capitalized interest. To figure the deductible portion of the interest amount found here, use the work sheet in your Form 1040 or Form 1040A instructions.
1099-INT -- If you earned more than $10 in interest on a bank account or a certificate of deposit, you'll get one of these forms for each account. Don't dismiss this statement if you reinvested the interest. Tax law says you received the income even if you didn't actually have it in your hand, and reinvested earnings are still taxable income. 1099-INT statements also are issued to people who cashed in savings bonds.
1099-DIV -- Earnings from individual stocks and mutual funds are reported on Form 1099-DIV. This will show dividends and capital gains distributed over $10. As with reinvested interest, if you used the dividends or distributions to buy additional shares of the stock or mutual fund, you still have to pay taxes. However, the distributions and certain, qualified dividends are taxed at the lower capital gains rates.
1099-B -- If you sold stocks, bonds or mutual funds, you will receive a 1099-B from your broker or mutual fund company. This will tell you the number of shares sold, when they sold and the amount you got for the sale. You'll need this information, along with the date you bought the shares and the amount you paid for them, to figure your taxes. Since 2011, brokers have been providing information on the basis (the cost of an asset plus some adjustments) of sold stock.
1099-G -- Taxpayers who got a refund of state or local taxes last year will get this form. If you used those taxes as a deduction on your previous year's federal income tax return, you'll need to report the 1099-G amount on this year's return. You don't have to worry about reporting this refund as income, however, if you took the standard federal deduction instead of itemizing.
1099-K -- If you received payments via credit or debit cards or from third-party payment processors, such as PayPal, Amazon and eBay, you might receive a 1099-K reporting those amounts. There are triggers for amounts ($20,000) and number of transactions (200), so not every person who receives such payments will get a 1099-K. This income, however, is taxable and should be reported even without issuance of a 1099-K. The new statement is an attempt to get more information on such payments to the IRS.
1099-R -- If you received a pension or a distribution from an individual retirement account or retirement plan, the 1099-R provides the details of these transactions. The form is issued by your broker, pension plan manager or mutual fund company. You'll also get a 1099-R if you rolled over money in a retirement plan, usually a 401(k) to an IRA, or if you converted a traditional IRA to a Roth IRA. A rollover usually is not a taxable event, but a pension payout may be.
1099-MISC -- Self-employed individuals who earned $600 or more should get a 1099-MISC from each company with which they did business. You should get a separate 1099-MISC for each independent job you had during the previous tax year.http://www.bankrate.com/finance/taxes/your-tax-documents-are-in-the-mail-1.aspxSure, changes will have to be made to the system to cover all the gaps. But again, yours maybe not be such a bad idea.
