How many individuals do their own tax returns?


T

TS

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.
 
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P

Pico Rico

TS said:
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.
 
W

W. Baker

: : > 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.

No you are not. I make it 2!

Wendy
 
B

Brian Gordon

based on my informal survey, I think I am the only one.

--
Well, I'm one too, and the TurboTax people seem to be making a living ...
 
S

Salmon Egg

W. Baker said:
: : > 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.

No you are not. I make it 2!
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?

--

Sam

Conservatives are against Darwinism but for natural selection.
Liberals are for Darwinism but totally against any selection.
 
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M

Mark Bole

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?
 
B

Barry Margolin

Salmon Egg said:
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?
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?
 
B

Barry Margolin

Mark Bole <[email protected]> said:
You are making an implicit assumption that everyone wants their tax
return to be more simple. I think some folks relish the complexity.
Right. Imagine a poll with the following questions:

1. Would you like Congress to simplify the tax code?

2. Would you like Congress to abolish the tax deduction for home
mortgage interest?

3. Would you like Congress to abolish the tax deduction for charitable
contributions?

4. Would you like Congress to abolish the tax deduction for state income
taxes and local property taxes?

5. Would you like Congress to abolish the tax deduction for medical
expenses?

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.
 
P

Pico Rico

Mark Bole said:

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.
 
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T

TheMightyAtlas

That doesn't answer his question, because it only gives you the breakdwon of e-file (it seems that 86% are e-filed)

This one gives you statistics on the whole set of tax returns, but is only up to the 2011 tax year.

http://www.irs.gov/pub/irs-pdf/p4822.pdf

By my calculation paid preparer 57.2%, self prepared 42.8% for tax year 2011. 85% e-filed.

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.
 
M

Mark Bole

That doesn't answer his question, because it only gives you the breakdwon of e-file (it seems that 86% are e-filed)

This one gives you statistics on the whole set of tax returns, but is only up to the 2011 tax year.

http://www.irs.gov/pub/irs-pdf/p4822.pdf
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.
 
T

TheMightyAtlas

7.5 million returns were not processed?
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.
 
R

removeps-groups

So we still have 1.1M paid preparer prepared returns done with pen and paper!
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.
 
T

TheMightyAtlas

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?

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.
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.
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?
 
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D

D.F. Manno

Salmon Egg said:
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?
 
I

ira smilovitz

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?
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, www.nactp.org.

Ira Smilovitz
 
W

W. Baker

: In article <[email protected]>,

: > 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
: (e-mail address removed)

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
 
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B

Bob Sandler

There is also an unknown number of paid preparers who don't fill out the
Not just unknown, but probably unknowable. Surely this must be a very
small number? Why would the customer not insist on it?
Because they are not aware of the requirement, or don't
understand the importance of 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?
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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