It’s almost enough to inspire a US expat to vote against capitalism (as Senator Elizabeth Warren would describe a vote for her more popular rival, the socialist Bernie Sanders).
So I’m tooling along preparing my TurboTax return and I’ve got the flickering US tax-owed figure, up in the top-left corner of the page, down to something imaginable. From the first page I have informed my online tax experts that I’m a resident of an Asian country with self-employed business income.
Thus, after I’ve put in approximately two full work days inputting income and business expenses, the site gives me the good news that much of my income is exempt from US tax.
However, as that’s coming to pass, the US tax-owed figure up at the top of the page suddenly doubles to a seriously disheartening figure.
How could that be. I’m preparing to show that overseas income is the bulk of what I have to report. So why do the bots at TurboTax assume that means I’ll pay more, not less, in US taxes?
Of course I’ll pay Japan tax and get credit for it in the US, right?
Wrong, if you let these bots be your guide.
So let’s go back a few pages and make sure we have input all this correctly.
Nope. That didn’t help. Turbotax keeps telling me my expat status is going to double the US tax due. And here comes something that explains, when I think about it, why this is happening, and why in this sequence: A page urges me to switch from the all-automatic to a human-assisted program, for a considerable increase in price.
So I google “TurboTax bait & switch” and find that I’m far from alone.
And to tell the truth I probably should have known. I do read ProPublica, the investigative reporting site, which nailed TurboTax for a scam that belongs in the Scam Museum.
TurboTax’s parent company Intuit, backed by other commercial tax preparation companies, lobbied Congress NOT to let the Internal Revenue Service start its own free, public, online tax preparation site.
The lobbying paid off after the commercial outfits offered to provide free basic tax-prep services.
Then TurboTax and the others did create the free services – but promptly hid them where only a Russian hacker could find them. “Intuit added code to the Free File landing page of TurboTax that hid it from search engines like Google,” ProPublica reported.
Frustrated seekers of the freebie service were directed to a paid service with “free” part of its name, ProPublica reported. “The company came to a key insight: Americans’ anxiety around tax filing is so powerful that it usually trumps any frustration with the TurboTax product, according to three former Intuit staffers. So even if customers click on ‘free’ and are ultimately asked to pay, they will usually do it rather than start the entire process anew. Intuit capitalized on this tendency by making sure the paywall popped up only when the taxpayer was deep into the filing process.”
Why didn’t I get the message earlier, when I read the original ProPublica story, and abandon the bloodsuckers? Because I harbored the admittedly elitist conceit that my own tax situation was at least moderately more challenging than those of most of the freebie-users – or, rather, would-be freebie-users.
It was OK, I thought, for TurboTax to ask me for 80 bucks for a slightly more sophisticated automatic service.
According to the latest ProPublica story, TurboTax has been laughing all the way to the bank.
But now I’m done with TurboTax. I’ll get the paper forms from the IRS and start over, doing my own taxes again as I used to do before the internet. It’s not all that difficult, as I recall.