> how much of the year your wife are kids are living with you?

They can make a likely guess (the full year), and you tell them if they're wrong.

> whether you took college courses?

Yes, your college files Form 1098-T to tell the IRS this.

> how much you put into your IRA?

Yes, your IRA custodian (your bank) files Form 5498 to tell the IRS this.

> which purchases count as medical expenses?

Very few people spend enough on medical expenses to take a deduction for them. They have to exceed 7.5% of your AGI.

> the cost basis of the stock you sold?

Yes, your brokerage files Form 1099-B to tell the IRS this. There are only a few rare cases where they won't be able to report a cost basis.

Agree with all of them except the kids. That was the big reason I said "huge percentage" instead of something like "overwhelming majority", because I have a sneaking suspicion the IRS doesn't know anything about your kids at all. So I'm guessing child tax credit isn't automatically calculable right now.

Let's assume you're right that they don't have a simple table that shows parentage of every SSN, sounds plausible that they wouldn't at least to start, but on the other hand, (for people who don't add or remove spouses or kids from their household) it's arguably VERY common for kids to persist with the same parent(s) from one year to the next.

I don't think anyone is saying "All taxes should be automatically calculated to the final numbers" -- just that for instance, when I filed last year with a spouse and 2 kids, a default calculation could be done this year that assumes an unchanged household.

And anyway, just as TurboTax does, the IRS could maintain a simple fact database for you for you to sign in and indicate what SSNs are part of your household, with the bonus that it would detect a duplicate claim for the same kid up front and show you that someone else (e.g. your ex) is claiming them and that you should get them to remove them to avoid both your returns being incorrect. The complexity for a taxpayer of signing in to IRS to manage household members, address, etc. with IRS is an order of magnitude less than that of tax prep they have to do today.

I agree, definitely. Just in this specific subthread here I'm addressing the question "does the IRS know...?"

Why not use all those forms and prefill my tax form for me ?

If I disagree, I can add/remove/update it. If I agree, I just file

Asking me to collect those documents and reports the different numbers into a form, is not efficient, error prone and time/money consuming.

> Asking me to collect those documents and reports the different numbers into a form, is not efficient, error prone and time/money consuming

Exactly. That’s why they want you to do it and not them.

The IRS does it anyways to validate your return ...

It's marginally more work for them to tell you the results of their math. And compared to how many people file taxes it's a net benefit for society. Collectively paying a small group of people to do something for the benefit of many is like the whole point of government.

I don’t know that they do. I think they do sampling of higher value accounts and get out the full details for an audit.

I don’t know that for sure that.

Even in this case the IRS could pre-fill everything it knows and let you spend 5 minutes adding any details they missed. For the majority of people it would be "open up mytaxreturn.irs.gov, verify that everything looks correct, hit yes and be done".

The IRS knows enough before tax time to auto-file about 90% of American's returns. Because 90% of people only have a W2, maybe a mortgage (which they know), and take the standard deduction.

The could send 100% of people a bill that you either pay or file tax forms to replace.

Those things matter for less than half the population.

If you don’t care about deductions you can fill out a 2 page 1040 with your W2. As they calculated for you.

but people do care and so they are willing to pay $60 for tax help

About 80% of filers take the standard deduction.

You’re referring to itemizing deductions. But you still qualify for income deductions like IRA and credits like child without itemizing.

With the way these conversations often go back and forth, I sometimes wonder how many people have actually done their own taxes by hand with the official forms, vs have only ever used some program or service.

I think the way people think about tax is it’s a chore to be done. And offloading it to someone else is good capitalist specialization.

But I think when you understand tax policy you think and act differently in regards to financial decision. So outsourcing it reduces insight into think that perhaps most impacts middle class finances besides job.

I have done so. I had no kids and no IRA.

Not their problem, it’s your responsibility to record deductions.

And, if they don't, do you want them to know?