While the gov’t sues TurboTax over “deceptive” free-filing ads, the US tax system is still a headache
![TurboTax before the modern tax season [James Keyser/Getty Images]](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/5V97xsSxqM8ZuRKsT690WI_2_GettyImages-50601728.jpg)
W-2 anxiety is real… Tax season is here, and TurboTax is Intuit. Intuit is the financial software powerhouse behind TurboTax, Credit Karma, and QuickBooks. Its specialty: making finances less #anxiety-inducing, with hand-holding walk-throughs and user-friendly screens. Now, Intuit has some anxiety of its own — and it’s not the April 18 filing deadline.
- The FTC sued Intuit yesterday over what it’s calling TurboTax's "deceptive" marketing, with the aim of blocking TurboTax from advertising its services as “free.”
- The consumer protection agency said that two-thirds of US taxpayers couldn’t qualify for TurboTax’s free offering last tax year — and many don't find out they need to pay until later in the process, after they’ve already entered info.
- Intuit says “simple returns” can be filed free, and that last year 17M people filed for free on TurboTax.
Upgrade to claim your tax break... While most countries provide easy online services where taxpayers can file free of charge, free options in the US are more complicated: fill out a paper form, manually enter everything into a digital form, or file through private tax software (but only if you earn $73K or less). Intuit said it’s been focused on boosting free filers. Still:
Complexity is a biz opportunity… because consumers will pay extra to have headache-inducing (but critical) processes simplified. The US’s convoluted tax system is bad for taxpayers, but great for companies like Intuit and H&R Block — if taxes were a cakewalk, fewer people would likely need their services. (It’s a similar convo for the hard-to-navigate healthcare industry: companies like Teladoc, GoodRx, and Zocdoc thrive on simplifying experiences.) This week, President Biden released a budget proposal that includes $14B for the IRS, but TBD if any of that will go toward creating a simpler filing system.