The tax industry has created a huge market for themselves by filing other people's taxes for them. These are 3rd party companies handling someone's taxes rather than filing directly. It's become more and more common for people to say they're using TurboTax or other tax platforms than mailing in their taxes themselves. People focus on the convivence rather than the ultimate negative impact this is having towards Americans as a whole.

The first negative is that filing 3rd party can cost money. They may offer free filing if you make under a certain amount of money or have "simple" taxes. This is to get you in the door. Someone may be more likely to continue to use the service even after they are prompted that it will actually cost them money. As it would cost more time to find another option or to file yourself once you've already filled out your information. They will charge you to file a state tax form - something that is often incredibly easy to do. The reason state ones are easier is states are less likely to get lobbied by these corporate entities. Anecdotally, my state tax forum typically takes about 10 minutes. While my federal one will take 2-3 hours.

Secondarily, these tax companies lobby the government to make taxes more confusing and more difficult for the average person to understand. They want there to be no free option from the government to file your taxes. You currently can file using direct file online, free fillable forms, or filing by mail. The difference between these options may not be obvious. There is also free file which is an option through 3rd party companies. Free fillable forms, you fill out the same forms as you would mail. You do all the math yourself. Direct file is a currently in trial in 25 states. Free file is through 3rd parties and I will get more into it in point 3.

Third, these companies do EVERYTHING in their power to make your "free file" not actually free when you use them. They don't offer state taxes for free. They have worked with search engine optimization to prevent results including free options from showing up in search results. In 2022, the FTC sued Intuit (the parent company behind Turbo Tax) over them promoting free options only to switch it up on consumers by showing them only paid options. The FTC found that they were engaging in deceptive advertising and asked them to stop. However, many tax companies still maintain similar practices only slightly toned down.

Forth, tax software has had multiple cyber security breaches over the past decade. The most recent of which that hit the news waves in 2024 was of Inuit's Turbotax software in early 2024. Not even just breaches, but sharing users personal data with companies without consent. In 2023, it was released that the tax companies H&R Block, TaxAct, and TaxSlayer had all at various points between 2014 and 2023 shared taxpayers information directly with Google and Meta.

The current administration has talked about getting rid of the Direct File program and hinted towards getting rid of any way to file taxes directly to the government. This only serves into the hands of big business.

All of these reasons are why I have only ever done free fillable forms or mailing in my taxes directly. The IRS is going to have my information in their system regardless of how I submit it. I don't need to be giving scummy companies my money and I encourage all of you to not give your data or money to these companies either.