![]() And then there are people with student loans, who also have to use Deluxe. They are now prompted to upgrade to the Deluxe edition after entering information from basic documents, such as the one that shows tuition costs. One large affected group was current and former students. A third is used by taxpayers who collected unemployment benefits. Another is used by low- to middle-income households that receive a credit for putting money in a retirement account. One of these forms was for a tax credit that goes exclusively to poor taxpayers who are elderly or get disability benefits. ![]() By accepting the Deluxe version, student Kristan Obeng ended up saving $26 on her taxes - at a cost of $151. A screenshot showing how TurboTax users are directed to the deluxe, paid version. Thirty TurboTax customers told ProPublica that they were charged as a result of needing to use one of the forms that used to be free. But the income levels of the groups that were being driven to paid products “was never really considered.” “They were always supposed to be customer focused, customer first,” one former staffer said. In response, the company bumped a number of forms typically used by lower-income filers, which were previously available in the Free Edition, into paying editions. ![]() Most of the millions of Americans who would no longer be itemizing their deductions are relatively affluent - making more than $75,000 a year - but they would now potentially be eligible to use the Free Edition. Some pay for ancillary services.īecause the new law almost doubled the standard deduction, Intuit faced a loss of users of its Deluxe edition. Some pay because they have to file extra forms. The goal, according to former employees, is to draw in people with the promise of “free” and then get them to pay. The company’s commercial ecosystem includes four price tiers: Free Edition, Deluxe, Premier and Self-Employed. For an outsider, Intuit’s lineup of products is dizzying. In return, the IRS has agreed not to offer its own free service.īut, as ProPublica has been reporting, Intuit has steered eligible customers away from the truly free version, aggressively marketing products that are called “free” even though many customers end up paying. Under a 2002 deal with the government, most Americans are supposed to be able to file their taxes for free as long as they make under $66,000 a year. The spokesman declined to break down numbers or comment on specific cases. We believe that it enables consumers to take more control over their financial life.”Īn Intuit spokesman declined to answer detailed questions about the changes, but said in a statement, “More taxpayers filed their taxes last year with TurboTax and paid absolutely nothing than any other year.” He also said the “completely free customer group” grew at a faster rate than TurboTax as a whole. He told investors: “We are big supporters of tax simplification. “We needed to change our lineup this year to ensure that we delivered for customers, given the tax code changes,” Goodarzi said. He presented the move as good for taxpayers. Intuit CEO Sasan Goodarzi obliquely alluded to the strategy on a call with Wall Street analysts, saying the “tuned product lineup, adjusted for the new tax legislation” helped the company bring in more money. The shift was described to ProPublica by two people familiar with the process. Which ones? Individuals with disabilities, the unemployed and people who owe money on student loans, all of whom use tax forms that TurboTax previously included for free. Intuit executives came up with a way to preserve the company’s hefty profit margins: It began charging more low-income people. Under the new law, many wealthier taxpayers would no longer be filing that form, qualifying them to use the company’s free software. It had been regularly charging $100 or more for returns that included itemized deductions for mortgage interest and charitable donations. The 2017 tax overhaul vastly expanded the number of people who could file simplified tax returns, a boon to millions of Americans.īut the new law directly threatened the lucrative business of Intuit, the maker of TurboTax.Īlthough the company draws in customers with the promise of a “free” product, its fortunes depend on getting as many customers as possible to pay. Sign up for ProPublica’s Big Story newsletter to receive stories like this one in your inbox as soon as they are published. ProPublica is a nonprofit newsroom that investigates abuses of power.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |