Philip, a long-time AFM reader, sent me this email:
I was wondering what your opinion is on whether you think that the availability of simplified tax software has left many people knowing even less about their taxes than they used to? I know recently Nickel had a post about taxes and lots of people seemed to think that if they were getting a tax return then they did not pay any taxes! Lots of people don’t understand that a raise will not put them into a larger bracket and they will take home less moneythe graduated tax system confuses them.
I guess I just think if these people had to fill out some forms and not just copy numbers they would understand more of what is happening with their money and how much they are paying in taxes.
I used tax software to calculate my return but I checked the numbers and read the tax return that was prepared by the software to make sure the numbers did what I expected.
First off, I LOVE my tax software!
Second, I don’t think it matters. People who don’t understand taxes wouldn’t understand them any better if they didn’t have software. They would probably just go to a tax professional.
It’s a shame that people don’t pay more attention to their finances but they don’t. It’s just a fact of life.
I would like to see a tutorial included in the software package that would explain the tax system to its users. Even then, I’m not sure it would do any good. Most people just want to be done with it.
What are your thoughts?