First of all, just to repeat: I am very much in favor of the IRS doing as much as it can on its end and then prompting for info it does not have but thinks should be relevant.
That said, neither daycare nor college tuition are itemized deductions. You can take the standard deduction and get credits/deductions for those at the same time.
Or the EITC: That one depends on who lived with you during the year, which the IRS also does not know. But it could ask that one question and then compute it for you...
Handling of stock transactions is the _easy_ case here, assuming the brokerages correctly track basis, because they already report all the relevant info to the IRS.
> I’m willing to wager that for the vast majority of U. S. residents for the vast majority of their lives, their deductions will not exceed the standard deduction.
That is a very sure bet, but not that relevant to whether the IRS can compute one's taxes because our tax code as currently structured has a bunch of credits and deductions that are not part of Schedule A that matter to quite a number of people.
And as I said, the vast majority of people who paid for child care would need to correct whatever number the IRS came up with for that.
Now I agree there are lots of people (healthy retirees, young college grads with no kids) who probably _could_ have their taxes done by the IRS entirely. And I'm all in favor of that happening, as long as we're clear that this is not going to reach everyone, and will generally benefit the people who are in the best position to navigate the current system already....
Which brings us back to reducing the underlying complexity, so the IRS could handle more cases itself.
That said, neither daycare nor college tuition are itemized deductions. You can take the standard deduction and get credits/deductions for those at the same time.
Or the EITC: That one depends on who lived with you during the year, which the IRS also does not know. But it could ask that one question and then compute it for you...
Handling of stock transactions is the _easy_ case here, assuming the brokerages correctly track basis, because they already report all the relevant info to the IRS.
> I’m willing to wager that for the vast majority of U. S. residents for the vast majority of their lives, their deductions will not exceed the standard deduction.
That is a very sure bet, but not that relevant to whether the IRS can compute one's taxes because our tax code as currently structured has a bunch of credits and deductions that are not part of Schedule A that matter to quite a number of people.
To put numbers to this, per https://www.eitc.irs.gov/eitc-central/statistics-for-tax-ret... in 2020 25 million tax returns had EITC. Per https://www.irs.gov/statistics/returns-filed-taxes-collected... in that same year there were about 150 million total "individual, estate, and trust" tax returns. So at least 1/6 of individual tax returns (more to the extent that trusts exist) could not have been correctly done with the information the IRS has.
And as I said, the vast majority of people who paid for child care would need to correct whatever number the IRS came up with for that.
Now I agree there are lots of people (healthy retirees, young college grads with no kids) who probably _could_ have their taxes done by the IRS entirely. And I'm all in favor of that happening, as long as we're clear that this is not going to reach everyone, and will generally benefit the people who are in the best position to navigate the current system already....
Which brings us back to reducing the underlying complexity, so the IRS could handle more cases itself.