Fiscal Cliff

Multiple Possible Fiscal Cliff Outcomes Created Big Headache for TurboTax

It's been fun for all of us

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If you thought Capitol Hill reporters had it bad—having to follow every last tax shift, rate hike, and exemption phase-out as Congress slogged toward the fiscal cliff—consider what it was like for the employees at TurboTax.

The company's software must be updated to incorporate changes to the tax code every year. But in 2012, with the expiration of the Bush tax cuts looming, the degree of potential change was unprecedented. In an ideal world, the government would have calmly negotiated a bill well in advance of Jan. 1, giving the tax-preparation industry adequate time to respond. Fortunately for filers, the analysts and coders at TurboTax are not under the slightest impression that the Congress we have is ideal. Rather than waiting for the final legislation to arrive and then getting to work, they opted to write the 2013 version of their software in parallel to the negotiations Washington has been having for months, creating chunks of code for multiple outcomes on any given provision. Most of it would end up junked, but it beat having to scramble at the 11th hour—or beyond, as the case turned out to be.