Tax Day is Tuesday and a new study from National Taxpayers Union Foundation (NTUF) revealed the staggering amount of time and money Americans are spending because of U.S. tax complexity.
This tax season, individual taxpayers spent an average of 13 hours and $290 filing their 2024 taxes, while business filers bore nearly three times that burden. All told, Americans will spend 7.1 billion hours, worth $464 billion in expenses and lost productivity complying with the tax code for tax year 2024.
Demian Brady, Vice President of Research at National Taxpayers Union Foundation and author of the report, said the burden on taxpayers is far too heavy.
“This is unacceptable. No American should have to spend more than two or three hours doing their taxes,” Brady said. “The time and money we lose to complying with laws and regulations could be better spent with our families, building businesses, or enjoying life, not buried in paperwork or software.”
The hours burden remains below the 8 billion hours annually spent prior to the Tax Cuts and Jobs Act of 2017, putting pressure on Congress to act on tax reform before provisions of that law expire at the end of the year, adding more complexity and higher tax burdens.
“When the 2017 TCJA doubled the standard deduction, it helped millions avoid itemizing, saving time and complexity,” Brady said. “If Congress lets that expire, taxpayers will face longer forms, more confusion, and higher costs. We cannot allow our tax code to regress like that.”
The study also highlights the urgent need to modernize the IRS’s outdated systems and improve taxpayer service.
The bureau still relies on its Individual Master File, a system built in the early 1960s. Delays in tech upgrades have created a confusing, disjointed service with long processing times. Smarter tech and communication tools could help close the tax gap and rebuild trust for taxpayers.
Further steps to provide leadership on behalf of a better taxpayer experience include U.S. Senate confirmations of a permanent rather than acting IRS Commissioner and Treasury Inspector General for Tax Administration.
Read the study.