Growing Burden of Paying our Federal Income Taxes
Amy K. Frantz
It’s that time of year again, when our federal income taxes are
due. While the extension of the Bush Tax cuts passed last December
prevented the income tax rates from going up, unfortunately, the
total time and monetary cost to file your federal income taxes is
larger than it was last year, and it is likely this burden will
continue to grow each year.
This year those who are procrastinators get an extra couple of days
to file your taxes – the due date of your federal income tax return
has been moved to Monday, April 18, 2011 because of the District of
Columbia’s Emancipation Day holiday (this due date applies to all,
even those not living in the District of Columbia).
These extra few days may help, as the average amount of time needed
to complete and file a 1040, 1040A, or 1040EZ form, as estimated by
the Internal Revenue Service (IRS), has increased from 17.3 hours
last year to 18 hours this year.
The average time burden includes time spent on record keeping, tax
planning, form completion, and form submission.
The monetary cost of preparing and filing your federal income tax
form has also risen since last year. Nina E. Olson, the National
Taxpayer Advocate, indicated that taxpayers “find return preparation
so overwhelming that about 60 percent now pay preparers to do it for
them. An additional 29 percent use tax software, with leading
software packages costing $50 or more.”
As a result of the growing complexity of filling out the tax forms,
the IRS estimates that the average cost of completing and filing one
of the 1040 tax forms rose from $225 last year to $240 this year.
Broken down more specifically by the type of 1040 form, the IRS
estimates that for the 2010 tax year “the average burden for
taxpayers filing Form 1040 is about 23 hours and $300; for taxpayers
filing Form 1040A, it is about 9 hours and $130; and for taxpayers
filing Form 1040EZ, it is about 7 hours and $60.”
If even the EZ (“easy”) form to file your federal income taxes takes
an average of seven hours to complete, that is a sure sign that your
tax system is too complex. According to Taxpayer Advocate Nina
Olson, “the tax code nearly tripled in size during the past decade —
to 3.8 million words in February 2010 from 1.4 million in 2001.”
“The basic tax instruction booklet alone now covers 179 pages,
compared to only 117 pages in 2000, according to Pete Sepp,
executive vice president of the National Taxpayers Union in
Elected officials often talk about the need to make the federal
income tax system easier for taxpayers to understand and less
complex to file. President Obama, in this year’s State of the Union
Address, said “In
fact, the best thing we could do on taxes for all Americans is to
simplify the individual tax code. This will be a tough job, but
members of both parties have expressed an interest in doing this,
and I am prepared to join them.”
However, rarely do elected officials follow through and actually
simplify the tax code. As those bearing the ever-growing burden, in
both time and money, of the federal income tax code, America’s
taxpayers need to hold our elected officials accountable to the
promises they make to simplify our nation’s income tax system.
Amy K. Frantz is Research Vice-President at Public Interest
The views expressed herein are those of the author and not
necessarily those of Public Interest Institute or Tax Education
Foundation. They are brought to you in the interest of a
Phil Britt, “Taxpayers Spend Nearly $260 Billion Just to
File Taxes,” Budget & Tax News, Heartland Institute,
April 2011, p. 14.
Instructions for IRS form 1040 for 2010, p. 95; and
Instructions for IRS form 1040 for 2009, p. 98.
Instructions for IRS form 1040 for 2010, p. 95.