Every year leading up to Tax Day, Americans face a familiar and frustrating ritual: sorting through receipts, deciphering forms, clicking through software prompts, and hoping they haven’t made a costly mistake. This annual headache of helping Uncle Sam rifle through your pockets is a personal nuisance and a national time sink that prevents people from doing more valuable and productive things with their time. For the 2024 tax year, taxpayers spent a staggering amount of time complying with the tax code.
The economic cost of this hidden tax on time, based on private-sector labor costs, amounts to $316 billion. The IRS also estimates taxpayers incur at least $148 billion in out-of-pocket expenses like software, professional help, and printing. These costs amount to at least $464 billion—nearly as much as the federal government spends annually on education and transportation combined.
And even that may understate the true burden, as the IRS has yet to complete cost estimates for many of its most complex and widely used forms. Tax complexity is a policy choice, and addressing it can be as well. For example, the Tax Cuts and Jobs Act of 2017 (TCJA) bucked the trend of increasing tax complexity.
It reduced taxes for the vast majority of Americans and simplified the filing process, saving hundreds of millions of hours once spent laboring over tax forms. One major reform was the near-doubling of the standard deduction, which dramatically reduced the number of taxpayers who need to itemize their deductions. As of 2024, over 90% of filers now take the standard deduction, meaning about 30 million Americans no longer have to slog through additional forms and calculations.
In addition, the TCJA practically eliminated the Alternative Minimum Tax (AMT) for most households. By the time of the 2017 tax reform, the AMT had evolved into a confusing parallel system that required millions of filers to calculate their taxes twice. The TCJA spared millions of middle-class families from this duplicative and time-consuming exercise by raising the AMT exemption and adjusting it for inflation.
Unfortunately, key provisions of the TCJA are set to expire after 2025.
Time-saving tax reforms urgent
If Congress doesn’t act, millions of filers could face longer forms, higher compliance costs, and more uncertainty in the next tax season.
That would be a significant step backward when taxpayers are already contending with the lingering effects of inflation, confusing new reporting requirements, and subpar IRS service. If lawmakers are serious about helping families and small businesses, they should focus on reforms that simplify tax filing and make it faster and cheaper. That starts with permanently expanding the standard deduction to maintain the time savings millions of filers now enjoy.
Congress should also restore full expensing for business investments. This key pro-growth TCJA provision simplified tax planning and boosted productivity by allowing immediate deductions for equipment and machinery purchases. In addition, policymakers must prioritize IRS taxpayer service upgrades so filers can get help when needed. Finally, modernizing the Service’s outdated technology systems, which still rely on 1960s-era computer programming, would greatly reduce delays and confusion.
As Congress debates future reforms, lawmakers should call on IRS analysts to testify alongside budget experts from the Joint Committee on Taxation and the Congressional Budget Office. These analysts can provide valuable insight into how specific proposals may increase complexity, impose hidden costs, or reduce burdens for everyday taxpayers. Tax Day should become less of a burden.
Americans deserve a tax code that values their time as much as their money. Ideally, taxpayers should be able to figure out their taxes in an afternoon. Currently, the average filer takes 13 hours to complete a 1040 form.
This year, Congress has a rare opportunity to lock in reforms that simplify tax filing, lower compliance costs, and make the IRS work better for everyone. It’s time to stop accepting that the tax compliance burden must be heavy. Filing your taxes will never be fun, but it could at least be done sooner with the right reforms.