Chances are, you know how much you pay in taxes. But how much are taxes costing you in time and preparation fees?
According to a Tax Foundation report, using statistics from the Office of Information and Regulatory Affairs and the Bureau of Labor Statistics, tax compliance will cost the U.S. economy $409 billion this year. In all, Americans will spend 8.9 billion hours—more than 222 million work weeks—complying with IRS tax filing requirements for 2016.
The biggest part of the problem? Tax reform, which has taken the U.S. Tax Code from 409,000 words in 1955 to 2.4 million words today—plus an estimated 7.7 million words worth of tax regulations. The tax code is estimated to grow at about 89 words per day.
Sometime after the upcoming Presidential elections, you’ll see a tax simplification movement in Congress, pushed by both sides of the aisle. A cynic would say that this will be a way to shake special interests for more campaign contributions if they want to protect their exemptions, and the cynic might not that past tax simplification movements have added more pages than they’ve subtracted. Pay attention to whether the reform proposals would actually reduce the complexity to the point where you, yourself, would have no trouble filling out your tax returns, and if you see any goal other than that one, consider writing a stern note to your Congressional representatives.
This article was written for information purposes only and its content should not be construed by any consumer and/or prospective client as rebel Financial’s solicitation to affect, or attempt to affect transactions in securities, or the rendering of personalized investment advice for compensation. No client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from rebel Financial, or from any other investment professional. See our disclosures page for more information.
Phil Ratcliff, President of rebel Financial, is a senior financial advisor that holds an AIF®, CFP®, ChFC®, and CLU® certifications. He started his career at American Express Financial Advisors in 2003, then moved to AXA Advisors for 7 years before founding rebel Financial LLC in 2013.