The ‘Other’ Cost of Taxes

dollarChances 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.

Sources:

http://taxfoundation.org/article/compliance-costs-irs-regulations

http://www.forbes.com/sites/kellyphillipserb/2016/06/20/report-americans-spend-more-than-8-9-billion-hours-each-year-on-tax-compliance/#7a37f2045022

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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