If you feel like “America’s Insane Tax-Filing Process” is a drain on both your time and your wallet, you’re not alone. Even the government recognizes the effort that tax compliance places on Americans, publishing an estimated total annual cost burden for U.S. individual income tax returns.
It turns out that preparing and submitting individual income tax returns costs taxpayers more than $91 billion a year — nearly half of which represents the opportunity cost of all those lost hours spent tracking down receipts, reviewing instructions, and filling out and submitting the return.
According to the IRS, it takes taxpayers an average of 12 hours to prepare and file their return. Most also pay an average of $290 for related costs (e.g., tax software, third-party preparers, printing, mailing).
Collectively, Americans spend 1.95 billion hours and $49.76 billion to file their returns. The IRS estimates that the total monetized time and out-of-pocket costs for taxpayers filing a Form 1040 for the 2025 tax year is $91.79 billion.
Note that this figure doesn’t include actual tax liabilities, “economic inefficiencies caused by sub-optimal choices related to tax deductions or credits,” or the “psychological costs” of doing your taxes.
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