Tax day

Today is April 15th, which is tax day here in the US. I’m not going to start a discussion over what is a fair amount of tax, we all need to pay our share for the services we use everyday. However, income tax compliance is extremely costly and time-consuming.  First, I am not a tax professional. I do spend a bit of time working with corporate taxes in my profession and generally consider myself somewhat intelligent with some financial and accounting matters.

That said, I belive our system needs a serious compliance overhaul. I just wrapped up and filled my taxes earlier today. I have a fairly simple tax return. It’s probably more complicated than the average americans but no where near a “complex” return. In fact, my returns have gotten easier since I no longer work for myself. however, this year, even with the aid of tax filling software, I still spent hundreds of dollars on tax prep and in aggregate approximately 12 hours of my time preparing my return. It’s absolutely ridiculous for my fairly simple situation. To make matters worse, the rules for things like capital gains and losses are so complex I’m not even sure if everything is correct (I hope it is).

There are very few things I hear in everyday conversation that gets so many Americans as worked up as the complexities of our tax compliance system. It’s time our country simplified the income tax compliance burden. Income tax prep is such a burden Mark Perry estimated the cost of income tax compliance to equal the “state of Utah’s entire annual output“.

Posted in Randomness, Tumblelog on April 15th, 2010 Taged with Accounting, Income tax, Tax

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