Americans Are Losing Billions to Save Time Doing Taxes: Are You Leaving Money on the Table?

Hopefully you all survived that dreaded day in mid-April when taxes are due. Tax Day is a day most Americans dread. Filing US taxes is a pain, made even more painful if you itemize deductions—the process of compiling the spending exempt from taxes, like mortgage interest payments and charitable contributions, can be arduous and annoying. <br />Keeping...
Hopefully you all survived that dreaded day in mid-April when taxes are due. Tax Day is a day most Americans dread. Filing US taxes is a pain, made even more painful if you itemize deductions—the process of compiling the spending exempt from taxes, like mortgage interest payments and charitable contributions, can be arduous and annoying.

Keeping track of these deductions is such an annoyance that, according to a recent study published by the National Bureau of Economic Research, many taxpayers forgo thousands of dollars to avoid doing it. The study tracks who chooses to itemize their deductions, and who doesn’t, to cleverly reveal why taxpayers are willing to leave so much money on the table when it comes time to file.

Last year, only about 30% of US taxpayers itemized deductions. The other 70% chose to take the standard deduction offered by the government of $6,350—a practice introduced so that middle-class taxpayers wouldn’t have to go through trouble of itemizing. Most of the people who took the standard deduction did so because, even if they added up all their deductions, they would amount to less than $6,350. But there are others who take the standard deduction but would gain from itemizing.

Research shows the typical household is willing to give up somewhere between $200 to $600 in order to avoid itemizing their deductions. Using those estimates, he calculates that the total cost of doing taxes in recent years was about 1.2% of US GDP, or more than $200 billion.

Despite having considerable wins, like the HEAT ACT included in tax reform, the complications, pain, and considerable cost of filing taxes is something ACCA is working with Congress and the Trump Administration to address.
Source: www.acca.org