America’s insane tax-filing process
If you are anything like me, you have spent a lot of time over the past few weeks opening letters, finding receipts, requesting PDFs, scanning documents, and going through your credit-card statements line by line. It’s tax season. And in the United States, taxes are a DIY affair.
This is the case even though Washington could probably do your taxes for you. If you earn a salary or an hourly wage, the Internal Revenue Service already knows how much money you make. It likely knows how much you owe or how big your refund should be too. Nine in 10 households take the standard deduction, making their liability easy to glean from payroll and banking data.
Yet Uncle Sam demands that Americans fire up TurboTax, head to a storefront preparer, hire an accountant, or sit down with a sharp pencil and a strong cup of coffee to get their taxes done each spring. The average filer spends 13 hours on their 1040—a time tax that many of our wealthy peer countries have reduced to a couple of minutes, if that. Prepopulated documents and return-free systems are common everywhere but here. Sweden lets residents file by text. Canada prefills paperwork. Japan sends households a document summarizing their tax contributions. If everything looks copacetic, many workers get to do a blissful nothing. Denmark, Estonia, Spain, and Norway have similarly simple processes.