It could soon be easy to file your taxes.
The US is moving closer to modernizing how Americans file their taxes in order to break the hold private tax prep companies have over the process. In the future, tax-filing could be done in a few clicks, like in some European countries.
The Inflation Reduction Act set aside 15 million dollars for the Treasury Department to study a free tax-filing website.
The Treasury Secretary supports simpler processes. She said that it takes an average American 13 hours to file a tax return. It's similar to Sweden. If you reply to a text message, you can file. We need to do better.
It isn't a new idea. According to the Treasury's counselor for tax policy and implementation, an adequately funded IRS would allow Americans to file their taxes at no cost and within minutes.
A working paper for the National Bureau of Economic Research was written by researchers from the Treasury Department and Minneapolis Federal Reserve Bank. Almost half of the people who pay to have someone do their taxes are currently paying to have someone handle them.
The IRS still faces many logistical challenges to its existing roles, with both budgets and staffing shrinking over the last two decades, even as the agency assumed new pandemic-era responsibilities. The IRS is still trying to clear out and pay out refunds to waiting filers as workers deal with decades-old technology and workplace stuffed to the brim with paper
Some of the pain will be alleviated by the Inflation Reduction Act. Customer services and free filing initiatives will still get some of the money, but it will go towards tax enforcement on America's ultra-wealthy and large corporations.
A senior fellow at the Tax Policy Center told Insider that there is an opportunity for the IRS and taxpayers to have a tax system that they can count on.
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