Tax Code Complexity Costs Americans $544.6 Billion per Year

Americans are wasting an estimated $544.6 billion per year, equivalent to 1.7% of U.S. GDP, due to the complexity of the federal tax code.

The Tax Foundation, a nonpartisan nonprofit organization, analyzed the data and found that the cost includes $387.5 billion in lost productivity and $157.1 billion in out-of-pocket expenses such as tax software and professional preparation.

Individual taxpayers spend an average of 12 hours completing Form 1040, the standard federal individual income tax return, which is valued at $47.55 an hour by the Tax Foundation.

The burden is even higher for taxpayers with more complicated returns, and trading cryptocurrencies like Bitcoin and Ether adds to the reporting burden, making tax reporting even more complicated.