It’s tax time again, so many households as well as tax accountants will be spending hours compiling tax information and filing the necessary forms. Since time is money, as the old saying goes, do we have any estimates of the cost to individuals of calculating their taxes and meeting the federal deadlines?
- has long been a question, and many estimates done
- we have some new estimates published in research by the NBER
- the new research is somewhat unique in method used – had data on filers who took the standard deduction even though they would have been better itemizing their deductions – used difference to imply how much they valued NOT spending time doing taxes
- most recent estimate is $200 billion economy-wide, and has gone up
- new tax law increases the standard deduction and changes some deductions, so will be interesting to see what new calculations are