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Criticisms and Difficulty of Tax Preparation

Criticisms and Difficulty of Tax Preparation

Criticisms and Difficulty of Tax Preparation

As April 15 approaches every year, millions of taxpayers in the United States prepare to file their tax returns. Tax preparation, however, is a difficult and time-consuming process that can be plagued with challenges and criticisms. The complexity and ever-changing nature of tax laws coupled with the need for accuracy in calculations make the process even more onerous.

In this article, we will discuss some of the criticisms and difficulties associated with tax preparation. We will also highlight updates from the government regarding tax preparation and provide insights into how the process can be made more comfortable.

Criticisms of Tax Preparation

The complexity of the tax code is perhaps the most significant criticism of tax preparation. The tax code is a convoluted jumble of laws, regulations, and interpretations that can make even the most experienced tax preparer’s head spin. For taxpayers, it means that they must deal with complex forms, calculations, and interpretations, which can be overwhelming.

Additionally, the tax code is continually changing, which means that taxpayers must keep up with the latest updates to remain in compliance with the law. The changes in tax laws also make it difficult for taxpayers to plan long-term investments or financial decisions, as the tax consequences of such actions are constantly changing.

Another criticism of tax preparation is the increasing burden on taxpayers in terms of time and money. Taxpayers must spend a significant amount of time gathering and organizing documents, completing forms, and calculating taxes. They may also need to hire professional tax preparers, which can be expensive, particularly for those with complex tax situations. The cost of tax preparation services has risen sharply in recent years, putting additional financial pressure on taxpayers, particularly those in lower-income brackets.

The use of tax preparation software has helped to alleviate some of the burdens of tax preparation, but it has also led to other criticisms. Critics argue that the software has made taxpayers too dependent on technology, leading to a lack of understanding of tax laws, regulations, and calculations. Additionally, software errors or vulnerabilities could put taxpayers’ sensitive personal and financial information at risk, which is a growing concern in today’s digital world.

Difficulty of Tax Preparation

The difficulty of tax preparation is perhaps the greatest challenge facing taxpayers. The need for accuracy in tax calculations and reporting means that errors can have serious consequences, including audits, penalties, and even legal action.

The complexity of the tax code and the sheer number of tax forms and schedules make the process even more challenging. For example, the IRS estimates that it takes an average of 13 hours to complete and file a Form 1040, which is the basic tax return form for individuals. If a taxpayer has complex financial situations, such as multiple sources of income, investment portfolios, or business transactions, the time required to complete the forms can be significantly longer.

Another challenge facing taxpayers is the lack of knowledge and understanding regarding tax laws and regulations. Many taxpayers are unaware of the many deductions and credits available to them, which can lead to missed opportunities for tax savings.

Some taxpayers are also unaware of their tax obligations, particularly if they have not filed tax returns in the past or have recently become self-employed or started a business. Such taxpayers are at risk of inadvertently violating tax laws, which can result in fines, penalties, or legal action.

Updates from the Government

In recent years, the government has made some efforts to simplify tax laws and improve tax preparation processes. For example, the Tax Cuts and Jobs Act of 2017 made several changes to the tax code, including increasing the standard deduction and simplifying tax brackets. The changes were aimed at reducing the complexity of the tax code and making it easier for taxpayers to file their returns.

The IRS has also introduced several programs to help taxpayers, including the Free File program, which provides free tax preparation software to eligible taxpayers. Additionally, the IRS has increased its efforts to educate taxpayers about tax laws and regulations, including providing online resources and educational materials.

In response to the COVID-19 pandemic, the IRS extended the tax filing deadline to July 15, 2020, to provide relief to taxpayers. The IRS also introduced several other measures to help taxpayers, including providing tax credits for businesses affected by the pandemic and allowing penalty-free withdrawals from retirement accounts.

How to Make Tax Preparation Easier

Tax preparation can be a challenging process, but there are several ways to make it more manageable. Here are some tips that can help:

1. Start early. Begin gathering and organizing all necessary documents as early as possible to avoid last-minute stress and mistakes.

2. Seek professional help. Consider hiring a tax preparer or using tax preparation software to ensure accuracy and to save time.

3. Understand tax laws. Take the time to learn about tax laws and regulations, particularly those that apply to your situation, to ensure that you are taking advantage of all available deductions and credits.

4. Keep good records. Maintaining accurate and detailed financial records throughout the year can make tax preparation much easier and reduce the risk of errors.

Conclusion

Tax preparation is a complex and challenging process that can be plagued with criticisms and difficulties. However, it is also a crucial aspect of our financial lives and one that we must all deal with each year. By understanding the challenges and working to make tax preparation more manageable, we can lessen the burden and ensure accuracy in our tax reporting.


There is some controversy concerning the difficulty of income tax preparation. Many of the rules and laws surrounding income tax preparation are considered by many to be very confusing.

This is why most people choose to receive assistance from tax preparers, however, this can sometimes be very costly. Also, if the tax preparer makes an error, it will be the tax payer, not the preparer, that will be held accountable. Instant refund loans may sometimes be pushed by tax preparers, which can also prove to be detrimental to the tax payer.

Filers can run into tax return preparation problems whether they are filing the returns themselves or hire a tax preparer. There are several problems that filers should be aware of when choosing to hire someone to aid in income tax preparation. Those who hire tax preparers should be skeptical of professionals who promise abnormally high refunds.

People will receive a tax refund if they pay the government more money in taxes than they were required to pay. The tax refund will be based on income, deductions, and overpayment. This means that tax return preparation, regardless of who it is performed by, should result in similar refunds. Preparers who offer a larger refund may not be filing tax returns correctly.

Also, filers should be aware that tax preparers are not permitted to charge a contingency based fee, meaning they cannot charge based on the amount of tax refund the person receives. Those who file with tax preparers will still be required to keep their personal records in order. Tax preparers will still need to view all the necessary paperwork and receipts in order to complete the IRS forms.

Filling out the incorrect form is a common problem that occurs during income tax preparation. People must determine their correct filing status to ensure they will complete the correct form. This means that there is a specific form for single individuals, married individuals with or without children, widows, etc. Errors in tax return preparation will be greatly reduced when people ensure that they are filling out the proper paper work.

Another common problem is claiming certain people as dependents when they are not eligible. It is important to establish the status of every person in the household before claiming dependents. All income must be reported during income tax preparation. Some people may fail to report income that is not included on their W-2 Form; this can create considerable problems with the IRS.

To avoid common problems, it is advised that the filer: check to make sure the forms are signed in the proper places, ensure that all parties (such as the spouse) have signed the forms, copies of all income forms (such as W-2 and 1099) are attached, all personal information (such as social security numbers) is correct, all calculations are free of mathematical errors, and that proper postage is attached and mailed to the correct address.