is now 
If your head is spinning
from all the new tax law changes, you’re not alone. Even the IRS’s own National Taxpayer Advocate
(yes, there’s a person with that job) has reported to lawmakers that today’s
tax code is so complicated it “obscures comprehension”.
Speaking to members of Congress about her 2012 annual report, Nina Olsen said the tax code is in serious need of revision and described it as an “unconscionable burden” on taxpayers.
Olsen added that the complexity of today’s tax laws requires nearly 60 percent of us to hire professionals to prepare our taxes. Another 30 percent of taxpayers are opting to purchase tax calculation software for the first time as they prepare their own return.
Bottom line: The report reveals taxpayers are spending more time preparing their tax returns than ever before and the incidence of errors is increasing dramatically for self-prepared returns.
Nina Olsen reports, “An analysis of IRS data by the Office of the Taxpayer Advocate shows it takes U.S. taxpayers (both individuals and businesses) more than 6.1 billion hours to complete filings required by a tax code that contains almost four million words and that, on average, has more than one new provision added to it daily.”
To make matters worse, although lawmakers have avoided the “fiscal cliff”, tax law updates have added more complexity rather than relief by:
- creating another income tax bracket
- providing a new 20% bracket on capital gains and qualified dividends
- adding new rules limiting personal exemptions
- allowing for a continued phase-out of itemized deductions
So how does this affect you and what can you do? Think stress relief.
If you have a more complex tax return that would, for example, involve mortgage interest, itemized deductions, or a 401K or IRA deduction, or if you own a business, there is an inherent value to hiring a professional to help you navigate the murky tax waters.
When you’re ready, contact McRuer CPAs at 816.741.7882.
