Most Americans shouldn’t have to do their own taxes.
Ryan Wilson, Henry B. Tippie Chair in Accounting at the University of Iowa, examines why.
Faculty Bio:
Ryan J. Wilson is the Henry B. Tippie Chair in Accounting and the department executive officer in Accounting at the Tippie College of Business at the University of Iowa. Previously, he was director of the School of Accounting at the University of Oregon Lundquist College of Business. He earned his doctorate degree at the University of Washington. He’s received recognition for excellence in accounting instruction at both the University of Iowa and University of Oregon.
Transcript:
Today is April 15. Tax day. The end of a season when Americans sweat over their 1040 forms or pay someone else to sweat over their 1040s for them.
But it doesn’t have to be that way. An opt-in system called ReadyReturn, widely used in more than 30 countries, prepares taxes automatically for free, and most U.S. taxpayers can benefit from something like it.
For about half of American taxpayers who just have withholding taxes or 1099s, the government already has all the information needed to prepare the returns. This renders the tax preparation process unnecessary for most, as we’re only giving the government information it already has.
ReadyReturn is already used in countries like the UK, Denmark, Sweden, and Spain and the concept is simple. The government prepares your tax return for you using data it access through third parties such as banks or brokerages. The government mails you the return (or in some cases, texts it) and, if you agree with what the government says you owe, all you have to do is sign off.
And it’s free.
More complicated returns would still need to be completed by a professional. And if someone wants to do their own return even if they’re eligible for a ReadyReturn, they can still do that.
However, for many Americans who have relatively simple returns, especially older and younger taxpayers, the government already has all the information needed to prepare them. Therefore, there’s little point in taxpayers submitting W2s and other tax paperwork to the IRS. Imagine the relief of so many busy taxpayers knowing this archaic obligation is no more.
Adopting a ReadyReturn program would not make the annual tax return process more enjoyable. But it would least make it far less costly to millions of Americans in both time and money.
