The Tax Cuts and Jobs Act Simplified the Tax Filing Process for Millions of Households

Put in dollar terms, complying with the individual income tax costs $99 billion annually. However, due to reforms made by the Tax Cuts and Jobs Act (TCJA), millions of Americans could see a simpler tax filing process come next April. According to our latest research, 28.5 million filers will now be better off taking the newly expanded standard deduction rather than itemizing their deductions. This change will reduce the time taxpayers spend working on their Form 1040 by 4 to 7 percent, translating into $3.1 to $5.4 billion saved annually.

Click the chart above to explore the data.

In addition to expanding the standard deduction, the TCJA made significant reforms to the Alternative Minimum Tax (AMT), which means far fewer filers will need to spend time working on their Form 6251. Estimates show AMT filings will decrease from 10 million to 1 million, which will result in another $4.6 billion in annual cost savings. These changes will simplify tax filing for tens of millions of taxpayers. This is a good start, however, federal tax reform is far from over. All of the simplifications made by the TCJA to the individual income tax code are scheduled to expire in 2025. Already, Congress is considering a second round of reforms to address this. You can learn more about how the TCJA reduced individual income tax complexity by downloading our new report at the link below.