Tax Filing Burden Tops $544 Billion in 2026

Federal tax compliance is expected to cost the US economy more than $544 billion in 2026, according to Tax Foundation analysis based on IRS and White House estimates. The total combines about $387 billion in lost productivity with roughly $157 billion in direct expenses, including tax software, preparers, printing, and postage. Together, the burden exceeds 1.7 percent of GDP.

The time involved is substantial for households and businesses. Nearly 6.9 billion hours are projected to go toward recordkeeping, gathering documents, learning tax rules, preparing forms, and submitting returns. Tax Foundation compares that workload with 3.32 million full-time workers, a figure larger than Chicago’s population and nearly 35 times the IRS workforce in fiscal 2025.

The underlying tax structure remains complicated even after the One Big Beautiful Bill Act changed parts of the federal code. In fiscal 2025, Americans filed 271.4 million returns, including individual and corporate income tax filings and employment tax returns. The IRS estimates compliance costs under requirements from the Paperwork Reduction Act, using taxpayer surveys and administrative data. For small-business owners, the practical cost is time and money diverted from running and expanding their firms.