Taxes Are Interesting!

The topic of taxes might seem dull, but your tax refund is surely interesting, and many facts about the world of taxes are interesting, too. Some can even save you some money. For example: • The U.S. tax code is long: It topped 10 million words back in 2015, according to the Tax Foundation — about 2.4 million words in the federal Internal Revenue Code and another 7.7 million in federal tax regulations. (The instructions for Form 1040 and Form 1040-SR alone are more than 100 pages.) • Preparing tax returns consumes a lot of time: The Taxpayer Advocate Service (TAS) estimates that “individuals and businesses spend about 6.1 billion hours a year complying with the filing requirements of the Internal Revenue Code.” • Standard deductions roughly doubled in 2018: That means simply taking the standard deduction, rather than itemizing deductions, is the right move for many more people now. • Millions of Americans qualify to file their taxes for free: If your 2019 earnings are $69,000 or less, you can use tax-preparation software at no cost — for your federal tax return and possibly your state tax return, too. Learn more at IRS.gov. • You’re less likely than ever to be audited: Largely due to Congress cutting the IRS’s budget repeatedly, audit rates have been falling. In fiscal 2019, only 0.45% of returns were audited, compared with about 2.5% back in the 1970s. You can reduce your chances of being audited by filing a legible and error-free return, accounting for all your income. • You may be leaving lots of money on the table by not claiming credits or deductions available to you. Spend a little time looking into that — or use tax-prep software that will identify tax savings for you. For example, there are credits and deductions related to dependent children, adopting children, educational expenses, charitable contributions, medical expenses and more. Learn more at Fool.com/taxes, USA.gov and IRS.gov.