How Long Should it Take to Do My Taxes?

How Long Should it Take to Do My Taxes?

Have you done your taxes yet? If so, how long did it take you? I no longer do my own taxes, but back when I did I usually spent a long evening collecting all the necessary paperwork and plugging the numbers into TurboTax.

Well, guess what? According to the IRS, if you’re amongst the 68% of filers who use Form 1040, you’ll spend a whopping 22 hours filing your taxes. 22 hours!

I know what you’re thinking: how could it possibly take 22 hours to file your taxes? To be fair, the form completion accounts for just four of those hours. The rest of the time is made up of record keeping (10 hours), tax planning (3 hours), form submission (1 hour), and “other” (3 hours).

The average cost for all of this? $290.

For 1040A filers (19% of all tax filers) the number drops to 10 hours, broken down as follows:

  • 4 hours for record keeping
  • 1 hour for tax planning
  • 3 hours for form completion
  • 1 hours for form submission
  • 2 hours for “other”

The average cost for tax prep using Form 1040A is $120.

For 1040EZ filers (13% of all tax filers) it takes 7 hours to file your return, as follows:

  • 2 hours for record keeping
  • 1 hour for tax planning
  • 2 hours for form completion
  • 1 hours for form submission
  • 1 hours for “other”

The average cost for tax prep using Form 1040EZ is $50.

Finally, if you run a business, you’re likely filing Form 1040 along with one or more of the following: Schedule C, C-EZ, E, or F, and Form 2106 or 2106-EZ. Time required? 32 hours!

  • 16 hours for record keeping
  • 4 hour for tax planning
  • 6 hours for form completion
  • 1 hours for form submission
  • 4 hours for “other”

And the average cost for a business return is $410.

As for us, we no longer do our own taxes, but we do have to pull all of the paperwork together. To do this, I’ve developed a finely-tuned system that involves throwing everything in a pile during the year and then sorting the pile the night before I visit our tax guy. Total time required? About two hours.

Be sure to also check out GetRichSlowly’s post on tax preparation costs for 2012.

10 Responses to “How Long Should it Take to Do My Taxes?”

  1. Anonymous

    Filing taxes is not complicated but filing your own tax return and thinking you know tax law and regulations is another. If you own a business or have investment income including passive activities. The tax service fees are money well spent. Mark 401-749-0460. Free estimates on tax services for individual and business tax returns.

  2. Anonymous

    I spent roughly an hour on my taxes back in February, long enough to determine that I owe (no refund). Yesterday I spent another hour on my taxes and efiled, and mailed the IRS a check.

    I have used TaxAct for many years now, and once you’ve done your taxes every year for a few years, there is no reason it should take too long to actually do the paper work.

    Since they are counting all the ‘prep’ time spent tracking medical receipts (and other paperwork) throughout the year for my HSA, the 22 total hours is probably accurate (spread out over an entire year) for me.

  3. Anonymous

    I have a business with multiple revenue streams and while it takes me a long time to do my taxes it still doesn’t take 22 hours. Maybe this is because I try to keep my record keeping up to date throughout the year so I don’t have to do a lot when I do my taxes (for one thing I have to have my retail totals by early January to file my sales tax for the previous year). I just don’t buy these time totals unless the average American who does their own taxes is FAR worse at math than I thought.

  4. Anonymous

    I don’t know where they get those time estimates from. They seem quite inflated to me. I’ve literally sat down and done a 1040ez in 10 minutes. I can’t imagine how it would take 2 hours. What record keeping does someone with a 1040ez generally need to do?

    I used to do all my taxes by hand. I figured about 8 hours total for federal and state and my tax situation was not simple. I did a full 1040 with stock sales, itemized deductions and rental properties.

    They list “1 hour for form submission”. How does that take 1 hour? Most people hit ‘submit’ on their tax software and other people shove them in an envelope and put them in the mail. Where do they get 1 hour from?

  5. Anonymous

    Eww another tax reminder. I’m not looking forward to that mess at all. For 2010 my taxes weren’t too painful to prepare. Last year though…my boss convinced me to use my personal paypal account for his website checkout. Now I have to wade through all of that to try to extract my own paypal expenses. I should be billing him for the extra time it’s adding.

  6. Anonymous

    I happily pay someone to do my taxes. It cost me $475 but I got to spend an extra day w/ my family (I work a lot…) and have someone to represent me in case something goes wrong. Plus my taxes are quite complicated… long story. Worth every penny.

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