David Fries - Tax year 2005

E-File, but don't expect it to save you time!

The claim on page two of the US 2005 1040 instructions is, "E-file is fast, secure, and accurate." It goes on to say that refunds come back sooner. Is that the fast they are talking about? Or are they talking about how long it takes to complete your taxes? Probably not. Because if you go back to page 79 on the "Estimates of Taxpayer Burden", which I wouldn't expect many people to look at, they give estimates for how long it would take to fill out a set of tax forms in three different ways; Self-Prepared Without Tax Software, Self-Prepared With Tax Software, and Prepared by Paid Professional.

Taxpayer and Form Combinations for Form 1040 Filers	hours Self-Prepared Without Tax Software	hours Self-Prepared With Tax Software	hours Prepared by Paid Professional
Nonbusiness Filers	16.1	21.8	10.9
Form 1040 and other forms and schedules, but not Schedule A or D	13.7	15.9	7.6
Form 1040, Schedule A, and other forms and schedules, but not Schedule D	16.7	22.7	12.1
Form 1040, Schedule D, and other forms and schedules, but not Schedule A	17.5	18.3	12.8
Form 1040, Schedules A and D, and other forms and schedules	27.5	37.8	18.0

I don't have a business so I'm only looking at the nonbusiness filers section. In every case it takes less time to have a professional prepare your taxes (which is to be expected, if it took longer who would use them?). I would have expected that you would be able to zip right through the forms if you were to use tax software. What was surprising to me was that it took longer in every case to prepare your taxes yourself with tax software than it takes to do it without tax software. On average they list 5.7 hours more. That conclusion surprised me, but without any more information only speculate why it would take longer. Maybe the amount of time it takes to select the tax software from competitors, install, set it up, learn how to use it, figure out what to do when you get the form prepared more than offsets what I would have expected would be faster data entry.

I filed my taxes by paper. I wanted to get it done with as fast as possible.

Written by David Fries <david@fries.net>

My pgp key is available and the fingerprint follows. See
http://www.gnupg.org/ for details.

pub	1024D/CB1EE8F0 2001-08-21	David D. Fries <david@fries.net>
	Key fingerprint = 7079 F7EA D7EA 8E93 5B84 1900 008F 39D9 CB1E E8F0
uid		David Fries <dfries@mail.win.org>
sub	1024g/D9B8B029 2001-08-21

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