Wrestling with America’s convoluted tax system costs you at least $570 a year, new research says — and it’s much worse if you trade crypto

The bill includes $387.5 billion in lost productivity from time spent dealing with taxes and another $157.1 billion in out-of-pocket expenses, including tax software and professional preparation.

For individual taxpayers, much of the cost comes down to time. According to the Tax Foundation, the IRS estimates that completing Form 1040, the standard federal individual income tax return, takes an average of 12 hours to complete — though Austin & Larson Tax Resolution says the average time to complete the form is 13 hours.

The Tax Foundation values an individual’s time at $47.55 an hour, based on average wages and benefits. Using the figures above, the average return eats up roughly $570 to $618 worth of a taxpayer’s time. This is the estimated value of the hours spent dealing with taxes instead of doing something else.

The burden can be considerably higher for taxpayers with more complicated returns. The IRS puts the average at eight hours for people without business income, compared with 24 hours for those with it.

Crypto adds to the reporting burden

For investors, trading cryptocurrencies like Bitcoin and Ether can make tax reporting even more complicated.

Form 1099-B now accounts for the largest share of the compliance burden calculated by the Tax Foundation. The form, traditionally used by brokers to report securities and other transactions, carried an estimated burden of nearly 2.2 billion hours, up from 674 million in 2022. The associated cost has climbed to more than $130 billion.

The surge coincided with new reporting requirements for digital assets. The Infrastructure Investment and Jobs Act of 2021 expanded the information crypto brokers must report to the IRS and broadened the definition of a broker to capture more cryptocurrency intermediaries.

The requirements were intended to improve tax compliance and increase revenue. The Joint Committee on Taxation originally estimated the digital-asset provisions would raise roughly $28 billion over 10 years, a fraction of the annual compliance burden now associated with Form 1099-B.

Crypto ownership has also become widespread enough that the rules can affect a sizable share of taxpayers. Surveys from Gallup and Pew Research Center estimate that between 14% and 19% of U.S. adults have invested in or used cryptocurrency. Pew found the share rises to 28% among adults between 30 and 49 years of age.

Regulatory uncertainty remains one reason that some Americans have refrained from investing. Charles Schwab’s 2025 Modern Wealth Survey found that 30% of non-crypto investors cited insufficient regulation as a reason for not owning it.

Ironically, Washington has made significant progress on the regulatory front. Congress established a federal framework for payment stablecoins through the GENIUS Act, while the Securities and Exchange Commission, as well as the Commodity Futures Trading Commission, have moved ahead with rulemaking under existing laws.

The broader CLARITY Act, which would establish a market structure framework for digital assets, has yet to clear Congress. For investors, however, clearer crypto rules don’t necessarily translate into a simpler tax return.

Why the tax code keeps getting more complicated

The complexity of the U.S. tax code is nothing new, but decades of revisions have kept adding to it. The National Taxpayers Union Foundation estimates that Congress has made 9,630 changes to the tax code since 2000.