Was There Ever Any Doubt that the 1040 is Getting More Complicated?

In a reinforcement of something that everyone probably realizes already, the 1040 is getting more complicated.  The IRS has now included Schedule L as a part of the 1040 package.  This new form is entitled “Standard Deduction for Certain Filers.”  For as far back as I can remember, the standard deduction was a single line item on the 1040.  Now, thanks to Congress’s tinkering with the tax code, we have a 21-line form to help us determine the amount of our standard deduction.

The standard deduction was supposed to make filing your 1040 simpler.  You did not have to keep up with any receipts, do any calculations, just determine your filing status and plug in the correct amount.

In my opinion, there are two reasons why this is happening.  First, and probably foremost, Congress cannot resist tinkering with the tax code.  This is also a reason why we will never attain true tax simplification.  Suppose for a minute that Congress passed a flat tax.  No deductions, no exemptions, just a set percentage tax on all your income.  It would not last.  Congress could not resist the temptation to carve out a tax benefit for this reason or that reason and the flat tax would be gone.

The second factor in the increasingly complicated tax code is the computer.  As a long-time tax preparer I remember the days of preparing tax returns by hand.  If I had to complete a 1040 by hand today, I would get out of the business.  Most returns have simply gotten too complicated to prepare without the assistance of a computer and good tax software.  As computer-generated returns have become more common, simplification has gone out the window.  So what if the return calculation is difficult?  Let the computer do it.