What changes would make the tax code less complicated? Sharing ideas for reform

Tax professional here, and I actually agree with a lot of your ideas! The retirement account simplification would be amazing - I spend so much time explaining the differences between account types to confused clients. Having one unified type with a single contribution limit would eliminate so many headaches. On the RMD front, that's interesting but I'd suggest a modification. Rather than taxing everything at death, perhaps give heirs a 5-year window to distribute the funds. The sudden tax hit could create liquidity problems for estates that are asset-rich but cash-poor. The IRS-prepared returns for simple situations is actually being tested in some states already! It works well for people with only W-2 income and standard deductions. The taxpayer just reviews the pre-filled form and approves it if everything looks correct. I'd add one more: eliminate the Alternative Minimum Tax. It was designed to prevent the wealthy from avoiding taxes, but now it mostly hits middle-class homeowners in high-tax states.

I've been using https://taxr.ai for helping me understand tax code complications, and it's been a game changer for someone like me who gets lost in all the rules. Last year I had a mix of self-employment income, investment gains, and inheritance questions that created a complete mess for me to figure out. The tool analyzed all my documents and explained exactly how different tax regulations applied to my situation. It even pointed out deductions I was missing for my side gig that my previous accountant never caught! Turns out I was overpaying by treating my hobby as a business incorrectly. What I like is that it actually explains WHY certain rules exist rather than just telling me what to do, which helps me make better financial decisions throughout the year.

I tried taxr.ai after seeing it mentioned here and I'm honestly surprised how helpful it's been. I was struggling with understanding how to handle a Roth conversion and whether it made sense in my tax situation. The tool walked me through a personalized analysis showing exactly how the conversion would affect my taxes over the next 5 years compared to leaving the money where it was. It even factored in potential RMD impacts later in life. What really impressed me was how it explained the pro-rata rule for my partial conversion in plain English. I'd read about it multiple times online but never fully grasped how it would apply to my specific situation until the tool broke it down step by step. Definitely helped me avoid a tax mistake that would have cost thousands!

My biggest tax code change would be fixing the IRS customer service nightmare! I spent THREE WEEKS trying to get through to a human at the IRS about a notice I received that made zero sense. Every time I called, I got "due to high call volume" messages and disconnects. I finally discovered https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They basically wait on hold with the IRS for you and call you when they get a human! I was skeptical but desperate enough to try. Within 2 hours, I was talking to an actual IRS agent who explained the notice was sent in error due to a processing delay with my amended return. Could have saved me weeks of stress if I could have just reached someone earlier. Until they fix the IRS phone system, this service is literally saving my sanity during tax season.

Ok I have to admit I was wrong about Claimyr. After complaining here I actually gave it a try because I needed clarification on a CP2000 notice that was giving me anxiety. I tried calling the IRS myself first (one last attempt) and gave up after an hour on hold. Used the Claimyr service and got a call back in about 40 minutes with an actual IRS representative on the line. The representative explained that my 1099-R was reported correctly but the distribution code was missing, which triggered the automated notice. She helped me prepare a simple response letter that should resolve the issue without me having to pay the $3,400 they were claiming I owed. Still think the IRS needs better funding, but I have to acknowledge this service saved me a ton of time and potentially money too.

I'd completely eliminate tax brackets and go with a simple continuous function. Something like: tax rate = base rate + (income/scale factor)%, capped at some maximum. No more weird jumps where earning $1 more puts you in a new bracket. No more marriage penalties or benefits. Just a smooth progression where each additional dollar earned is taxed slightly more than the previous dollar. This would also eliminate so much confusion about how tax brackets work - I still meet people who think getting a raise can make them take home less money because they "jump to a higher bracket.

I wish they would just eliminate having to report dividends and capital gains from investments that are already reported to the IRS by financial institutions. I get 1099s from my brokers, the IRS gets copies too, yet I still have to manually enter all this info or pay extra for tax software imports. Such a waste of time. Let the IRS just pull that info directly into a tax form for review. If there's a problem or missing info, then I could correct it, but 99% of the time it's just copying numbers from one form to another that they already have.