Dive Brief:

• U.S. businesses will probably spend $131.8 billion in monetized time and out-of-pocket costs preparing and filing business income tax forms and related schedules and attachments during fiscal year 2026, an increase of 3.2% compared with costs incurred in the fiscal 2025 period ended Sept. 30, according to a Treasury Department estimate released in a Federal Register notice Monday.
• Technical and legislative changes in the reporting requirements, including those contained in the One Big Beautiful Bill Act, are expected to cut the time companies spend on preparing and completing their tax filings by 8.3% to 857 million hours. The estimated value of the compliance time’s burden is forecast to drop to $52.6 billion in the next fiscal year. 
• At the same time, the recouped time savings will be more than offset by the rise expected in out-of-pocket costs of the compliance burden, which are forecasted to jump 10.6% to $79.2 billion, according to the filing. These expenses include purchasing tax software, paying a third-party preparer, and printing and postage, according to the filing.  
   

Dive Insight:

This latest annual estimate on the taxpayer compliance burden comes toward the end of a challenging year for the IRS, which has raised questions for businesses about the agency’s abilities to smoothly handle the coming tax season. 

Trump administration reductions in the federal workforce slashed staff in IRS departments that manage tax filing by as much as 19% and the Treasury Inspector General for Tax Administration has warned the sweeping cuts may impair efforts to process returns, CFO Dive reported. 

In its annual estimate on taxpayer compliance burden, the Treasury Department Monday estimated that in fiscal 2025 a total of 13.9 million U.S. businesses spent 935 million hours and $127.8 billion to complete Form 1065 or 1120 and all related forms and schedules

What the Treasury Department didn't count were any losses incurred by U.S. businesses making "sub-optimal" choices related to tax deductions or credits, the department said.

The Internal Revenue Service's Office of Research, Applied Analytics, and Statistics developed the data.

Monday's figures showed the average estimated time that businesses or non-profits annually spend preparing and submitting tax returns and complying with government guidance totals 61 hours and 13 minutes. 

The Treasury Department plans to submit its estimate to the Office of Management and Budget for review. Any public comments on the filing are due by Jan. 14, 2026.

In a related release, the Treasury Department said Monday it expects 170.1 million individuals or couples will spend nearly 1.95 billion hours and $91.8 billion in monetized time plus out-of-pocket costs to complete individual income tax forms and related schedules and attachments in fiscal 2026.