Did you ever wonder why you have to file a tax return? After all, the IRS already knows how much you made from the W-2 and 1099 forms filed by your employer and others. It knows how many dependents you have, as well as other routine information from your previous returns.

So, unless you itemize your deductions, why doesn't the IRS just calculate your tax for you?

Good question, and one that Rep. Brad Sherman (D-Calif.), a CPA, seeks to answer with a bill he has introduced in Congress. Sherman's Tax Filing Simplification Act of 2017, would direct the Internal Revenue Service (IRS) to develop a new program to provide taxpayers with a pre-prepared tax return with their income tax liability or refund amount already calculated.

“Under the Tax Filing Simplification Act, most Americans would receive a tax return already prepared by the IRS. They could hit ‘submit’ and they’re done.  Or they could make changes and then hit ‘submit’,” said Rep. Sherman. “Or they could simply ignore the IRS pre-prepared return and submit their returns just as they do now.”

The bill would also require the IRS to create new software to allow all taxpayers to prepare and file their taxes directly through the IRS. 

Additionally, the bill would allow taxpayers to download information the IRS already has (like their W-2 and 1099 forms) directly from the IRS’s website.

Co-sponsors of the measure include Reps. Don Beyer (D-VA), Grace Napolitano (D-NY), Eleanor Holmes Norton (D-DC), Jamie Raskin (D-MD), Tim Ryan (D-OH), and Tom Suozzi (D-NY). 

The bill is based on legislation introduced in the U.S. Senate by Senator Elizabeth Warren (D-MA).

We’ve all heard the saying that money can’t buy you happiness, but a new study from the University of British Columbia and Harvard Business School suggests that might not actually be the case.

After surveying over 6,000 people from the U.S., Canada, Denmark, and the Netherlands, the researchers found that consumers were happier when they used their money to buy themselves extra personal time. While some people may balk at the idea of hiring a person to do their laundry, mow their grass, or take care of other chores and errands, lead author Ashley Whilans says that the reduced stress leads to greater happiness.

“People who hire a housecleaner or pay the kid next door to mow the lawn might feel like they’re being lazy,” she said. “But our results suggest that buying time has similar benefits for happiness as having more money.”

Greater life satisfaction

To further their findings, the researchers performed a field test that randomly asked some participants to spend $40 on a time saving purchase and $40 on a material purchase on consecutive weekends. Responses indicated that participants felt happier after spending money on the time saving purchase rather than the material purchase.

When asked to elaborate, respondents indicated that making purchases that saved time tended to increase life satisfaction, regardless of how much income they had to work with. The finding surprised researchers, who initially thought that only those with more disposable income would benefit from time saving purchases.

“The benefits of buying time aren’t just for wealthy people,” said senior author Elizabeth Dunn. “We thought the effects might only hold up for people with quite a bit of disposable income, but to our surprise, we found the same effects across the income spectrum.”

Buying out of unpleasant experiences

While the study indicates that spending money to save time is beneficial, the researchers point out that consumers rarely make these kinds of purchases on their own. An additional survey of 98 working adults found that only 2% would use an unexpected $40 windfall on a purchase that saved them time.

“Although buying time can serve as a buffer against the time pressures of daily life, few people are doing it even when they can afford it,” said Dunn. “Lots of research has shown that people benefit from buying their way into pleasant experiences, but our research suggests people should also consider buying their way out of unpleasant experiences.”

The full study has been published in Proceedings of the National Academy of Sciences.