The annual tax filing deadline is fast approaching, once again throwing into stark relief the ways in which the U.S. tax system can disproportionately burden working families and exacerbate existing economic inequalities. While ostensibly designed to be progressive, the intricacies of tax law, coupled with limited access to resources and professional assistance, often create significant challenges for those with lower incomes.

For many low- and middle-income individuals, navigating the tax system is a daunting task. Filing requirements can be confusing, and the process of claiming eligible credits and deductions can be particularly challenging without professional guidance. This is especially true for those who lack access to reliable internet or computer resources, or who face language barriers.

The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) are vital tools for poverty reduction, but maximizing these credits requires careful attention to detail. Many eligible families fail to claim these credits, either due to lack of awareness or the complexity of the application process. This represents a missed opportunity to lift families out of poverty and provide crucial financial support.

Furthermore, the IRS’s limited funding and staffing levels have resulted in reduced customer service and longer wait times for those seeking assistance. This disproportionately impacts low-income taxpayers who are less likely to afford professional tax preparation services and rely more heavily on IRS support. The Taxpayer Advocate Service (TAS), an independent organization within the IRS, attempts to bridge this gap, but its resources are also stretched thin.

The complexity of the tax code also creates opportunities for wealthier individuals and corporations to exploit loopholes and minimize their tax liabilities. This effectively shifts the tax burden onto working families, who are less able to take advantage of sophisticated tax planning strategies. Progressive tax reforms are needed to address these inequities and ensure that everyone pays their fair share.

Penalties for failing to file or pay taxes on time can be particularly devastating for low-income families. These penalties can quickly accumulate, creating a cycle of debt that is difficult to escape. Payment plans and offers in compromise can provide some relief, but they often require navigating complex bureaucratic processes.

In addition to direct financial costs, the stress and anxiety associated with tax filing can take a toll on mental health and overall well-being. This is particularly true for those who are already struggling to make ends meet. The tax system should be simplified and made more accessible to reduce this burden.

Efforts to improve tax education and outreach are crucial for ensuring that all taxpayers, regardless of income level, have the information and resources they need to comply with tax laws and claim eligible benefits. Community-based organizations and volunteer tax assistance programs play a vital role in providing this support.

Moreover, policymakers should consider expanding access to free or low-cost tax preparation services, particularly for low-income families and individuals with disabilities. These services can help taxpayers avoid costly mistakes and maximize their tax refunds.

The upcoming tax deadline is a reminder that the tax system must be reformed to be more equitable and accessible to all. By simplifying the tax code, increasing funding for IRS customer service, and expanding access to tax assistance programs, we can create a system that works for everyone, not just the wealthy.