Americans will spend a staggering $146 billion and 11.6 billion hours on tax compliance in 2026, and the bulk of that burden comes down to filling out paperwork, according to a new analysis.

As reported by Fortune, the findings come from Postal, a virtual mailbox and compliance service that reviewed data from the Office of Management and Budget (OMB) and the Bureau of Labor Statistics (BLS). The company found that individual filers will spend an average of 12 hours completing their returns this year, costing roughly $576 per person in labor hours alone. Add in out-of-pocket costs like tax software and accountants, and the average American taxpayer spends about $864 total just to comply with federal tax rules.

The IRS expects to receive around 169 million individual returns in 2026. Americans will collectively log 2.1 billion hours on Form 1040, the standard individual income tax return, making it one of the single biggest drains on the country's time.

The burden doesn't stop with individuals. Postal estimates business tax returns cost companies more than $126 billion annually in staffing and expenses, or an average of $9,090 per return. Filing Form 941, the employer's quarterly federal tax return, adds another $47 billion in costs nationwide. The W-2 and W-3 filing series tacks on $8.8 billion more. Even organizations that owe no taxes still absorb more than $6.2 billion in compliance costs.

When you add everything up, the total federal compliance tab, including out-of-pocket expenses, reaches nearly $738 billion. The OMB currently lists more than 10,000 forms and documents that individuals and organizations must complete each year, and in 2026, federal agencies are expected to receive more than 210 billion responses to compliance forms.

Max Clarke, co-founder of Postal and a former mergers-and-acquisitions attorney, says the problem isn't that people are careless, it's that the system itself is broken.

"Compliance isn't difficult because people are careless. It's difficult because it's fragmented, deadline-driven, and overwhelmingly manual," Clarke told Fortune.

He argues the government already has the information it needs to calculate what each taxpayer owes, thanks to payroll reporting. "It should be telling me exactly what I owe," he said.

For now, the vast majority of the 169 million Americans filing returns this spring will spend an average of 12 hours doing math the government could theoretically do for them, and pay roughly $864 for the privilege.