A new study estimates that the average Gen Z American only understands about 44% of the tax filing process.
A survey of 2,000 Americans between the ages of 18 and 26 asked how they felt about tax season and found that more than half (56%) admitted to being intimidated by the tax process. did.
Interestingly, the same proportion of respondents (29%) are “very” looking forward to filing their taxes as those who are not looking forward to it at all (28%).
Gen Z is even trying to stay ahead of the curve, with nearly one-fifth of respondents already filing this year’s taxes (17%) by the time of the survey.
Those who have not yet filed are not far behind, with 50% aiming to file by the end of February at the latest.
38% would rather spend the time they spend paying their taxes being with loved ones or watching TV instead (37%).
For some, cleaning a house (31%) or working a job (26%) is even more appealing than filing taxes.
Still, the act needs to be done, as 62% agree it’s better to file your taxes early.
Conducted by OnePoll, turbo taxThe survey found that 53% expect to receive a tax refund in 2024.
The average Gen Z American expecting a refund estimates they will get $935.80 back, and more than a quarter (27%) expect to get more than $1,500 back.
When it comes time to file taxes, Gen Z gets the most information about filing their taxes from their parents and family (48%), followed by social media (31%) and friends (29%).
But respondents know they need to learn more. Only 22% of people who have paid their taxes before feel “much more confident” this time.
There are areas where more education is needed about the process itself, with 30% saying they are unsure whether applying early will make any difference.
Additionally, more than two-thirds of respondents were unsure or didn’t know if it was possible to receive a tax refund even if they met the IRS’s income requirements (68%).
Additionally, one in four feel uninformed about the different ways they can save on taxes when filing their taxes (26%).
Only 38% of respondents knew that having a child could help them save on taxes, and even fewer knew that a new job could affect their taxes (36 %).
These changes are especially important for Gen Z to keep in mind. That’s because many people have experienced tax changes in the past year, such as taking a new job (34%), investing (21%) or starting self-employment (17%).
“There are many ways Gen Z can save on taxes. More than two-thirds of respondents in the survey are unsure whether it is possible to receive a tax refund even if they meet the IRS income requirements. “But the IRS reports more than $1 billion in unclaimed refunds each year,” says Lisa Green-Lewis, CPA and tax expert at TurboTax. he said. “One of the biggest mistakes I’ve seen is that Gen Z doesn’t file at all and leaves their money on the table. They’re especially worried about the tax benefits that help with their tax results. Because you’re constantly making moves in life that could lead to preferential treatment.”
“Last year’s average refund amount was over $3,000, so it’s important to file as soon as possible to get that money back. If a filer filed electronically with direct deposit, the IRS will We issue most refunds within 21 days.”
When it comes to refunds, Gen Z Americans are most likely to spend money on necessities like bills (45%) and groceries (31%).
Others reward themselves by picking out new clothes or shoes (28%) or using the money to buy a new car (16%).
On average, those surveyed would be interested in saving about 37% of their refund and investing 23% of it, although 27% said they would not invest it.
“Credit card debt is on the rise among Gen Z, so they may be able to use a portion of their payments toward debt repayment,” Green-Lewis said. It may seem early, but you can start investing for your retirement. This move may help them save on taxes, as he can contribute up to $7,000 to his IRA in 2024, and the contributions can be deducted from his taxes.
You can also get a lesser-known credit called the Savior’s Credit. This credit is available for up to $1,000 for single filers and $2,000 for married couples filing jointly for retirement investments alone. It’s a win-win! ”
Research method:
This random, double-opt-in survey of 2,000 Gen Z respondents was commissioned by TurboTax and conducted by a market research firm from January 30 to February 4, 2024. One polewhose team members market research group I have a corporate membership in the American Association for Public Opinion Research (Arpol) and the European Public Opinion Marketing Research Association (esomal).
