The typical Gen Z American estimates that they only understand about 44% of the tax filing process, in keeping with recent research.
A survey of 2,000 Americans 18-26 checked out how they’re feeling about tax season and located that over half (56%) admit they’re intimidated by the process of filing their taxes.
Interestingly, the same percentage of respondents “very much” look ahead to filing their taxes (29%) as those that aren’t looking forward to it in any respect (28%).
Gen Z is even seeking to get ahead of the curve — by the time of the survey, nearly a fifth of respondents already filed their taxes for this 12 months (17%).
Those that haven’t filed yet aren’t lagging too far, with 50% aiming to file their taxes by the end of February at the latest.
Thirty-eight percent wish they might use the time they spend doing their taxes to be with family members or watch TV (37%) as a substitute.
For some, cleansing their home (31%) or working (26%) even sounds more appealing than the task of filing their taxes.
Still, the deed must be done, as 62% acknowledge that it’s higher to file taxes early.
Conducted by OnePoll for TurboTax, the survey found that 53% anticipate getting a tax refund in 2024.
The typical Gen Z American who’s expecting a refund, estimates that they’ll get back $935.80, and more than 1 / 4 (27%) have their hopes as much as get back more than $1,500.
In relation to tax season, Gen Z gets details about filing their taxes from their parents and relations the most (48%), followed by social media (31%) and friends (29%).
Nonetheless, respondents know they’ve more to learn. Of those that filed taxes previously, just 22% feel “far more confident” this time around.
Some areas that they need more education in are the process itself, with 30% expressing uncertainty that filing early makes any difference.
And more than two-thirds of respondents were unsure or didn’t know that receiving a tax refund while making under the IRS’ income requirement was possible (68%).
Further, one in 4 feel uneducated about the alternative ways they’ll save on their taxes when filing (26%).
Just 38% of respondents knew that having a toddler could help save on their taxes and even fewer knew that a recent job can have an effect on their taxes (36%).
These changes are especially necessary to maintain top of mind for Gen Z, as many have undergone tax-changing shifts over the past 12 months like getting a recent job (34%), investing (21%) or starting a self-employed business (17%).
“There are lots of ways for Gen Z to save lots of on their taxes. The survey revealed more than two-thirds of respondents were unsure or didn’t know that receiving a tax refund while making under the IRS income requirement was possible. Nonetheless, the IRS reports over a billion dollars in unclaimed refunds every 12 months,” said Lisa Greene-Lewis, CPA and tax expert at TurboTax. “One of the biggest mistakes I’ve seen is Gen Z not filing in any respect and leaving money on the table, especially since they’re continually making life moves that may result in tax advantages that will help their tax consequence.”
“With the average refund being over $3,000 last 12 months it will be significant to file as soon as possible so you’ll be able to get that a refund. The IRS will issue most refunds inside 21 days or less of acceptance of filers returns in the event that they e-file with direct deposit.”
In relation to their refund, Gen Z Americans can be most inclined to spend it on necessities like bills (45%) or groceries (31%).
Others would treat themselves a bit, opting for brand spanking new clothing or shoes (28%) or putting it towards a recent vehicle (16%).
On average, those surveyed can be concerned with saving about 37% of their refund and investing 23% of it, although 27% shared they wouldn’t invest any of it.
“With bank card debt on the rise amongst Gen Z, they might use some of their refund to pay down debt,” said Greene-Lewis. Even though it could seem early, they might also begin investing of their retirement. That move may help them save on their taxes since you’ll be able to contribute as much as $7,000 to your IRA for 2024 and potentially deduct your contribution in your taxes.
You may as well get the little-known credit called the Saver’s Credit which is as much as $1,000 for single filers and as much as $2,000 married filing jointly for just investing in your retirement. A win-win!”
Survey methodology:
This random double-opt-in survey of 2,000 Gen Z respondents was commissioned by TurboTax between Jan. 30 and Feb. 4, 2024. It was conducted by market research company OnePoll, whose team members are members of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).