A survey of 4,000 Americans who plan to file taxes this year reveals that, though it may be one of life’s unavoidables, most generations are unaware of some of the terms and intricacies.
The poll divided the respondents evenly by generation and gender and found some differences.
According to those surveyed, 20% of Gen Z believe that students don’t need to file taxes, 17% believe that you can write anything off as a business expense, and 13% think that if you’re paid in cash, you aren’t required to pay taxes.
One in four Baby Boomers believed that you don’t need to file taxes if you earn under the IRS income requirements (27%). And a quarter of millennials and Gen X even believe that immigrants don’t pay taxes.
The facts are: a business expense can only be included if it is something necessary and directly related to your business; students and people earning below the IRS threshold are not required to file, but should file if federal taxes were taken out of any earnings or if you are eligible for certain refundable credits because you may have a refund coming.
And immigrants are indeed required to pay taxes on any U. S. income made throughout the year.
Nearly a quarter (23%) of Gen Z and 28% of millennials have filed their own taxes directly, sending to the IRS without anyone’s help.
But many admit they haven’t ever filed their own taxes. Instead, 54% of millennials opt for an online tax service and 37% use a professional. One-third of Gen Z said they coral their parents to do it, whereas, half of Gen X and 44% of Baby Boomers use an online or tax software system to file.
Conducted by Talker Research on behalf of TurboTax, the survey also put respondents’ tax knowledge to the test.
Less than half of those polled (47%) were able to properly match the term “earned income tax credit” with its definition, with only 37% of Gen Z hitting the mark, compared to 56% of baby boomers.
DID YOU KNOW? IRS Collected Half a Billion Dollars in Back Taxes From Delinquent Millionaires in 2023, Sentencing Some to Prison
53% of all respondents correctly defined “cost basis” as the original amount paid for an asset, and 52% knew what a “standard deduction” was.
A majority was familiar with the terms “dependents” (67%), “filing status” (61%), “tax deductions” (59%) and “child tax credit (57%). Generationally, baby boomers are twice as likely to be familiar with the term “estimated tax payments” than Gen Z.
“Filing taxes can feel overwhelming” said Lisa Greene-Lewis, CPA and spokesperson for TurboTax. “There’s no need to be overwhelmed, as there are options. . . whether you want to do your taxes yourself or have a tax expert do your taxes for you.”
Regardless of how familiar they are with the terms, more than three-quarters (77%) of Americans agree that when it comes to filing taxes, they just want their money as soon as possible.
This may be why 57% of respondents typically file by the end of February and only 13% wait until the month of April.
Over one-third of those surveyed (34%) believe that they will get more money in tax refunds this year than they did in 2024.