Survey Finds 1 in 4 Gen Zers Stressed Over Taxes; Here's How to Navigate Filing
Tax season is here and young adults are particularly stressed about it. As per a recent Cash App Taxes survey, at least 1 in 4 Gen Z taxpayers said that they will need to see a therapist to deal with the stress of tax filing. Additionally, 54% said that filing taxes has always been stressful and brings tears to their eyes.
"I have children in that age group and I don’t think they’re prepared for it, school doesn’t prepare them for it, and it’s understandable," Richard Pianoforte, managing director of tax at Fiduciary Trust International, told CNBC Make It.
"Gen Z may already be finding other challenges in their financial life, and then thinking about taxes as this add-on challenge may only increase some of the anxiety associated with that," Eric Bronnenkant, head of tax at Betterment, a digital financial advisory company, told Fortune.
Experts say that even looking at the documents can be a source of anxiety, with 62% of first-time filers saying they aren't sure where to get their W-2s or 1099s. "Make sure you know what [documents] you have," Pianoforte says. "I think that’s the biggest issue when you ask younger folks, 'Did you get a 1099 from your bank?' Sometimes they don’t even know what a 1099 is."
According to the Internal Revenue Service, (IRS), there are several ways in which you can tame this stress. The first step to making your job easier involves gathering all the necessary records and documents. For example, the first form you will need to collect during the process is the W-2, or Wage and Tax Statement. Employees usually send out the W-2s by 31st January.
However, if you haven't received your W-2 from your employer yet, it's important to reach out to ensure they have your correct address on file. Individuals who worked as freelancers or independent contractors last year can expect to receive a 1099-NEC form from their employer instead of a W-2 to report income.
Also note that you will need to file your federal tax return by April 15, commonly referred to as the Tax Day. "The IRS site is a great resource, and it has gotten much better throughout the years," Pianoforte states.
Leveraging tools like the Interactive Tax Assistant on the website can offer targeted solutions. Additionally, selecting a trustworthy preparer can further alleviate concerns.
Opting for direct deposit can significantly minimize stress, as it's the safest and most efficient method for submitting an accurate tax return and often results in the quickest refunds. Taxpayers must also ensure they report any received unemployment benefits.
According to a Cleveland Clinic psychologist and president of the U.S. branch of the International Stress Management Association, Michael McKee, "Money is a major source of stress on people, and what tax season does is shine a great big spotlight on the issue."
Experts also emphasize the criticality of timeliness in tax filing. To evade last-minute stress, individuals should aim to tackle their taxes gradually over a two-month period.
