A new survey reveals widespread misconceptions about taxes among Americans across generations
SWNY: A recent survey shows that many Americans, especially Gen Z, have some pretty wild ideas about taxes. For instance, 17% of Gen Z think you can write off anything as a business expense. Crazy, right?
The survey, which included 4,000 folks planning to file taxes this year, found that a lot of people just don’t get the basics. About 20% of Gen Z believes students don’t need to file taxes, and 13% think cash payments mean no taxes are due. Baby boomers aren’t much better, with 27% thinking they don’t need to file if they earn below the IRS threshold.
Interestingly, a quarter of millennials and Gen X think immigrants don’t pay taxes at all. But the truth is, business expenses must be necessary and directly related to your work. Plus, students and those under the IRS income limit should still file if they had taxes withheld or might get a refund.
And get this: 10% of people think younger generations have never filed their own taxes. But actually, 23% of Gen Z and 28% of millennials have done it solo. Many still rely on online services or parents for help, though.
When it comes to tax knowledge, less than half of Americans could correctly identify the earned income tax credit. Baby boomers did better than Gen Z, with 56% knowing the answer compared to just 37% of the younger crowd.
Most people know terms like “dependents” and “tax deductions,” but fewer are familiar with more complex terms. Baby boomers are also more likely to know about estimated tax payments than Gen Z.
Despite the confusion, 77% of Americans just want their tax refunds as quickly as possible. That’s why many file early, with 57% aiming to finish by the end of February.
Interestingly, millennials are just as likely to use smartphones as desktops for filing taxes. But baby boomers prefer handing everything over to a pro.
Lisa Greene-Lewis from TurboTax says filing taxes can be overwhelming, and many would rather face Black Friday crowds than deal with it. But there are easier options out there.
When asked where they’d like their tax dollars to go, 78% of respondents had strong opinions. Most wanted funds for Social Security and health programs, with education and support for veterans also high on the list.
Currently, people think about 23% of their income goes to taxes, but they’d be okay with paying an average of 28% if they could choose where it goes. A third believe they’ll get bigger refunds next year, and many plan to use that money for bills or savings.
TurboTax’s Karen Nolan emphasizes that many rely on tax refunds for essentials, so getting that money quickly is crucial. It’s all about making the process easier for everyone.
