Tax season is a perennial stressor, but for Generation Z—the youngest demographic currently navigating the choppy waters of the IRS—it represents an unprecedented challenge. A striking one in four Gen Z taxpayers admitted they may need to consult a therapist to handle the emotional toll of tax filing, a sentiment highlighting the anxieties tied to this annual financial rite of passage.
As the April 15th tax deadline looms, this generation’s unease is not merely about crunching numbers but intertwining with a broader narrative of financial literacy and the complexities of modern income streams. A survey by Cash App Taxes indicates that 54% of Gen Z individuals have either previously cried over taxes or anticipate doing so this year, reflecting a deep-seated dread rooted in the process. Many Gen Zers and millennials don’t even know when their taxes need to be filed, the Cash App survey found.
The issue seems to stem from several core areas: inexperience with tax filing, confusion over the necessary documentation, and an embrace of unconventional income sources like cryptocurrency. Richard Pianoforte, a tax expert, expressed little surprise at these findings, citing a lack of preparedness that schooling often fails to address.“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 totally understandable,” he says.
Even figuring out which documents you need to file can be anxiety-inducing, 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.”
For Gen Z’s tax novices, the overwhelming consensus is that help is a necessity. More than half expect parental assistance, and 12% leave the task entirely to their elders, per a Cash App Taxes survey. It’s a dynamic that speaks less to economic strife or ignorance than to seeking convenience and avoiding the feared repercussions of errors, which range from penalties to audits.
Technology has undoubtedly transformed the lives of Gen Z, offering tailored services at the tap of a screen. However, the arcane and high-stakes world of taxes remains an outlier to this trend, intimidating even the most tech-savvy young adults. “While some may want to pin the blame on Gen Z being too lazy to handle their finances, I think this particular issue runs deeper than that,” Alex Beene, a financial literacy instructor for the state of Tennessee, told Newsweek. “While tax software and online services have made filing easier, there’s still a reputation of it being a complicated system that intimidates novices to how to do it.”
While Gen Z’s financial dependence on their parents may be understandable, Ryan said it underscores a larger need for better financial education starting in youth.”By fostering tax literacy and self-sufficiency from an early age, we can ensure this generation builds a solid foundation for long-term financial wellness,” Ryan said.
Relevant articles:
– 25% of Gen Zers say they’ll need a therapist to deal with tax filing stress
– Gen Z Expects Parents to Help Them With Their Taxes, Newsweek, Tue, 26 Mar 2024 14:25:26 GMT
– Gen Zers whine that they need therapy — from the stress of filing taxes, New York Post, Mon, 05 Feb 2024 08:00:00 GMT
– One in 4 Gen Zers say tax stress could drive them to therapy. Blame their love affair with crypto—or the passions of youth, Fortune, Wed, 07 Feb 2024 08:00:00 GMT