Why Millennials Are Afraid of Filing Taxes
Millennials spend a great portion of their day in front of a computer screen surfing the web and checking their social networks, but when it comes to taxes, they are more likely fill out the forms on paper rather than online. These individuals are also very worried about their taxes when filing.
According to a recent survey commissioned by Nerdwallet and conducted by Harris Poll, 17 percent of millennials are mailing in their tax returns. That is more than twice the proportion of older Americans (8 percent) who mail in their returns.
Millennials Are Worried About Mistakes, Incomplete Refunds
Millennials are more worried than other age groups when it comes to taxes. Eighty perecent of millennials fear they will make a mistake on their taxes, not receive a full refund or pay too much. Only 60 percent of older individuals, aged 55 and up, have these same worries.
Millennials also fear making a mistake on their taxes more than other age groups. Twenty-two percent admitted being afraid of mistakes, while only 17 percent of older individuals admitted the same fear.
Avoiding Tax Pros
Millennials are less likely to hire a tax professional, more often turning to family and friends instead for tax advice. Thirty-four percent of millennials are turning to friends and family, while 20 percent are using online sources to answer their tax questions.
When millennials do hire tax professionals, they are very likely to ask the professional a large amount of questions to ensure they are qualified to be doing their taxes. These questions are important to make sure that they are getting the best value for the money they are spending. Millennials should be asking questions like "Are you certified?" and "Will you fight for me if I am audited?"
Many millennials believe they do not require a tax professional or it is not worth the money required to pay for one. Millennials are less likely to require a complicated tax filing process because they typically do not own homes or have children.
Family and Friends for Advice
Turning to friends and family is a dangerous solution.
"Millennials have the most concerns about taxes, but unless their friends and family are accountants, turning to loved ones for tax advice is the least-reliable source for accurate, up-to-date information," Liz Weston, NerdWallet columnist and personal finance expert said.
Investing Is a Good Idea
All age groups surveyed believed that, when getting a refund from their taxes, it should be invested. Last year, 4 in 10 taxpayers who received a refund invested or saved the money. This year, 54 percent of those who planned to receive a refund said they would be investing or saving the money.
Still, millennials are not confident they are getting the full refund that they deserve. Last year, 19 percent of millennial men said they do not believe they got the maximum refund possible. Just 5 percent of men 45 and older thought that they did not receive a full refund.
Even though many millennials are sending in their taxes using the paper forms, Weston says that e-filing is a safer and faster method to file taxes.
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