September 25, 2016
Generations: How Millennials (surprisingly) approach taxes, pt 1
No one would deny there are generational differences. For example, in the realm of music, Baby Boomers of course had their rock ‘n roll. But other generations have their own preferences, from hip hop to a host of other genres.
What about taxes? In this two-part post, we will take note of some ways in which Millennials tend to approach taxes differently than other generations.
Our information comes from a survey conducted recently by the Harris Poll in conjunction with the respected financial affairs website NerdWallet. The group surveyed consisted of more than 1,600 people who filed taxes in 2015 and intended to do so again in 2016.
Rather surprisingly, the survey found that Millennials had a high rate of concerns about filing their taxes. More than 80 percent of them were worried about something regarding taxes, such as not paying the right amount or making some sort of mistake.
The survey also revealed that Millennials, raised in a DIY-age, are not as accustomed to seeking help as other generations. The survey showed that more Millennials look to people they know (friends or family) for tax questions than to tax professionals.
This can be a recipe for trouble when trying to comply with the provisions of the exceedingly complicated U.S. tax code. This is particularly true for Millennials who work in the sharing economy, getting 1099s rather than traditional W-2s.
It is therefore rather remarkable that the percentage of Millennials who prepare and file their own taxes using paper returns is nearly double the rate for people who are older than 35.
In part two of this post, we will discuss how Millennials can overcome these challenges to improve their tax compliance and stay on the right side of the IRS.