Gen Z Doesn’t Understand How to File Taxes – and the Stress Is Bringing Them to Tears

January 17, 2024

According to a new survey commissioned by Cash App Taxes, Gen Z (and some Millennials) are unprepared to tackle filing their taxes this year – and it’s causing a lot of anxiety: 

• Over half (54%) of Gen Z and 38% of Millennials report that the stress of filing taxes has brought them to tears, or probably will this year. 
• 1 in 4 Gen Zers are even saying they’ll need help from their therapist to recover from the experience. 
• 1 in 3 Gen Zers say the stress of filing taxes has caused an argument with a loved one.

The survey, which captured data from 1,000 U.S. adults who plan to file a 2023 federal income tax return, revealed that all this stress is likely stemming from an overall lack of clarity around the process of filing taxes. Almost half (45%) of Gen Z and, surprisingly, 36% of Millennials are unsure of when taxes even need to be filed, and 62% of first-time filers aren’t sure where they will get their W2s or 1099s.

Just 24% of Gen Z will handle taxes on their own without help. A majority (52%) expect their parents to help, and 12% plan to hand off the entire responsibility of filing a tax return to their parents. 

Additional takeaways from the survey include:

• Interest in Innovation: 94% of respondents expressed interest in innovative tax solutions, especially tax filing services that are actually free without upsells or unexpected charges. 
• The stress runs deep: On average, Gen Z and Millennials plan to spend 9 hours filing their taxes. This increases to 13 hours for first-time filers. 
• Gen Z would rather…. 2 in 3 would give up something major for a full month in order to avoid filing their taxes, with 1 in 3 stating they would give up all social media.
• Taxes > Pythagorean Theorem: While only 6% say school was their top source of learning about filing taxes, 91% say it is an important lesson to be taught, rating it ahead of other common school lessons, such as the Pythagorean theorem, ancient Greek history, the mitochondria, and especially the recorder. 
• Many are smart spenders and savers: Most of the respondents plan to put their refund money to practical use: 60% say they’ll save some, and 55% will use the money to pay for necessities. 19% will use the money to pay off student loans.
• Estimator tools are your best friend: 72% of Gen Z and 76% of Millennials plan to use a refund estimator tool.
• There’s an app for that: 33% say a mobile device is their preferred method of filing a tax return, ahead of in-person with an accountant (26%) and narrowly trailing desktop (41%). 
• In it for the refund:  74% of Gen Z and 81% of Millennials say it is important for them to receive their refund as fast as possible. In fact, 46% of Gen Z and 55% of Millennials say they plan life events around receiving their refund.
• Creating a sense of accomplishment: 80% say they’ll feel proud of themselves after filing their taxes, and 65% say it’s a good reminder they’re contributing to society as a citizen. 

“It’s clear that many Americans - but particularly younger filers - view filing their taxes as a confusing, anxiety-inducing experience that’s painful to navigate. But it doesn’t have to be: this survey underscores the importance of giving consumers access to easy-to-use filing tools and educational resources that help take the stress out of tax season.” – Erika Carney, Product Lead for Cash App Taxes

About Cash App Taxes

Unlike other “free” commercial tax software offerings, Cash App Taxes will never charge users for filing their federal or state taxes; more than 10 million returns have been filed without charging anyone a penny, regardless of their tax situation. With Cash App Taxes, most people can file their taxes in minutes. Cash App Taxes offers Maximum Refund and Accurate Calculations Guarantees to ensure that filers get back every dollar they deserve. 

Cash App Taxes can also help customers estimate their refund for tax year 2023 before they file. By entering a few details about your household, income, and taxes paid filers can get a sense of what their refund might look like this year. 

To get started with Cash App Taxes, install Cash App on your phone first to log in. Once installed, users have the option to file their taxes from their phone or computer at cash.app/taxes.

Methodology

This sample of 1000 U.S. adults, aged 18 to 42, was surveyed on December 5 and 7, 2023. Sampling was calibrated to ensure an equal sample of both Gen Z adults (ages 18-26) and Millennials (ages 27-42), as well as a representative sample of male and female respondents. All respondents plan to file a federal tax return for 2023, confirmed by self-confirmation. DKC Analytics conducted and analyzed this survey with a sample procured using the Pollfish survey delivery platform, which delivers online surveys globally through mobile apps and the mobile web along with the desktop web. No post-stratification has been applied to the results.