March 21, 2023
Young Americans reveal this year’s tax season is causing them significant stress as they continue to cope with the cost-of-living crisis
Trustpilot’s latest report unveils what is causing Gen Z and Millennial tax filers stress this 2023 tax season
March 21, 2023, New York, USA – More than half (64 percent) of Gen Z and Millennials (ages 18-41) in the US say this year’s tax season is causing them significant levels of stress and anxiety as they continue to cope with the pressures of the cost-of-living crisis. New research from the online reviews platform, Trustpilot, has revealed young Americans, who are already under immense financial stress, are worried about making ends meet the month they file taxes (18 percent), as well as worrying the IRS is going to crack down harder on filing mistakes (14 percent) and finding money to file taxes (12 percent).
It comes as nearly three-quarters (74 percent) of young American tax filers admit to being uncertain in their tax filing abilities. Conducted with third-party research firm YouGov, data also shows how they plan to re-prioritize their tax refunds if they were to decrease from the previous year, as speculated by the IRS.
Filing taxes in the United States is often nerve wracking for young adults who are unsure of how the system works, which rings true with only 36 percent of American Gen Zs and Millennials noting they are able to accurately file their own taxes without any error. That said, nearly 2 in 5 tax filers in these generations (39 percent) said they are uncertain about their tax filing abilities because the tax filing system in the U.S. is too complicated.
This was followed by more than 1 in 5 (21 percent) filers not having time to learn the tax filing system and another 15 percent who simply don’t know who to ask for help. To add, while nearly 3 in 10 total Gen Zs and Millennials (27 percent) are confident about their tax filing abilities, they’re also afraid mistakes will be made that will get them in trouble with the government.
Tax refunds will make or break younger generations:
According to American Gen Z and Millennials who file their taxes, roughly two thirds (66 percent) would make lifestyle/budgetary changes if the IRS decreased their tax refund by as little as 5% compared to last year. If they were to receive a smaller refund than the previous year, and it forced them to sacrifice one part of their spending, the number one area they would sacrifice would be luxury items such as jewelry, designer clothes or beauty at nearly 1 in 5 (18 percent). More than 1 in 10 (12 percent) would sacrifice travel followed by top shelf liquor or dining out (1 in 10) and streaming subscriptions (1 in 10).
Many filers have already dipped into their expected tax refund with 1 in 10 reporting they have already spent the money they expect to get back.
“Financial stress has taken a toll on everyone this year, as inflation continues to affect how people approach their household spending,” said Mieke De Schepper, Chief Commercial Officer at Trustpilot. “This has been especially taxing for young individuals as they navigate their financial future, and it’s clear that this year’s tax season in the U.S. is only adding to that stress, as young Americans work through the filing process, as well as the financial burden that comes with it. It’s important that consumers feel they can turn to someone, or an independent platform, that can help them navigate the stressful process of tax returns. It’s about the concept of trust, and Trustpilot can help consumers find businesses that can demonstrate that they are trusted by other people who are going through the same experience”.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 999 Gen Z and Millennial adults, among whom 862 file their taxes. Fieldwork was undertaken between 6th - 8th March 2023. The survey was carried out online. The figures have been weighted and are representative of all US adults between the age of 18-41 years old.
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