As IRS Opens, Taxpayers Stressed Over Filing but Thinking About Refunds
TaxSlayer poll finds 57% of Americans are not confident in their understanding of the U.S. tax code
AUGUSTA, Ga., Jan. 29, 2018 /PRNewswire/ -- As tax season officially opens and millions of Americans begin filing their returns with the IRS today, TaxSlayer is releasing its annual American Tax IQ survey, analyzing how over 2,000 Americans are approaching their taxes, planning to spend their refunds and how they view the upcoming tax code changes.
It's no surprise that the majority (52 percent) of taxpayers agree that the filing process is stressful. When asked to name the most difficult part of the tax process, taxpayers cited (1) gathering many documents, (2) understanding tax laws, and (3) the stress of not knowing if the results are correct. In fact, nearly six in ten Americans (57 percent) are not confident in their understanding of the U.S. tax code.
"Most taxpayers have very mixed feelings about tax season," said Mark Kohler, CPA, J.D., Senior Tax Advisor at TaxSlayer. "They're looking forward to their refunds, but are nervous about filing. However, tax season doesn't have to be as stressful or difficult as many people think, especially if you work with an online tax platform that guides you through the filing process, provides in-depth educational resources, easily accessible specialists to answer questions and guarantees 100% accuracy. We want to ensure taxpayers have a stress-free filing experience on the path to the maximum refund."
ReFUNd Spending
Taxpayers are divided on how they plan to spend their refunds in 2018. Many are looking to pay off debts or bulk up their savings and retirement accounts. But plenty of others see refund season as a chance to splurge on jewelry or electronics, or an experience like a vacation.
Millennials are more likely to save their money, while those 35 and over are more likely to pay off debts. Meanwhile, all age groups agree a refund is an opportunity to treat yourself to a nice personal gift or vacation.
|
Please imagine you got a tax refund in 2018.Which of the following would you do with your tax refund? Please select all that apply. |
All taxpayers |
18-34 |
35-54 |
55+ |
|
Pay off debts (e.g., student loan, credit card, etc.) |
42% |
39% |
53% |
53% |
|
Put it in a savings account |
43% |
47% |
36% |
36% |
|
Put it in a retirement account (e.g., 401(k), IRA, etc.) |
9% |
13% |
7% |
7% |
|
Treat myself to a gift (e.g., electronics, jewelry, etc.) |
13% |
17% |
17% |
17% |
|
Treat myself to an experience (e.g., dinner, vacation, etc.) |
13% |
15% |
14% |
14% |
The Filing Process
Regarding how taxpayers typically file their taxes, 39 percent use an online tax platform with more than half (55 percent) of these users spending less than $100 on the cost of filing. Additional data suggests peace of mind can certainly be found in online platforms, with 92 percent of those who file online expressing confidence that they will receive the maximum refund possible.
"I highly encourage taxpayers not to delay getting started on filing their returns," added Kohler. "Waiting until April can increase stress and possibly lead to fees from the IRS. By starting your return today, you'll have more time to gather all the documents needed, speak with qualified experts to ensure confidence in the return you file and most importantly, get your refund sooner."
Only 18 percent of taxpayers typically file in January, with most Americans completing in February (35 percent) and March (23 percent). Eighteen percent file in April or later, with those folks who file during the week of April 15th or later stating the main reason why as a (1) natural tendency to procrastinate (28 percent), (2) it takes a long time to prepare and file taxes (20 percent), and (3) it's a stressful process (10 percent). Surprisingly, those aged 55 and up wait the longest to file their taxes. Almost half of this age group (49 percent) files in March or later.
Changing Tax Laws
In 2018, the U.S. tax code will see its most significant update in over 30 years, due to the recently passed tax bill. When asked about personal sentiment toward the tax bill late last year, taxpayers were mostly split down the middle, with 29 percent expecting it to be beneficial and 31 percent harmful.
"Most Americans will see a benefit from the new tax code with the doubling of the child tax credit and the standard deductions," said Kohler. "It's important that taxpayers use a service like TaxSlayer, that will keep them informed about these changes."
Separately, when asked about whether they are paying too much or too little in taxes:
- Nearly half (49 percent) of taxpayers believe they are paying too much;
- 36 percent believe they are paying just the right amount and;
- Only seven percent believe they are paying too little.
- This can vary per age group with only 34 percent of millennials between the age group of 18 and 34 believing they pay too much in taxes, 15 percent lower than the general group.
However, if taxpayers were to owe money to the IRS in 2018, 27 percent express a lack of confidence in being able to pay back any money owed. In 2018, taxpayers should lean on their tax filing platform for education and updates on the new tax code to get their maximum refund or reduce the amount owed.
TaxSlayer research also indicated that many Americans fear making a mistake or being audited by the IRS. Online tax services can help alleviate this anxiety with accuracy guarantees, step-by-step instructions, and products to assist the customer in the case of an IRS audit or inquiry. "I would recommend these services to anyone who is stressed about their taxes," said Kohler. "It can really give them peace of mind this tax season."
About TaxSlayer
TaxSlayer makes life simpler and less stressful for millions of Americans with exceptional, easy-to-use technology. Trusted for over 50 years, TaxSlayer saves business owners, tax professionals and individual consumers time and money with high-quality, high-value financial products. In addition to offering the top-rated tax preparation software, support, and tools, TaxSlayer's products are radically transforming the legal, bookkeeping, and HR/payroll arenas, helping small business owners better serve their customers.
The company successfully completed more than 10 million state and federal e-filed tax returns in 2017, representing a 200% increase over the past three years. TaxSlayer's software was ranked #1 for five straight years in numerous categories, including overall satisfaction by the National Association of Tax Professionals (NATP).
Methodology
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2388 adults, of whom 2049 file taxes. Fieldwork was undertaken between 21st - 22nd November 2017. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).
Media Contacts
Kayla Retzler
212-279-3115 x270
kretzler@prosek.com