Each year, as April 15 approaches, a growing number of young adults report feeling overwhelmed by the tax filing process.
Where do I find the forms? How do I fill them out? What happens if I make a mistake?
These are all questions that may run through someone’s mind when they are filing for the first time. This can lead to people relying on someone else to help them or even avoiding filing entirely.
According to a TurboTax survey, nearly 50% of surveyed Americans said they either dislike or hate filing their taxes. And 54% of 18-24-year-olds do not even know when the tax filing deadline is.
For the longest time, financial literacy was not taught in schools. Florida passed the Dorothy L. Hukill Financial Literacy Act in 2022, which requires students entering ninth grade in the 2023-24 school year and later to earn one-half credit in personal financial literacy and money management to graduate.
However, this applies to the graduating class of 2027 and beyond, meaning it didn’t apply to much of Generation Z, leaving them without the knowledge.
When asked if she felt her schooling prepared her to understand taxes, University of Florida sophomore Kate Franklin said, “not at all.”
“I was never taught financial literacy,” she added.
For her, the most confusing part about filing her taxes is where to even start and find the documents.
When asked what would make her feel more confident about the filing process, she said, “If I knew where to start.”
Despite having had three jobs, she relies on her mother and the family accountant to file her taxes and has no clue what the actual process is like.
For UF sophomore Sophie Flynt, it is the opposite. She learned how to file her taxes in 2020 after her parents taught her.
“I had my parents walk through it step by step with me as I did it myself,” she said. This made it easier for her to understand the process, she said.
She now uses an accountant, which she said makes the process easier.
She said the most confusing part is making sure she gets everything right because she is scared to make a mistake.
“It just feels like something really important,” she said. “It’s related to the federal government.”
The most common errors made on tax returns across all generations are math errors, missing documents or claiming incorrect deductions.
Paper returns also see a higher percentage of errors, about 21%, compared with less than 1% for e-filed returns.
Lauren Otradovec is a tax partner who specializes in private equity portfolio companies at RSM US LLP. She attributes this gap in knowledge to the fact that financial literacy isn’t taught in schools.
“You don’t learn the basics unless you are an accounting major,” she said. “People don’t understand and only see what is in the news and what they find online instead of really digging into it and learning about it.”
She doesn't think filing a personal tax return should be something that requires a degree.
“There’s a lot of stuff out there that scares the younger generation,” she said. “Because they don’t have that background and have learned it before, it’s all new and scary in the beginning.”
The most common mistakes she sees in young filers are that they don’t realize all of the different things that should be reported on a tax return.
“People just think, ‘I just put my W-2 in, and I’m done,’” she said. But in reality, filers also have to report if their bank account or checking account gets interest income.
“Your tax return is the full picture of the income that you’ve earned,” Otradovec said.
Something that can complicate filing for college students is the multiple jobs or internships they may have.
She has had students call her and tell her, “I did my return for the first job. How do I do my tax return for the second job?”
“And I’m like, well, problem No. 1 is you only have one tax return,” she said. The important part then becomes making sure all income is included in the one return.
She said it is also important to know the type of expenses that apply to certain types of income. That way, when students work side jobs, they can report it properly.
But the question of “why do I need to know how to file my taxes when I can pay someone else to do it for me?” still stands.
“Everybody should have the basic knowledge,” Otradovec said. “Even if you paid someone else to prepare the tax return, you are still required to sign it.”
“By signing it, you’re saying it's complete and accurate to the best of your knowledge,” she said. “So by you signing it, you should understand that that is a true statement.”
To give them the basic knowledge, she would like to see a short workshop that teaches the basics.
Since there are many caveats to tax filing, she would like the class to be given a W-2, and then everyone walks through and prepares the tax return together.
“I would love to see something like that being done in school so that they could take it and put it in a tax software,” she said.
Filing a tax return isn’t meant to be complicated. The only gap between feeling overwhelmed and confident is access to knowledge.
With more than 150 tax software programs available, it has become increasingly easy to prepare, calculate and file income tax returns accurately.