Gen Z and Tax Season Anxiety: Navigating the April 15th Deadline

For many, the annual tax season is a source of stress and confusion. However, for Gen Z, this period can be particularly daunting. A recent CNET survey reveals that over half of Gen Z members experience anxiety related to filing their taxes. This generation faces unique challenges and concerns when it comes to understanding and completing their tax returns.

According to the survey, the primary anxieties among Gen Z filers include the fear of making mistakes (33%), concerns about the security of their personal information and the risk of scams (18%), and worries about owing more to the IRS than they can afford (15%).

Alyssa Melani, a 23-year-old, expressed her frustrations with the tax filing process. "It’s really intimidating, and every season I’m forever feeling like I don’t know what I’m doing," she told USA TODAY. Her sentiments echo the feelings of many young adults who are navigating the complexities of tax returns for the first time.

Despite the anxiety it induces, the April 15th deadline for filing federal tax returns is rapidly approaching. Missing this deadline can lead to late payment penalties and interest charges, unless an extension is requested. Lisa Greene-Lewis, a CPA and TurboTax expert, advises against procrastination. "The earlier the better," she said, emphasizing the importance of starting the process well in advance of the deadline.

Here are five essential things for Gen Z to know before the 2025 tax season concludes:

1. Potential for Tax Deductions and Credits:

Numerous tax deductions and credits are available that can significantly increase a filer’s refund. These deductions and credits effectively lower the amount of taxable income and the overall tax liability. For new filers, it’s important to research and understand which deductions and credits they might be eligible for.

2. Filing a Return Even When Not Required:

Even if the IRS doesn’t mandate filing a tax return because income is below a certain threshold, individuals may still benefit from filing. If an employer withheld any taxes from their paychecks, they are likely eligible for a refund. The IRS estimates that there is over $1 billion in unclaimed refunds waiting to be claimed.

A Talker Research survey, commissioned by TurboTax, found that a significant percentage of Gen Z, around 20%, mistakenly believe they don’t need to file taxes. This misconception stems from the belief that they are below the IRS income threshold. However, by not filing, they are potentially missing out on a substantial refund. Greene-Lewis emphasized that this generation is leaving money on the table by failing to file their taxes.

3. Common Mistakes to Avoid:

For the one-third of Gen Z filers concerned about making errors, paying close attention to details is critical. Greene-Lewis highlights that one of the most frequent and easily avoidable mistakes is incorrectly inputting a Social Security number. Such errors can lead to significant complications and delays in processing tax returns.

4. Understanding Tax Deductions and Credits:

Tax deductions can lower the amount of taxable income, while tax credits can directly reduce the amount of tax owed. Researching available deductions and credits can lead to substantial savings, potentially amounting to hundreds or even thousands of dollars. USA TODAY has compiled a list of common deductions and credits for new filers, making it easier for them to identify those they qualify for.

5. Dependency Status and Filing Requirements:

If an individual is living with a parent or guardian, or receiving financial assistance for tuition or living expenses, it is likely that their parent or guardian will claim them as a dependent on their tax returns. It’s essential to note this status on the individual’s tax return as well. According to IRS guidelines, a qualifying child must be under the age of 19, or under 24 if a full-time student. To qualify as a dependent, the individual cannot provide more than half of their own annual financial support.

If tax season feels overwhelming, Gen Z is not alone. Statistics show that approximately half of all taxpayers seek the assistance of a tax professional to file their returns. However, according to a 2021 IRS survey, Gen Z is the least likely generation to enlist professional help.

For those who choose to file on their own, resources like IRS Direct File can be invaluable. This program simplifies the tax return process and allows taxpayers in 25 participating states to file directly online, free of charge.

Many taxpayers, like Melani, also turn to family members for guidance. Others seek advice on social media platforms and even from AI chatbots, as indicated by the CNET survey. However, experts, including Greene-Lewis, caution against blindly trusting information found online. It’s crucial to verify any tax advice with reputable sources like the IRS website or qualified tax professionals.

In conclusion, tax season can be particularly stressful for Gen Z. Understanding filing requirements, taking advantage of available deductions and credits, and avoiding common mistakes are essential steps to navigate the process successfully. By utilizing available resources and seeking reliable advice, Gen Z can minimize anxiety and ensure accurate and timely tax filing.