Tax Season 2024: Why Gen Z Finds Tax Filing So Stressful?

Filing taxes can be stressful for anyone, but a recent survey shows it’s particularly tough for Gen Z. The survey found that over half of Gen Z respondents (54%) have cried over filing their taxes. Even though they’re the most stressed group, they’re not alone – 38% of millennials also reported feeling overwhelmed by tax season.

Many young people, including 33% of Gen Z, would even give up social media entirely to avoid tax filing. This shows just how confusing and anxiety-inducing the process can be.

Tax filing can be stressful for anyone, but a recent survey shows it's particularly tough for Gen Z.
Discover why Tax Season 2024 is causing stress among Gen Z as they navigate the complexities of tax filing for free.

Whether you’re a first-time filer or a seasoned veteran, tax season can feel overwhelming. But don’t worry, our tax advisors are here to help you. We have charted out some tips and tricks to make filing your taxes as smooth and painless as possible. Stay tuned for actionable advice and ways to conquer this tax season with the breeze.

1. Get Free Tax Resources

Tax Filing doesn’t have to be expensive. You can find free resources to help you file your taxes correctly and on time.

Start with the basics: Figure out which forms you need to file based on your income, expenses, and any special circumstances.
Check the IRS website: They offer free resources, including guides, publications, and workshops.
See if you qualify for free filing: The IRS Free File program allows qualifying individuals to file their taxes for free online. You may qualify if your income was $79,000 or below in 2023 and your tax situation is simple.
Follow tax professionals on social media: Some, like Duke Alexander Moore, offer free tax advice online.

2. Choose Easier Tax Filing Option

Many people prefer filing taxes on their phone instead of a laptop or with a professional. In 2024, filing via phone is easier. You can also use top tax filing software for easy filing in 2024. TurboTax, H&R Block, Jackson Hewitt, Cash App Taxes, and TaxSlayer are some of the best tax software. They all offer mobile apps for easier filing. Cash App Taxes has a better mobile interface than a desktop, making it great for mobile filing. Most services allow seamless switching between app and desktop.

3. Save Money on Tax Filing: Explore Free Options

Many people think they need to pay for tax filing services, but that’s not always true/ Before you spend any money, check what options are available to you for tax filing for free.

The IRS Free File program offers free tax filing software to many taxpayers. Even if you don’t qualify for Free File, there are other tax filing free options available, including services from well-known companies like Cash App Taxes, TaxSlayer, and TurboTax. Each company has its eligibility requirements, so be sure to check those before you start.

There are even some new free options available this year. For example, Credit Karma customers can potentially file for free through the app thanks to their collaboration with TurboTax. And if you have a Varo bank account, you can also file your taxes for free through Column Tax.

So, don’t waste your money on tax filing services if you don’t have to. There are plenty of tax filing for free options available to help you file your taxes quickly and easily.

4. File Your Taxes Early to Get Your Refund Faster

Many people wait until the last minute to file their taxes, but this can delay your refund and create unnecessary stress. This section explains how filing your taxes early can benefit you.

Faster Refunds: By filing early, you get your refund sooner rather than later. This can be especially helpful if you’re expecting a large refund and have plans for the money.
Reduced Stress: Filing early gives you more time to gather your documents and complete the process, reducing last-minute stress and anxiety.
Flexibility: If you need help from a tax professional, filing early allows more time to find and schedule an appointment.
Easy to Manage: Most tax filing software allows you to save your progress and come back later. This makes the process even more manageable, especially if you don’t have time to complete everything in one sitting.

So, don’t wait until the last minute! Take some time now to file your taxes and avoid the stress of a looming deadline. You can also use a tax return calculator.

5. Stay Organized for Easier Taxes with Side Hustle Income

If you are a freelancer or do occasional side hustles, keeping track of your earnings throughout the year can save you a lot of stress come tax season. While the tax rules for third-party payment apps haven’t changed yet, you are still responsible for reporting any income you earn, even if taxes weren’t taken out.

Unlike regular jobs where taxes are automatically deducted, you will need to pay estimated taxes quarterly on your freelance income. This includes an additional 15.3% self-employment tax for Social Security and Medicare.

So what can be done, well here is the key takeaway –

Track your income and expenses all year long, not just at tax time. This makes it easier to report everything accurately and claim any deductions you might qualify for.

Knowing your income throughout the year helps you pay estimated taxes on time, avoiding any surprise tax bills later. If you have multiple side hustles, consider consulting a tax professional to ensure everything is reported correctly and you benefit from all available deductions and credits.

Even if you’re struggling with your 2023 taxes, getting organized now will make things much easier for you next year.

6. Tax Breaks for College Students

College can be expensive, but there’s good news. You might qualify for tax credits that can help you save money on your education. These credits are called the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).

Here’s a quick breakdown:

AOTC: This credit is worth up to $2,500 for undergraduate students only. It’s partially refundable, meaning you can get some money back even if you don’t owe any taxes.
LLC: This credit is worth up to $2,000 per year and can be used by undergraduate, graduate, and professional students. However, it’s not refundable.

Which credit is right for you?

You can only claim one credit at a time, but most tax software can help you choose the one that will save you the most money. So, don’t let tax breaks pass you by – explore your options and see if you can save some cash on your college expenses. Use a tax return calculator to evaluate your cash in a better way.

7. Saving Money on Your Student Loans

Even after graduation, there are ways to save money on your student loans. The good news is you might be eligible for tax breaks to help ease the burden of your debt.

Here’s a breakdown of two tax benefits that could be available to you:

Deducting Student Loan Interest: If you paid interest on your federal student loans in 2023, you can deduct this amount from your taxes. This means it lowers your taxable income, potentially reducing your overall tax bill.
Tax-Free Student Loan Forgiveness: If you received student loan forgiveness in 2023, you won’t have to pay federal taxes on the forgiven amount. This is thanks to a special provision in the American Rescue Act.

Remember, this information only applies to federal taxes. You may still owe state or local taxes on your forgiven debt. Be sure to check your state’s website for specific tax filing information.

Bottom Line

Filing taxes can be stressful, but with these tips, you can conquer tax season with confidence. If you need extra support, consider seeking professional guidance from a trusted tax advisor like John Geantasion CPA LLC. We offer comprehensive tax, CFO, and accounting services to help individuals and businesses navigate the complexities of the financial landscape. Book your call today and let us help you achieve financial success.

Frequently Asked Questions (FAQs)

Ques. Who needs to file a tax return 1040 form?

Ans. Individuals with various types of income, including wages, self-employment earnings, interest, dividends, capital gains, and other taxable income, typically file Form 1040 for their annual tax return.

Ques. How does my tax filing status affect my tax liability?

Ans. Your tax filing status, such as single, married filing jointly, married filing separately, head of household, or qualifying widow(er), determines your tax rates, deductions, and credits, ultimately impacting your tax liability.

Ques. What is the current tax filing deadline?

Ans. The tax filing deadline is typically April 15th of each year unless it falls on a weekend or holiday, in which case it may be extended. However, it’s always best to verify the current deadline with the IRS or a tax professional.

Ques. When can I expect to receive my tax refund?

Ans. Generally, if you file your tax return electronically and choose direct deposit, you can expect to receive your refund within a few weeks. However, exact timing may vary depending on factors such as IRS processing times and any issues with your return.

Ques. Do I need to file a separate tax return if I receive a K-1 form?

Ans. Yes, if you receive a Schedule K-1 (Form 1065) from a partnership, S corporation, estate, or trust, you typically need to report the income, deductions, and credits shown on the K-1 on your individual tax return (Form 1040).

Ques. What information should I provide to a tax filing service?

Ans. You should provide your personal information, including Social Security number, income documents such as W-2s and 1099s, deduction and credit information, and any other relevant financial documents.

Ques. When can I expect to receive my tax refund for 2023?

Ans. Refund processing times can vary, but if you file electronically and there are no issues with your return, you can generally expect to receive your refund within a few weeks after filing.

Ques. Do I need to file a separate tax return for my LLC?

Ans. It depends on how your LLC is taxed. A single-member LLC is typically treated as a disregarded entity for tax purposes, and its income is reported on the owner’s individual tax return. Multi-member LLCs are generally treated as partnerships and file a separate tax return (Form 1065).

Ques. What tax form should I use to file taxes for my LLC?

Ans. Multi-member LLCs typically file Form 1065, U.S. Return of Partnership Income, to report their income, deductions, and credits. Single-member LLCs usually report their business income on Schedule C of their individual tax return (Form 1040).

Ques. How do I file for a tax extension in California?

Ans. In California, you can request a state tax extension using Form FTB 3519, Payment for Automatic Extension for Individuals. This form allows you to extend your filing deadline to October 15th. However, it’s essential to pay any estimated taxes owed by the original due date to avoid penalties and interest.

Ques. Who can benefit from taking a tax filing class?

Ans. Anyone who wants to improve their understanding of tax laws, deductions, credits, and filing requirements can benefit from taking a tax filing class. This includes individuals, business owners, and those interested in pursuing a career in accounting or finance.

Ques. What are the penalties for filing taxes late or incorrectly?

Ans. Penalties for late filing or incorrect tax returns may include fines, interest on unpaid taxes, and other financial consequences. The severity of the penalties depends on factors such as the amount of tax owed, the reason for the delay or error, and whether the mistake was intentional.

Ques. Can I file my taxes electronically?

Ans. Yes, you can file your taxes electronically using tax preparation software approved by the IRS or by using the IRS Free File system. Electronic filing is convenient, secure, and often results in faster processing and refunds compared to paper filing.