Bay Area Estate And Tax Planning Law Firm

Millennials often face more complicated taxes than their parents

On Behalf of | Apr 1, 2016 | Uncategorized |

If you are young and feel completely in the dark about taxes, you are not alone. Each generation struggles to become financially literate once they leave school and enter the workforce. And as time goes on, the U.S. tax code becomes ever longer and more complicated.

According to a recent survey, fear of taxes is especially prominent among millennials, defined as those who are currently 18 to 34 years old. Some 80 percent of survey respondents in this age group fear making a tax mistake that could get them into trouble with the IRS.

Some older Americans may explain this fear by saying that millennials have been “coddled” and “haven’t learned how to be grown-ups,” but the reality is more nuanced than that. Among older generations, the majority of taxpayers have always worked in traditional jobs where employers automatically withhold taxes and employees receive a W2 tax form each January. In such cases, tax liabilities are fairly straightforward.

In contrast, millennials have grown up in the “gig economy,” where income is gathered from a number of different sources and workers are likely to be classified as independent contractors. Something as basic as driving part-time for Uber can significantly complicate the tax process.

Millennials may also be more afraid of tax mistakes because it is now more difficult than ever to get help from IRS representatives. In recent years, the IRS has faced huge reductions in staff due to budget cuts. People who call the agency to ask questions may need to wait a total of four or five hours on the phone just to speak to another human being.

Younger adults have many legitimate reasons to feel frustrated and overwhelmed by their tax obligations. But at the end of the day, these obligations need to be met. If you are looking for help filing your taxes, please consider hiring a certified public accountant. And if you need assistance dealing with an IRS audit or problem related to tax debt, please discuss your case with an experienced tax law attorney.