As Tom Hanks' (almost) immortal words say, there's no crying during tax season.
However, according to a recent Cash App Taxes survey, 54% of Gen Zers reported that the anxiety of filing a tax return has brought them to tears. Only 38% of Millennials reported feeling this level of stress about taxes.
If you're filing taxes for the first time, or if you're not yet familiar with recent tax changes, the process can be overwhelming.
surrounding confusion how Filing taxes seems to be the cause of this stress. Research shows that 62% of first-time filers aren't sure when they need to file a W-2, 1099, or other tax return, compared to 45% of Gen Z and Millennials. We found that 36% of the generation are unsure about when they need to pay taxes. Submitted.
“Many Americans, especially younger filers, believe that filing taxes is a confusing, anxiety-inducing, and painful experience to deal with,” said Erica Carney, product lead for Cash App Taxes. It's clear that there are.”
Filing your taxes may not be fun, but it doesn't have to be a headache. I spoke to tax experts to ease fears and provide tips for making tax filing as painless as possible for Gen Zers and everyone else.
1. Get free tax knowledge
You don't have to pay someone to learn how to file your taxes correctly. There are free resources available online to help you get started.
“We recommend starting with the basics and understanding what documentation you need to submit based on your income, expenses, and specific circumstances,” says Dana, director of the Tax Crisis Institute. says Ronald. “The IRS provides free resources for taxpayers of all ages, including online tools, publications, and workshops.”
You can find helpful guides on how to file on the IRS website. You can also see if you're eligible to file your taxes for free through IRS Free File. If you earned $79,000 or less in 2023 and file a simple return (which typically means no itemized deductions or side hustle income), you may qualify.
Get free tax advice by following certified professionals on social media, like Duke Alexander Moore, a certified tax coach and registered agent with Duke Tax.
2. Find the filing option that's right for you
A study by Cash App Taxes found that 38% of respondents would prefer to file taxes on a mobile device rather than using a laptop or filing with a tax professional. If you want to apply from your mobile phone, it will be easier to do so in 2024.
Check out CNET's list of the Best Tax Software of 2024 to discover options to make filing more convenient. This includes tax industry giants like TurboTax, H&R Block, Jackson Hewitt, Cash App Taxes, and TaxSlayer, all of which offer mobile apps to make filing your taxes more convenient. We also found that Cash App Taxes offers a better mobile filing interface than the desktop experience and is a good option for those who prefer to file via a mobile app. Most services also allow you to seamlessly switch from app to desktop.
3. Don't pay if you qualify for free application
Flashy ads may make you think you have to pay for a top-notch filing service. However, before transferring your credit card data, compare different software options to find the most affordable one.
Even if you're not eligible to file for free using IRS Free File, there are many free filing options available to you, including Cash App Taxes, TaxSlayer, TurboTax, H&R Block, FreeTaxUSA, and TaxHawk. Each option has its own criteria for filing a free tax return, so make sure you meet the criteria before getting started.
There are also some new free filing options this year. For example, Credit Karma customers may be able to file for free through their personal finance app through TurboTax integration (we've tested this, so you don't have to). If you have a Varo bank account, you can also file your taxes for free through Column Tax.
4. Apply early to get your refund faster
According to a study by Cash App Taxes, nearly half (46%) of Gen Zers plan their life events around their tax refund.
So, while you may be scared to file your taxes, waiting until the last minute will only delay your refund, which can cause even more stress.
“Filing your taxes early can reduce last-minute stress and give you time to consult a tax professional if needed,” Ronald says.
Find a few hours in your schedule, sit down, and start doing your taxes. You may find that it takes less time to submit than you expected. It's okay if you don't finish everything right away. Most tax preparation software allows you to easily pick up where you left off.
5. Track your side hustle income
If you're a freelancer or have an occasional side hustle, organizing your income throughout the year can help you file your tax return faster. The IRS has delayed rolling out her 1099-K requirements for freelancers paid through third-party payment apps like Venmo and Cash App, but if you earn untaxed income, you must report it .
If you earn money through an employer, taxes are usually withheld. However, when you become a freelancer, your income is tax-free. However, taxes on this income must be paid throughout the year in the form of quarterly estimated tax payments. The IRS also imposes a 15.3% self-employment tax on this income to pay for Social Security and Medicare.
“Track all your income and expenses throughout the year instead of waiting until tax season,” Ronald said. “This makes it easier to accurately report income and claim all potential deductions.”
If you already know how much you earn throughout the year, you'll be better prepared to pay your taxes on time and less likely to face an unexpected tax bill. However, if you're completely self-employed or juggling multiple freelance jobs, you may benefit from professional help.
“If you have multiple side jobs, consider working with a tax professional to ensure everything is reported correctly and to take advantage of available deductions and deductions,” Ronald he said. Even if you're in a hurry to put together your 2023 income details, these tips will help you streamline your taxes next year.
6. At school? Choose the best tax relief
If you are a college student, you should know that there may be tax benefits available.
“Students should be aware of education-related tax breaks, such as the American Opportunity Credit and the Lifelong Learning Credit, which can help offset tuition and related expenses,” Ronald said.
The American Opportunity Tax Credit allows you to claim up to $2,500 in eligible expenses, while the Lifelong Learning Credit is capped at $2,000. AOTC can only be claimed if you are an undergraduate student, whereas continuing learning credits can be claimed by undergraduate students, graduate students, or if you are enrolled in an eligible professional studies course. Another important difference is that AOTC is partially refundable. This means that even if you don't owe federal income taxes, you'll get a partial refund, but the Lifelong Learning Credit is not.
If you're eligible for both credits, you can only claim one, so choose the one that maximizes your deduction to get a bigger refund or reduce your tax bill. Most online tax software will guide you through this step and indicate which credits are better options for your particular situation.
7. Do you have student loans? You may be eligible for tax relief
Vacation does not end when you leave school. If you are paying off student loans, you may also qualify for tax relief.
“Those with student loan debt should note that student loan interest and other related costs may be deductible,” Ronald said. If you pay interest accrued on your federal student loan debt in 2023, you can deduct it from your taxes. Log into your student loan account and check your tax form 1098-E to see if you paid interest last year.
Additionally, thanks to provisions included in the American Rescue Act of 2021, if you receive student loan forgiveness in 2023, you will now be exempt from paying federal taxes on the amount forgiven. However, depending on where you live, you may be required to pay state or local taxes on the canceled debt. Check his state's website for tax filing information.