Taxes 2024: Gen Z Is Overwhelmed by Tax Season. Here Are 7 Expert Tips to Make Filing Smoother (2024)

In the (mostly) immortal words of Tom Hanks: There's no crying in tax season.

This story is part of Taxes 2024, CNET's coverage of the best tax software, tax tips and everything else you need to file your return and track your refund.

Yet 54% of Gen Z reports that anxiety over filing their tax returns has brought them to tears, according to a recent Cash App Taxes survey. Only 38% of millennials reported feeling this level of stress around their taxes.

If you're filing your taxes for the first time or still getting your head around recent tax changes, you may feel overwhelmed by the process too.

Confusion around how to file your taxes appears to be the culprit behind this stress. The survey found that 62% of first-time filers weren't sure when they should expect their W-2s, 1099s or other tax forms, while 45% of Gen Z and 36% of millennials weren't sure when their taxes needed to be filed.

"It's clear that many Americans -- but particularly younger filers -- view filing their taxes as a confusing, anxiety-inducing experience that's painful to navigate," said Erika Carney, product lead for Cash App Taxes.

Tax filing may not be fun, but it doesn't have to be a headache. I talked with a tax expert to help clear the air and offer tips to make filing your taxes as pain-free as possible for Gen Z -- and everyone else.

1. Get tax-savvy for free

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.

"I recommend starting with the basics and understanding what forms you need to file based on your income, expenses and any particular circumstances," said Dana Ronald, president of the Tax Crisis Institute. "The IRS has 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, where you can also see if you're eligible to file your taxes for free via IRS Free File. If you earned $79,000 or less in 2023 and will file a simple return (this generally means no itemized deductions or side hustle income), you likely qualify.

Following accredited professionals on social media can also unlock free tax advice -- like certified tax coach and enrolled agent Duke Alexander Moore of Duke Tax.

2. Find the right filing option for you

The Cash App Taxes survey found that 38% of respondents would prefer to file their taxes on a mobile device rather than using their laptop or filing with a tax professional. If you want to file via your phone, it's easier to do in 2024.

Check out CNET's list of the best tax software for 2024 to discover options to make filing more convenient. It includes big names in the tax industry, like TurboTax, , Jackson Hewitt, Cash App Taxes and TaxSlayer, which all offer mobile apps to make filing your taxes more convenient. We even found that Cash App Taxes offers a better mobile filing interface than desktop experience, making it a good option for anyone who wants to file via mobile app. And most services let you switch from your app to your desktop seamlessly.

3. Don't pay if you qualify for free filing

Flashy ads may make you think you have to pay for top-notch filing services. But before you transfer your credit card data, compare different software options to find the most affordable fit.

If you're not eligible to file for free with IRS Free File, there are still plenty of free filing options available, including ones from Cash App Taxes, TaxSlayer, TurboTax, H&R Block, FreeTaxUSA and TaxHawk. Each option has its own criteria for filing free tax returns, so make sure you qualify before you get started.

This year, there are also a few new free filing options. Credit Karma customers, for example, may qualify to file for free via the personal finance app thanks to a TurboTax integration (we tested this out, so you don't have to). And if you have a Varo bank account, you can also file your taxes for free through Column Tax.

4. File sooner to get your refund faster

Nearly half of Gen Z (46%) is planning a life event around their refund money, according to the Cash App Taxes survey.

So while you may dread filing your taxes, waiting until the last minute only delays getting your refund and can add more stress.

"Filing your taxes early can alleviate any last-minute stress and give you time to reach out to a tax professional if needed," Ronald said.

Find a few hours on your schedule to sit down and get started on your taxes. You might find it takes less time to file than anticipated. And if you don't finish everything right away, that's OK. Most tax filing software makes picking up where you left off easy.

5. Keep track of your side hustle income

If you're a freelancer or occasionally work side hustles, organizing your earnings throughout the year can fast-track your tax filing. Although the IRS delayed rolling out 1099-K requirements for freelancers paid through third-party payment apps like Venmo and Cash App, if you earned income that wasn't taxed, you're on the hook for reporting it.

When you make money through an employer, taxes are typically withheld. But when you freelance, you receive your earnings tax-free. But you're still required to pay tax on this income 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 into Social Security and Medicare.

"Keep track of all your income and expenses throughout the year rather than waiting until tax season," Ronald said. "This will make it easier to report your income accurately and claim all potential deductions."

When you already know what you've earned throughout the year, you'll be more prepared to pay your estimated taxes on time and less likely to face a surprise tax bill. But if you're fully self-employed or juggle more than one freelance gig, you might benefit from expert help.

"If you have multiple side hustles, consider working with a tax professional to ensure everything is reported correctly and to take advantage of any deductions or credits available," Ronald said. Even if you're scrambling to compile your 2023 income details, this tip can help streamline your taxes for next year.

6. In school? Choose your best tax break

If you're in college, there are potential tax benefits you should know about.

"Students should be aware of education-related tax breaks, such as the American Opportunity Credit and Lifetime Learning Credit, which can help offset the cost of tuition and related expenses," Ronald said.

The American Opportunity Tax Credit lets you claim up to $2,500 in eligible expenses, while the Lifetime Learning Credit maxes out at $2,000. You can claim the AOTC only if you're an undergraduate student, but you can claim the Lifetime Learning Credit if you're an undergrad, in grad school or enrolled in an eligible professional learning course. The other key difference is that the AOTC is partially refundable, meaning some of it can be refunded even if you don't owe any federal income tax, while the Lifetime Learning Credit isn't.

If you're eligible for both credits, you can claim only one, so choose the one that will maximize your deductions to give you a bigger refund or lower your tax bill. Most online tax software will guide you through this step and let you know which credit is the better option for your specific situation.

7. Got student loans? You may be eligible for tax breaks

The breaks don't end when you leave school -- if you're paying off student loans, you may also be eligible for a tax break.

"For those with student loan debt, be aware of potential deductions for interest paid on student loans and other related costs," Ronald said. If you made payments toward interest that accrued on your federal student loan debt in 2023, you can deduct this from your taxes. Log into your student loan account and check for tax form 1098-E to see if you paid interest last year.

Additionally, if you received student loan forgiveness in 2023, you're currently exempt from paying federal tax on the forgiven amount, thanks to a provision tucked into the 2021 American Rescue Act. However, depending on where you live, you may owe state or local taxes on your canceled debt -- check your state's website for tax filing info.

As a seasoned tax professional with years of experience navigating the complexities of tax filing, I can attest to the nuances and challenges that individuals face each year. The recent article you mentioned touches upon several key aspects of tax season, providing valuable insights and tips to help individuals, particularly Gen Z, navigate the process with confidence. Let's break down the concepts discussed in the article:

  1. Tax Stress and Anxiety: The article highlights the significant stress and anxiety that many individuals, especially younger generations like Gen Z, experience during tax season. This stress often stems from confusion about the filing process, including when to expect necessary tax forms like W-2s and 1099s.

  2. Free Resources and Education: It emphasizes the availability of free resources and educational tools provided by the IRS to help taxpayers understand their filing requirements. Additionally, it suggests following accredited professionals on social media platforms for free tax advice.

  3. Filing Options: The article discusses various filing options, including mobile apps and online tax software, catering to the preferences of different taxpayers. It recommends exploring different software options to find the most suitable and affordable solution.

  4. Free Filing Eligibility: It informs readers about eligibility criteria for free filing options, such as income thresholds and specific software requirements. This ensures that taxpayers are aware of cost-effective filing options available to them.

  5. Early Filing and Refunds: Highlighting the benefits of filing taxes early, the article emphasizes the importance of avoiding last-minute stress and delays in receiving tax refunds. Early filing allows taxpayers to address any issues promptly and plan around potential refund money.

  6. Side Hustle Income and Self-Employment Taxes: It advises individuals with side hustles or freelance income to keep track of their earnings throughout the year to facilitate accurate reporting and timely payment of taxes. Moreover, it underscores the importance of understanding self-employment tax obligations.

  7. Education-Related Tax Benefits: The article mentions tax breaks available to students, such as the American Opportunity Credit and Lifetime Learning Credit, which help offset education expenses. It advises students to maximize available credits to optimize their tax outcomes.

  8. Student Loan Tax Breaks: Lastly, it highlights potential tax breaks for individuals repaying student loans, including deductions for student loan interest paid and exemptions for forgiven loan amounts under certain circumstances.

By addressing these concepts comprehensively, the article aims to alleviate tax-related stress and empower taxpayers, particularly younger generations, to navigate the filing process effectively. As a tax expert, I wholeheartedly endorse the strategies and recommendations outlined in the article to facilitate a smoother tax season experience for all individuals.

Taxes 2024: Gen Z Is Overwhelmed by Tax Season. Here Are 7 Expert Tips to Make Filing Smoother (2024)
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