Tax trends and myths

The Street

A new survey has revealed some surprising misconceptions that Americans have about filing taxes. Lisa Greene-Lewis, CPA and TurboTax expert, explains.

Transcript

00:00It's tax season, and TurboTax, not surprisingly, has dug into the numbers and got some great

00:10research from it for us all. Lisa Green Lewis, CPA, TurboTax expert, is here to give us all

00:15the details on what they found. I love a good survey, Lisa, so I'm really curious to know

00:20what you guys found. So first, tell us what exactly was the survey about?

00:26So we conducted a survey, and it was conducted by Talker Research, and we surveyed 4,000

00:32Americans, and it was all about misconceptions that Americans have about filing taxes.

00:41It's funny, right? Because everyone is so frightened to death of filing their tax returns.

00:45So what was the result? What did it reveal? Yeah, so we found, across generations, various

00:52misconceptions. The first one, 20% of Gen Z believe that students don't need to file

00:58taxes, and 27% of boomers believe that if you don't make the IRS threshold, that you

01:06don't need to file and you can't get a refund. And then 13% of Gen Z believe that if you're

01:13paid cash, that you don't need to file your taxes. Also, we found that 17% of Gen Z believe

01:22that you can write off anything as a business expense. And then 40% of all of the respondents

01:30were not able to correctly match what the earned income tax credit was.

01:35Wait, so why does Gen Z believe they can write off anything?

01:42I'm not sure, but if people have a business, I do encourage them to write off anything

01:50directly related to their business. They should feel empowered to do that. Just keep

01:56your receipts. You can write off your travel, your mileage, any equipment, or your home

02:04office. You definitely want to make sure you do that if you are using your home office

02:11or traveling so that you can lower your taxable income.

02:17I don't mean to laugh, but this is a sad state on our educational system because we clearly

02:22do not teach this stuff in school, that these people don't understand this. All right, so

02:27what surprised you the most out of all of this, other than the fact that Gen Z has no

02:31clue about their taxes?

02:34Yeah, I would say that people don't realize that if you don't make the IRS threshold,

02:42you don't need to file your taxes. That is a big misconception. People should absolutely

02:48file if they had federal taxes taken out of their paycheck, and also if they're eligible

02:54for credits like the earned income tax credit. I know the IRS, every year they state that

03:00they have over a billion dollars in unclaimed refunds, and a lot of that belongs to people

03:06who make under the IRS threshold, and especially students.

03:10One of the other data points about the earned income tax credit, that kind of didn't surprise

03:16me. It aligned with the IRS. They say that one out of five people miss the earned income

03:23tax credit, but that is a substantial credit for people. It's $7,830 for a family with

03:34three kids, so people that are eligible should definitely make sure that they claim that.

03:40For students in particular, nowadays it's so simple to file your tax return. You could

03:45do it on your phone, so there's almost no excuse to get it done, right?

03:50Yes, it's really simple. TurboTax makes it easy. You could snap a photo of your W-2,

03:56your 1099s, and in some cases, people are 50% done with their taxes. Also, TurboTax,

04:05we continue to offer done-for-you tax filing experiences with unparalleled ease. Right

04:12now, we have the TurboTax mobile app offer, so if you do your taxes yourself on the mobile

04:19app, you can file your federal and state taxes for absolutely free, regardless of your complexity,

04:25and that's until February 18th. Then we continue to offer TurboTax free edition. If you have

04:31a simple Form 1040 only, you can have earned income tax credit, child tax credit, student

04:37loans, and some interest, but no schedules. Your federal and state are absolutely free,

04:45no other charges.

04:46Yeah, that's amazing, and people should remember that, especially because it's so good to get

04:52started because then every year, all the info just rolls forward, and it makes life

04:56so much easier. Lisa Greene-Lewis, CPA and TurboTax expert, thank you for sharing all

05:02that.

05:03Thank you for having me.

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