They may be independent, success-driven and tech-savvy, but when it comes to their taxes, Millennials (those born 1982 to 2004) tend to be more apprehensive than older generations about the preparation and filing process, says Vince Mattina, CPA, Managing Partner.
Part of that fearfullness has to do with their inexperience, Mattina believes.
"While many parents of Millennials did their own taxes, they did not encourage their children to follow suit," Mattina said. "The parents either did the child's taxes or sent the return to their own tax preparer for completion. That's likely the main reason that young adults get anxious when it comes to being responsible for their returns. The tax codes can be confusing and the return process is more complicated than it was 25 years ago."
Complicated? Mattina says in spite of popular tax software programs to help simplify the process, Millennials fear making a mistake.
"Despite being technology natives, Millennials are fearful of the permanence of submitting a return online," Mattina said. "Like other taxpayers, they also want to maximize their refund, and may not feel confident they can do that on their own. Even though we advise clients to plan their withholdings to get the lowest refund possible and have access to their money year round, young adults often look at the tax refund as a forced savings plan. The larger the refund, the more they can save or spend."
So will CPA firms and tax preparation services see a boom in business as a result of the Millennial trend? Mattina says that CPA firms like MKG are generally focused on commercial clients and corporate returns as well as those of wealthy individuals, but enjoy accomodating their client's children - the next generation of business owners.
"When you're in the client service business, the goal is to keep clients happy with a job well done," Mattina said. "If completing a tax return for a client's Millennial child supports our primary client relationship, we are absolutely willing and happy to do so."
For Millennials and other taxpayers seeking a tax preparation service, Mattina offers the following considerations:
"Millennial tax payers believe it's worth it to pay for their tax preparation. Not only does it make financial sense to them, it saves them the burden and anxiety they perceive is related to the process," Mattina said.