In the (mostly) immortal words of Tom Hanks: There's no crying in tax season. But for Gen Z, tax season anxiety is very real.
A recent CNET tax survey survey found that 51% of Gen Zers have tax filing fears. While they're the biggest demographic to react so strongly to tax season, they're not the only ones: 48% of millennials reported feeling stress over their taxes.
"It's normal for people to have at least a little bit of anxiety around something new," said Jassen Bowman, IRS enrolled agent and tax expert. "Many Gen Zers are just now starting to enter the workforce, and they're either not used to filing taxes at all, or perhaps their parents did it for them until now."
Whether you're filing your taxes for the first time or fumbling through a confusing return, you may feel overwhelmed by the tax filing process too. I talked with an expert to help clear the air and get tips to make filing taxes as pain-free as possible for Gen Z -- and everybody else.
1. Find free tax resources
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.
"There are definitely some resources available out there for getting free tax help," said Bowman. "The IRS provides training, material, and grants for two important programs: Low Income Tax Clinics and the Volunteer Income Tax Assistance program. Both of these programs exist to help taxpayers meet their filing and payment obligations, and they are operated by local non-profits."
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.
CNET's survey also found that Gen Z was the most likely to turn to social media and AI chatbots for tax advice -- a move that can be risky. Social media can also unlock free tax advice, but be wary of trusting tax suggestions from anyone without a tax background. AI can also be a helpful tool, but it's been known to show incorrect or outdated information. When in doubt, turn to a CPA, accountant or tax attorney to double-check your tax return.
2. Don't pay to file if you qualify for free options
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 -- you may be able to file for free.
This year, 39% of Gen Z filers said they were unsure if they qualify to file for free -- the largest percentage of all the generations CNET surveyed.
There are many ways to file for free. If you have a simple tax return, you may qualify for free filing through industry leaders TurboTax and H&R Block. If you'd prefer to do your taxes on your phone, Cash App Taxes is completely free, though it's not as user-friendly as competitors. You might also qualify to file for no cost through IRS options like IRS Free File or IRS Direct File.
Even if you don't qualify for free filing, there are affordable alternatives that charge a flat $25 rate like Jackson Hewitt Online or FreeTaxUSA that offers a free federal return and $15 state return.
3. Want your refund faster? File sooner
While you may dread filing your taxes, waiting until the last minute only delays getting your refund and can add more stress.
"Filing early is always a good idea," said Bowman. "This gets you your refund as soon as possible."
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.
"With the possibility of a government shutdown around the corner, you don't want to get stuck in a situation where your refund is delayed because the IRS has to send staff home," added Bowman.
4. Organize 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. This tax season, the IRS rolled out 1099-K changes for freelancers paid through third-party payment apps like Venmo and Cash App. So if you earned money that wasn't taxed, the IRS is going to know about 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.
Experts say the best way to make managing side hustle income easier is to stay on top of your income and expenses throughout the year.
"Keep good records. Use a bookkeeping app to take pictures of every business receipt as soon as it's in your hand, so that you are able to deduct every legitimate business expense," said Bowman.
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 talking to a tax professional.
5. In school? Don't overlook these tax breaks
If you're in college, there are potential tax benefits you should know about, like the American Opportunity Credit and Lifetime Learning Credit, both of which can help lower your tax liability and offset school expenses.
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.
6. Write off your student loan interest
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.
"If you've already started paying back your student loans, you may be able to deduct up to $2,500 in interest you pay each year on those loans," said Bowman.
To find out if you made student loan interest payments, log into your student loan account and check for tax form 1098-E.
Additionally, if you received student loan forgiveness in 2024, 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.