The IRS and Generation X
The only things certain are death and taxes. But if there is one thing we know about the young, it is that they have almost no sense of their own mortality. So for them, taxes is the only certainty. Ah… to be so young…
While it would be nice if we allowed everyone under thirty to earn as much as they can completely tax free, such a thing will never come about in our lifetimes. In the U.S., if a newborn could earn money, the newborn would pay income tax. That being the case, it is interesting to see how attitudes about taxes effect the way taxes are addressed from one generation to another.
There is a generational divide on what it means for one to pay one’s fair share. Previous generations may have been more likely to assume that the authorities know best, and be less likely to question what they owe. Others might take the broader view, reasoning that even if they, personally, do not access much of what is paid for by their taxes, it goes towards the greater good.
But Gen-Xers grew up on iTunes – choose only the songs you want, Pandora – radio tailored specifically for you, Priceline – name your own price, mentality. And they most certainly don’t unquestioningly trust the government to decide what is fair. To them, a fair share is only the share they used, at a price upon which they agreed.
Because this generation has access to technology that can make complex procedures more accessible, also, because they tend to distrust authority, they are more likely to be more hands-on with regards to their taxes than previous generations. It is nothing for the Gen-Xer to whip out a smartphone or tablet, load up a free-to-download app, and do their taxes while watching the latest episode of Game of Thrones.
Then again, anyone can do their own taxes if all they have is a single source of income with straightforward deductions. More money means more complexity. And that usually means calling a pro. But don’t expect today’s yups to respect the same trusted authorities as their parents.
Finding a trusted resource means going to their trusted social networks, getting recommendations from online friends, and reading uncurated reviews. Floridians are a people that tend to have money, and are serious about their taxes. However, the Disney parents are much more likely to find an Orlando tax accountant via a referral site than by asking a parent or grandparent. This is a hands-on generation that wants to take ownership of the entire process.
No Refund, No Problem
Modern yups are savvy, and wary about giving more money to the government than they absolutely have to. A lot of people get excited about the prospect of a huge tax refund. But a tax refund just means that you overpaid on your taxes, and are getting back the portion you didn’t need to pay.
This interest-free loan to the government does you no good whatsoever. Furthermore, there is no guarantee that you will get all of it back. The government is not going to voluntarily give it back. You have to make an ever so precise filing. From the Gen-X perspective, the better strategy is to pay as little as possible, as late as possible. The ideal tax filing is one where you get no refund and owe no taxes. Zero balance is better than a refund.
Whether young or old, taxes are a reality. No generation likes paying taxes. Gen-X shows signs that dislike has turned to distrust. They don’t trust the system. They don’t trust the government that is constantly spying on them. They feel cheated, and unwilling to give the system the benefit of the doubt. They would rather err on the side of owing at the end of the tax year, than risk giving the government one unnecessary penny. A complete tax revolution can’t be too many generations hence.