Millions of Americans lack confidence in their understanding of the U.S. tax system, according to new research commissioned by Sigma Tax Pro. And many workers are paying for it in stress, filing errors, and missed deductions.
The survey of 2,002 U.S. adults found that 45% of Americans admit that they do not understand the tax process, nearly a third (30%) say they would not feel confident filing their taxes without help, and more than one in five (22%) say they are not sure what counts as taxable income.
Concerns about errors are also widespread. More than one in four Americans (27%) worry about getting into trouble for filing incorrectly, and 25% worry that they may have made mistakes on previous tax returns. Another 23% admit they have made mistakes on their taxes in the past.
The findings also suggest these knowledge gaps are hitting Americans in the pocket. Nearly a third (30%) believe they have missed out on deductions or credits they were eligible for, costing potentially thousands in lost income. And anxiety around filing may be driving some to put it off altogether, with 25% admitting that they wait until the last minute to file.
Taken together, these issues may explain why one in four (25%) Americans say tax season negatively impacts their mental health.
Ian Gardner, Director of Sales and Business Development at Sigma Tax Pro, said: “Taxes affect virtually every working American. Filing is one of the most important financial tasks of the year, and yet our research shows that a huge number of taxpayers still find the system difficult to navigate.”
“When taxpayers lack confidence in their understanding of the rules, it creates unnecessary stress, increases the likelihood of mistakes, and means many people end up paying more than they should, or worrying that they have. Whether someone files independently or works with a professional, having access to clear, reliable guidance throughout the year can make a significant difference, both financially and to peace of mind.”
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Tags: deductions, Income Taxes, IRS, mental health, tax credits, Taxes
