Tax Preparation Support Program: The Next Small Firm Practice Area?
When it comes to understanding their income tax options, nearly one-fifth (18 percent) of employees do not fully comprehend how their W-4 forms impact their taxes and paychecks, according to a national survey by Hudson. That figure rises to 29 percent when looking at workers aged 18-29 years old. Additionally, two in every five U.S. workers (40 percent) would be interested in a tax preparation support program from their firms if it were offered.
Further, just one-third (34 percent) of workers report that they prepare their taxes themselves, compared to 55 percent who hire a professional. Among those who look to outside resources for help, seven in ten hire a CPA while the remainder choose tax preparation firms. Age differences are also notable here; as workers get older, they are more likely to turn to a CPA for assistance. Half of those aged 65 and older use a CPA, compared to 27 percent of those aged 18-29. In addition, entrepreneurs are also more likely to use a CPA -- 50 percent compared to 25 percent who do it themselves.
"The Hudson survey emphasizes the need for educating employees -- especially those new to the workforce -- on the subject of taxes and their implications," says Brendan Flood, chief financial officer and chief operating officer, Hudson North America. "As their careers progress and tax preparations likely become more complex, employees also stand to benefit from additional training, ideally as part of a program covering financial and retirement planning."
Age also plays a part in determining when individuals file their tax claims. While nearly half (47 percent) of the U.S. workforce have already filed their tax forms, only 29 percent of those 65 or older have filed. In contrast, 62 percent of younger workers (ages 18-29) have already filed. Additionally, 47 percent indicate they will file before the April 15 deadline.
Only a mere 3% stated they will file for an extension. However, this number increases to 7% for entrepreneurs, who also are less likely to file early, as only 34% have filed thus far.
The Hudson taxes survey is based on a national poll of 1,890 U.S. workers and was compiled by Rasmussen Reports, LLC, an independent research firm.
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