Approximately 60% of millennials who file their own taxes worry about missing a deduction or not getting the most from their return, according to a new study commissioned by Jackson Hewitt tax service.
In addition, nearly 70% of the more than 1,000 people ages 20 to 36 who were surveyed said they look forward to their refund each year. The biggest reasons for that, however, varied: 66% said they plan to use at least a portion of their refund to pay off bills or settle debt, while 37% plan to use at least some of their refund to "reward" themselves.
Paying off debt was the most popular answer, followed by 40.8% who planned to put some of their refund into savings. After that "reward themselves," was third with "home repairs" just behind at 34.8%.
Are millennials different?
Millennials tend to get painted with a broad brush. Everyone gets a trophy, right? Rampant sense of entitlement, right? But every generation takes heat for a while. Gen X lived in their parents' basements, right, chowing down on sugary cereal?
In reality, millennials are as diverse as any other generation. In addition, because of the age of the members of the group -- 20 to 36 for the purposes of this survey -- millennials find themselves not all at the same point in life, which makes their perspective on taxes rather varied.
"Each and every taxpayer has a unique situation, but millennials in particular may be experiencing more life changes than other age groups," said Jackson Hewitt Chief Tax Officer Mark Steber in an email to The Motley Fool. "They have potentially recently bought a home, married, had children, obtained higher-level education, started a new business venture, or traded cyber currency."
More tax facts about millennials
While millennials face all sorts of different tax situations, most members of the generation planned to have their taxes filed early, according to this survey. Eight-five percent said they planned to have filed their taxes by the end of February. Of those who were going to wait until later in tax season, 41% said they procrastinate because they don't enjoy doing taxes.
The age group split when it comes to their understanding of how they will be impacted by tax reform. About 37% of millennial taxpayers believe they will pay more in 2018 after tax changes take effect while 19.3% think they will pay less. Nearly a quarter (23.6%) expect they will pay the same and 19.6% are simply not sure.
Be smart with your refund
No matter what age group you are in, you should treat your tax refund carefully. If you have high-interest debt, like credit card balances, it's generally best to pay that off first. After that, it's smart to build an emergency fund that would cover at least six months of expenses. However, if you have no debt, have an emergency fund, and are on track for retirement saving, it's OK to splurge on something for yourself.