By Jeremy D. Wells
Carter County Times
I recently heard a story on the radio about Gen Z tax filers being so stressed out by the process that they had to visit a therapist afterward.
My first thought was that this must be a very privileged set of Gen Z kids. For one, they made enough money that they had to file something more complicated than the 1040 EZ that I likely filed when I was their age. For another, they had enough money to pay for a therapist (which is something I still don’t have).
That was my first thought, then someone pointed something out to me; the workplace has changed dramatically since I was a kid. A lot of young people today aren’t working an hourly job that gives them a W-2. Instead, a lot of these younger folks – employees of the so-called gig economy – are given a 1099 form as self-employed contractors. Even if the job is their only form of income, and they work full-time for someone else, these young people aren’t provided with any employee benefits – like insurance, vacation, or a 401K or other retirement plan – and they don’t have any taxes withheld from their check.
They know they don’t have any of the benefits of “regular” employees. But what many of them don’t realize, at least until they go to file their first tax return, is that they are going to have to pay the full amount of taxes on their income. If they haven’t been saving a portion of their income back to cover those taxes, come April they’re going to suffer some serious sticker shock.
This, of course, assumes they can even afford to save any money back. With inflation driving up the cost of everything from groceries to gas, rent, and utilities, a lot of these kids are living paycheck to paycheck.
That’s nothing new. A lot of us Gen Xers (and to a lesser extent Baby Boomers) have spent a good portion of our adult life in a similar boat. The difference is, when I was living paycheck to paycheck, I could usually still expect a refund at the end of the year. It might not be a very large refund, but it was better than paying. When I did have to pay something, it was usually state taxes, and that extra bit back from the federal government was especially appreciated in those cases.
I never had to worry about self-employment taxes until I was in my mid-30s. By then, even though I was still shocked by how much the federal government seemed to punish those who worked outside the corporate employee structure, I was making enough money to cover the costs.
That’s not true for a lot of young people today. Not only are they earning barely better than minimum wage level incomes, they’re getting hit with huge tax bills at the end of the year. Tax bills many of them weren’t prepared for.
To be honest, this might just give me anxiety too.
So, if they can’t afford their tax bills, then where are they getting the money for a therapist?
This was the part that I really got hung up on. My initial advice to any young person who was experiencing this kind of stress was to save the money they were spending on regular appointments with their therapist, and put it towards their tax bill. Then they wouldn’t have the kind of stress that would lead them to seek out therapy.
But, as someone else pointed out, healthcare is another thing that’s changed since I was a young man. While I was kicked off my parents’ insurance as soon as I graduated high school and started college (and have the gap in my smile to prove it), insurance laws have changed since then. If they are under the age of 26, they might still be on their parents’ insurance. If this is the case, they might be seeing their therapist under that plan, rather than paying directly out of pocket.
Point is the kids today aren’t growing up in the same world we did. They’re living in the one we’ve given them, and it isn’t always a kind one. So, maybe, we should try to be a little more kind in regard to their struggles and concerns; and in general. Because we may have more years of experience than they do. But it doesn’t mean we fully understand their experience.
Contact the writer at editor@cartercountytimes.com
