CEDAR RAPIDS, Iowa, April 6, 2020 /PRNewswire/ -- With tax season now marked with major changes due to Coronavirus (COVID-19), many tax filers are also scrambling to confidently navigate the ever-evolving tax code ahead of the newly established July 15 filing deadline. This is according to a recent national survey from TaxAct®, a leading provider of online and digital tax software. In fact, the research revealed 44% of Americans reported making at least one mistake on a tax return at some point in their lives, with 57% of men confessing to mistakes compared to 32% of women who participated.
The survey was conducted by Wakefield Research in February—one month before the historic IRS announcement to extend the tax deadline due to COVID-19—uncovered an interesting correlation between the approach individuals take to filing their returns and their propensity to make a mistake. Only one-third (33%) of those who always self-file reported making mistakes at least once on their tax return, while nearly half (48%) of those who rely on others to file their return for them reported a mistake was made. Furthermore, confusion over the tax code (31%) was a top reason participants cited for not electing to file their own taxes. And of those who reported making mistakes on a past return, 57% surprisingly described their approach to doing their taxes as "slow and steady."
"Even under normal circumstances, filing a tax return is an emotional event for many people," said Curtis Campbell, president of TaxAct. "As we all try to adapt to drastic changes in our lives and in tax regulations, it's even more important that our customers feel our support. That's why we put such an emphasis on designing product features that help filers uncover the tax savings they deserve and prevent even our most meticulous customers from making a mistake."
With nearly two-thirds (64%) of Americans surveyed concerned they are not getting the biggest refund they could, TaxAct continues to offer tax filers the benefit of its $100K Accuracy Guarantee, which is the strongest accuracy guarantee in the industry. Combined with a host of new product features that were introduced by TaxAct earlier this season, filers can confidently file their returns knowing they have the tools to help them maximize their refund.
Limited understanding of deductions
Despite the craving to get more money back this tax season, the survey also revealed that 95% of Americans do not fully understand the changes to tax laws that could directly impact their refund. For example, only 46% knew about the recent change to the standard deduction, while even fewer (22%) knew that personal exemptions have been eliminated. Individual tax deductions, which vary greatly state by state, were also a major point of confusion for filers. Not one person surveyed was able to identify all of the real tax deductions when presented with a list that included both real and imaginary examples.
Changes to the tax code happen each year, and this tax season is no exception. In fact, as late as January 2020, the federal government released a list of credits and deductions that were extended for the 2019 tax year and retroactively extended for the 2018 tax year. A few of those include:
- Residential Mortgage Insurance Premium Deduction—Qualifying taxpayers with an adjusted gross income (AGI) under $110K ($55K for married filing separate) can again deduct their private mortgage insurance payments.
- Reduction in Medical Expense Deduction Floor—Originally scheduled to increase in 2019, the floor for deducting qualifying medical expenses will instead stay at 7.5% for tax years 2019 and 2020.
- Deduction of Qualified Tuition and Related Expenses—Certain tax filers can write off up to $4K of expenses related to education costs.
- Credit for Fuel Cell Vehicles—A federal tax credit of up to $8,000 is available for the purchase of qualified passenger (light-duty) fuel cell cars.
"The tax game is constantly evolving," added Campbell. "Our team of in-house tax experts works diligently to ensure our product is up-to-date as those changes are approved so our customers have the opportunity to claim the credits and deductions available to them, and put more hard-earned money back in their pockets."
The TaxAct survey was conducted online by Wakefield Research among 1,000 nationally representative adults ages 18+, between February 12 and February 19, 2020. The margin of error was +/- 3.1%.
TaxAct is the savvy tax-filing partner helping ambitious Americans work the tax code to their advantage. TaxAct's do-it-yourself digital and downloadable products help customers find every tax break they deserve by finding them credits and deductions they may have never known existed. The program is fast, easy, and affordable, ensuring customers can improve their financial lives and gain access to the same insider tips and closely guarded secrets the country's wealthiest individuals have known about all along. That might sound too good to be legal. But trust us, it is. It's surprisingly legal.
To learn more about TaxAct, a business of Blucora, Inc. (NASDAQ: BCOR), visit taxact.com or connect with us on Facebook, LinkedIn, Twitter, and Instagram.
Blucora, Inc. (NASDAQ: BCOR) is on the forefront of financial technology, pioneering tax-smart financial solutions that empower people's goals. Blucora operates in two segments including wealth management, through its Avantax Wealth Management business (formerly operating under the HD Vest and 1st Global brands), the No. 1 tax-focused broker-dealer, with $71 billion in total client assets as of December 31, 2019, and tax preparation, through its TaxAct business, a market leader in tax preparation software with approximately 3 million consumer and professional users. With integrated tax and wealth management, Blucora is uniquely positioned to provide better long-term outcomes for customers with holistic, tax-advantaged solutions. For more information on Blucora, visit www.blucora.com.
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Amy Roepke, TaxAct, (319) 536-3557, firstname.lastname@example.org