Tax News TurboTax Mid-Season Tax Trends Report: Understanding Gen Z Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxBlogTeam Published Apr 13, 2023 - [Updated Apr 15, 2023] 3 min read Reviewed by Lisa Greene-Lewis, CPA and tax expert for TurboTax In January TurboTax released the first Tax Trends Report, looking back at the most recent tax year and drawing insights into income, employment, and cryptocurrency investing. TurboTax has continued to analyze tax data into the current filing season up to March 28th, 2023, with a focus on the newest cohort of tax filers: Gen Z. Using anonymized and aggregated data in compliance with U.S. tax regulation requirements, this report offers insights into the financial state and tax-filing behavior of this dynamic and diverse generation of tax filers. The data was sampled to reflect the general U.S. population of tax filers rather than TurboTax customers. Why publish this report now? Preliminary tax data provides a unique view into tax filers who submit their returns at least 3 weeks before the tax filing deadline. This population of tax filers tends to be younger or in the oldest age group, is generally lower income, and is more likely to receive a refund. Our aim is to provide a lens through which this group of tax filers can be better understood. View the entire TurboTax Mid-Season Report here Want to know more about how the data was sampled and analyzed? Read the Methodology of the January 2023 Tax Trends, and see the Appendix of this report for methodological details specific to the Gen Z analysis. Read the methodology TurboTax Tax Year 2022 Mid-Season Trends: Understanding Gen Z’s income, refunds, and tax-filing behavior 63.29% of Gen Z tax filers have seen an Adjusted Gross Income (AGI) increase of 10% or more year-over-year, 3.19% of Gen Z tax filers reported combined W-2 and self- employed income, a 25.57% increase year-over-year; and 91.3% of Gen Z tax filers received a refund in Tax Year 2021. Over the last three years, Americans experienced events that drove changes in their finances and everyday lives. Gen Z is especially susceptible to changes that impact their finances and taxes as many are exiting college and entering the workforce, starting their own business and investing. Our mid-season data trend report reveals trends in income shifts, refunds, and tax filing, with a focus on Gen Z. TurboTax Tax Trends Report FAQ Our data will uncover: How has reported income changed to date? How have tax filings that include combined W-2 and self-employment income changed over time? What are the top metropolitan areas for combined W-2 and self-employment income? What percent of Gen Z received tax refunds and when do they file? Key Findings Income: Early filers tend to have lower reported incomes. The median AGI in Tax Year 2021 was $46K. However, early filers (before April) had a median AGI of $40K, and those who filed after April 1st had a median AGI of $61K. For tax filers as of March 28, 2023 (the cutoff date for this analysis), the median AGI for U.S. tax returns is $46,950, an 11.14% increase in 2022 compared to the prior year. 63.29% of single Gen Z tax filers have seen an increase of 10% or more in 2022, a decline when compared to the previous year. As reported in our January 2023 Tax Trends Report, looking back at the most recent tax year, there is observed income growth that varies by life stage. The 2022 income growth rate is likely dampened in the current year from inflation. Sources of Income: Gen Z shows a year-over-year increase in having both W-2 income and self-employed income. Compared to other generations, Millennials have seen the most growth in having both employment income and self-employment income year-over year, however 3.19% of Gen Z tax filers reported income from both employers and self-employment, an increase of 25.57% year-over-year. The top 10 metropolitan areas where tax filers report both income from employment (W-2 income) and from 1099 self-employed income are concentrated in the South and in the Mountain sub-region of the West. Tax Refunds and Filing Behavior: Gen Z has a high rate of refund receipt with 91.3% of Gen Z tax filers receiving a refund in Tax Year 2021. 53% of Gen Z tax filers started and completed their returns on the same day in Tax Year 2021. 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