One would think that the tax situation for the younger generation, mostly millennials as we call them, is not very complex. Thus traditionally, this demographic is not the target market for the majority of tax firms. Taxpayers under the age of 35 don’t usually seek services of tax professionals or tax preparers.
However, it might happen that in the present day scenario, millennials (those born between the early 1980s to late 1990s), may encounter a flabbergasting magnitude of complexities related to tax that the previous generations did not face. Thus, contrary to the popular belief, making them the ideal client for tax preparers can prove to be a gold mine for the tax industry to serve.
Guide the Millennials
As per studies and reports, the millennials now comprise the most sizeable portion of the workforce in the United States. This ultimately makes them the largest portion of active taxpayers. There have been extensive talks about millennials being the shaping edge and how they are transforming the American economy and society.
The millennials’ affinity towards technology, voting, recreation, and their spending habits have given a whole new face to how money is used. Embracing this change, tax professionals can gear up their firms to welcome millennials as they face unique and new tax issues today, and develop those relationships for future wealth growth.
To prepare a tax firm for a sporadic wave of millennial clients, it would be a good idea to take steps in this regard now and to fully understand their concerns, issues, obstacles, and achievements. If a firm is making a mistake of not paying much heed to the millennials and their needs, it could take a toll on the client base. One could stand a chance to miss out on some excellent clients and damage the pan-age appeal.
Let’s take a looks at few of the potential tax and financial concerns that millennials would face :
1. Millennials Transitioning from Dependence to Independence
The metamorphosis from a young dependent to an adamant independent adult is always a tricky one. It can be pretty challenging for young individuals to come out of relying on their parents to strike out on their own. As per the current tax laws, parents can claim their kids as their dependents until they are 19 years old, or till the age of 24, in case they are a full-time student.
When starting on their own, young adults have vague ideas on how their parents dealt with taxes on their behalf. This may cause them to make simple mistakes during this transition.
This is where a professional tax preparer comes into play. In the event of mistakes on a millennial’s tax return, they would be needing a tax specialist’s assistance.
Of course, the IRS doesn’t differentiate between a millennial and an older taxpayer. For the IRS, all citizens stand equal, and the authorities would end up imposing penalties in case of any discrepancies or errors in filing. It’s common for these youngsters to end up with a tax bill they are probably unable to pay.
Helping millennials sort out such errors, by offering tax resolution services, can only prove beneficial for a tax firm. This could help to sow the seed for the beginning of a long-term professional relationship.