Gen Z is taking personal finance personally.
One in four Gen Z taxpayers said they’re planning to seek out therapy to deal with the stress of filing season, a DKC Analytics survey commissioned by Cash App Taxes found.
Over half of Gen Z respondents in a survey of 1,000 U.S. adults said tax stress has brought them to tears (compared with 38% of millennials), and one-third said tax stress has caused an argument with a loved one. (Cash App, which backed the survey and is popular among Gen Z, offers online tax filing services.)
Eric Bronnenkant, head of tax at Betterment, a digital financial advisory company, told Fortune that Gen Z faces financial burdens, such as student loan debt, that can exacerbate stressors.
“They may already be finding other challenges in their financial life, and then thinking about taxes as this add-on challenge may only increase some of the anxiety associated with that,” he said.
Student loan debt now tops $1.8 trillion in the U.S. Many members of Gen Z have the disadvantage of lacking financial literacy and basic knowledge about managing finances. Americans ages 18 to 29 have the highest rates of delinquency, with 10% of credit card owners in the age bracket at least 90 days late on payments, according to the Federal Reserve Bank of New York.
Though millennials surveyed reported less tax-related stress than their younger counterparts, they could have used some therapy when they were Gen Z’s age, too. Millennials reported the highest levels of stress compared with Gen X, boomers, and older generations, according to the American Psychological Association’s 2015 Stress in America survey. They ranked money as their highest stressor, above work, family, and health concerns. Millennials’ similar attitudes toward personal finance a decade ago suggests that money-related stress is a function of age.
But Gen Z may also be to blame for their attitude toward tax season, making money in ways that require more attention in reporting. Zoomers, perceiving they are financially behind older generations, are keen on taking financial risks, turning to the stock market in response to inflation and rising interest rates. The tech-savvy younger generation has easy access to investment tools, and over half of Gen Z owns at least one investment. Cryptocurrency has piqued their interest the most, with 55% of Gen Z investors including crypto in their portfolio.
Driven by wage slowdowns in their day jobs, other members of Gen Z have turned to the gig economy to make ends meet. Lower rates of home ownership compared with other generations means Zoomers move around more and take on more jobs.
Juggling multiple jobs and an investment portfolio that includes crypto causes headaches for any generation, Bronnenkant said. While tax stress isn’t exclusive to any age group, Gen Z’s interest in these particular ways of making money means their woes are, in part, self-inflicted.
Gen Z’s crypto problem of their own creation
In theory, reporting cryptocurrency earnings on your taxes shouldn’t be complicated, as long as you only have one currency, such as Bitcoin, and use a centralized wallet such as Coinbase, George Shakro, crypto tax associate with Gordon Law Group, told Fortune.
But that’s not how Gen Z is investing and trading with cryptocurrencies, he said. Gen Z prefers decentralized, peer-to-peer trading with options for blockchain gaming and finding meme coins. Ethereum, a decentralized blockchain, has climbed in popularity because of its switch to proof of stake, which allows investors to put up a cryptocurrency and earn a yield passively.
For an everyday crypto trader with a decentralized wallet, it’s not unusual to have 10,000 to 20,000 transactions a year, making trades difficult to trace and record come tax season.
“When you’re moving crypto around between different platforms, that platform has no idea when you purchase that or how much you purchased it for,” Shakro said.
Young crypto traders also have the misconception that they don’t owe taxes until they cash out after long-term capital gains. That’s not the case, Shakro said. Anytime there’s a cryptocurrency transaction, the trader owes a tax.
The IRS will introduce a 1099-DA for 2025 for crypto traders to explicitly report digital assets, which will make the tax filing process easier.
Filing taxes in general will get easier over time, argued JoAnn May, principal at Forest Asset Management. Tax season is tough on everyone, especially those new to its troubles.
“Gen Zs are fairly young individuals,” May told Fortune. “As you get a little bit older, go through the hard knocks of life, you learn more as you go along.”