Nearly 20% of Young Workers Not Getting Tax-Planning Info
A news release reported the nationwide CCH CompleteTax survey found that 19% of young taxpayers 18 to 24 years of age, said their employer did a terrible job at providing them the tax-planning information, while 15% of young taxpayers rated their companies as excellent or very good in that area.
Overall, 23% of taxpayers gave their employers an excellent or very good job rating about keeping them informed about tax-advantaged financial matters, the announcement said.
“Young people may need to take more initiative to become more tax-savvy consumers. Employers also need to consider if they are doing enough. For example, are they communicating in the ways most receptive to young employees,” said David Bergstein, tax analyst for CCH CompleteTax, in the news release. “If young workers are not hearing the message, no matter how good it is, they don’t have the information they need to make informed choices.”
Also, according to the survey, young taxpayers were the least likely to participate in a workplace retirement plan, with only 28% saying they do so, including just 4% that reported contributing fully and 16% contributing up to the amount needed to make their employer contribute the maximum match under the plan.
Overall, more than one-half of all taxpayers (56%) contributed to a company-sponsored retirement plan, including a 401(k), 457, 403(b) or SEP-IRA plan. This includes 14% of taxpayers that reported contributing fully in 2006 and 23% contributing at least up to the maximum match amount.
The biggest jump in tax-advantaged program participation, according to the survey, occurred between the age groups of 18 to 24 year-olds and 25 to 34 year-olds, with the percentage of individuals contributing to a medical flexible spending account (FSA) or 401(k) plan more than doubling between these age groups. The percentage contributing to an individual retirement account (IRA) increased 10%.
The survey also found that 14% of all adult taxpayers are currently not saving for retirement.
Additional survey results included that three in 10 taxpayers reported they have or would be contributing to a 2006 traditional or Roth IRA, only 19% of young taxpayers reported that they are funding a 2006 IRA.
On average, 21% of taxpayers participated in a medical FSA in 2006, with 7% putting in the maximum amount allowed. However, among young taxpayers only 10% participated in a company-sponsored medical FSA.
This survey was conducted online within the United States by Harris Interactive on behalf of CCH CompleteTax from February 5-7, 2007, among 2,289 adults (aged 18 and over), of whom 1,290 were employed at least part time (more than 20 hours per week) during 2006 and plan to file a 2006 federal income tax return.