Nearly half of Americans confess they 'file and forget it' when it comes to taxes

Nearly half of American taxpayers admit to thinking about their taxes only when it’s time to file a return, potentially missing out on key financial planning opportunities, according to new research from Edelman Financial Engines.

The study highlights a widespread lack of confidence in tax management, varying approaches across age groups, and a growing demand for professional financial guidance.

The survey found that 44 percent of respondents take a “file and forget it” approach, focusing on taxes only at filing time rather than incorporating tax planning into their broader financial strategy. More than half – 52 percent – believe they are losing out on tax-saving opportunities due to a lack of knowledge or advice.

“Taxes can be daunting and difficult for many people to manage on their own, yet they’re such an integral part of the broader financial planning process, which goes far beyond filing a tax return each year,” Amin Dabit, head of wealth planning at Edelman Financial Engines, said in a statement announcing the findings. “How we think about taxes in these situations can translate to significant dollars lost or gained over a lifetime.”

The study uncovered generational differences in tax planning behaviors. Younger (30-44) and older (65+) Americans are more proactive, with 62 percent considering taxes throughout the year. However, those aged 30-44 are the most likely to feel they are missing out on tax-saving strategies, with over half citing a lack of knowledge or reliable advice as a barrier. In contrast, the majority of respondents 65 and older expressed greater confidence in their tax decisions.

Not surprisingly, many viewed tax planning as a less-than-desirable task. Seventeen percent said they dislike tax prep, filing, and paying, just a little more than the 16 percent who said they wouldn't enjoy a week with in-laws. For further perspective, 26 percent of respondents shared a disdain for long waits at the DMV, and 30 percent blanched at the idea of public speaking.

Despite the challenges, more than two-fifths of respondents expressed a strong interest in professional guidance. Forty-five percent said they want tax planning advice for retirement, while 41 percent seek help with tax-efficient investing and tax preparation. High-net-worth women showed a greater preference for professional help with tax-efficient investments than men (60 percent vs. 44 percent).

Still, a lack of clarity in tax rules remains a significant pain point for many Americans. Nearly half (44 percent) pointed to constantly shifting tax codes as their biggest frustration – the survey doesn't say as much, but that likely includes the uncertainty over provisions of the 2017 Tax Cuts and Jobs Act from President Trump's first term – followed by confusion over tax laws (21 percent) and concerns about owing money (17 percent). Older adults (65+) reported the most difficulty keeping up with tax code changes, with 55 percent citing it as their main issue.

“Many Americans – even the affluent – are feeling unsure about their tax strategies, highlighting a significant need for more financial resources, advice and help,” said Eric Bronnenkant, director of tax advisory and planning at Edelman Financial Engines.

The study also found that those who seek professional tax advice are more confident in their financial planning. Individuals who work with tax professionals are 18 percent more likely to consider tax strategies year-round and 10 percent more confident in their overall tax planning. They also demonstrate a better understanding of strategies such as estate planning (13 percent more) and Roth conversions (8 percent more) compared to those who manage their taxes on their own.