As this year's tax season approaches its April 18 deadline, 76% of American bank clients say they have concerns about their taxes, and 21% say they are more anxious than usual this year, according to J.D. Power's March Banking and Payments Intelligence Report, released Thursday.
J.D. Power highlighted this finding because many customers use their tax refunds to bolster their finances. In fact, it found that just 33% of respondents are financially healthy, while 41% are vulnerable and may need help this tax season.
The firm measures consumers' financial health as a metric that combines their spending/savings ratio, creditworthiness and safety net items such as insurance coverage. It places consumers on a continuum from healthy to vulnerable.
The level of customers' tax concerns in March was virtually unchanged from the February report, as was the overall level of inflation recognition and the percentage of respondents who said the price of goods is rising faster than their income.
The new report is based on responses from 4,000 retail bank customers nationwide to a survey fielded in February.
Tax Anxiety
According to the report, nearly half of customers complete their taxes themselves, 38% by using software and 10% without software, while 35% use a service or a preparer. The 45% of respondents who are stressed and the 43% who are overextended are more likely to use software to complete their taxes themselves.
The financially healthy customers are most likely to use a preparer.
J.D. Power found that 20% of customers fear they will owe more than planned, and 16% worry that they may not get a refund. Both scenarios would represent a big financial setback for customers, many of whom rely on the liquidity to help them meet existing expenses or pay down debt, the report said.
Younger customers in particular were also concerned about operational aspects of tax preparation, such as missing a deadline or making an error.
