US taxpayers admit tax refunds are a 'financial necessity' as the cost of living crisis continues

Trustpilot Survey reveals a generational divide: younger taxpayers are more likely to file early, rely on their refunds to cover basic expenses, and are more willing to trust AI to do their filings

NEW YORK, March 13, 2025 /CNW/ -- Trustpilot, the global independent review platform, today released its 2025 tax season survey data, revealing the financial strain shaping taxpayer behavior. With 79% reporting inflation and the rising cost of living as the top concerns, a majority (51%) of Americans see their tax refund as a financial necessity rather than a windfall.

Generational differences highlight that younger taxpayers feel the greatest strain, with half of those aged 18-34 relying on refunds for essentials like rent, groceries, and bills. Filing habits also reflect a generational divide—while younger taxpayers file earlier and favor online tax software, older Americans are more likely to wait and hire a professional. US taxpayers must file their income tax returns by April 15, 2025.

The 2025 Trustpilot tax season survey reveals that more taxpayers than in 2024 are relying on a tax refund for financial relief, with 47% of taxpayers saying their tax outcome will impact their ability to afford essentials, up from 35% in 2024. Financial hardship is also causing more taxpayers to delay filing for fear of owing money to the government—28% in 2025, compared to 12% in 2024.

There are also changes in how taxpayers are seeking guidance, with 43% relying on reviews, online forums and news articles, a sharp increase from 25% in 2024. Filing methods have remained steady, with 58% planning to use tax software, compared to 60% in 2024, and 27% opting for a professional, up slightly from 24% last year.

Meanwhile, trust in AI for tax filing has declined, with skepticism rising from 50% in 2024 to 65% in 2025. Younger taxpayers (18-34) are the most open to AI, with 35% willing to use it for tax preparation, but trust declines with age—60% of those 35-54 and 80% of those 55+ say they do not trust AI at all. As consumers navigate their options, trust and reputation remain critical factors in selecting a tax service.

"Trust is at the center of every financial decision, and tax season is no exception," said Dana Bodine, U.S. Vice President of Marketing at Trustpilot. "Consumers want confidence that their tax provider, either software or a professional, is accurate, secure, and will maximize their return. This is where trusted reviews play a crucial role—helping people navigate their choices and select a service that meets their needs. For tax providers, a strong reputation built on transparency and customer trust can be a key differentiator in an increasingly competitive market."

The survey of 1,015 consumers, conducted from February 20-21, 2025, reveals how financial concerns are shaping tax filing decisions, influencing where consumers seek advice, impacting their expectations for tax preparation services, and determining how they will spend their refunds.

Inflation and Economic Pressures Shape Taxpayer Behavior

With 79% of Americans citing inflation and the cost of living as their biggest financial worries, tax refunds have become more essential than ever:

• 39% of taxpayers are relying on their refund for basic necessities, while another 22% will use it to pay off bills or debt.
• Only 6% plan to use their refund for a vacation, underscoring the financial strain on many households.
• 28% of those who haven't filed yet say it's because they can't afford to pay if they owe the government money.

Younger Americans File Early, Older Generations Prefer Professionals

The survey found notable differences in how age groups approach tax filing:

• 65% of young taxpayers (18-34) have already filed, compared to 50% of those 35-54 and just 40% of those 55+.
• 55% of older filers (55+) rely on professional accountants, while younger taxpayers (18-34) prefer online tax software (60%).

Refunds Are a Financial Lifeline, Particularly for Younger Taxpayers

The generational divide is especially clear when it comes to tax refund plans:

• 50% of taxpayers aged 18-34 plan to use their refund for essentials like rent and groceries, compared to 35% of those 35-54 and just 20% of those 55+.
• Without a refund, 40% of younger taxpayers (18-34) say they would struggle financially, versus only 10% of those 55+.
• Across all generations: 51% plan to save it or use it for necessities, while 24% will use it on major household items or travel.

Would You Trust AI To Do Your Taxes?

While AI is increasingly used in financial services, skepticism remains high for tax preparation:

• 36% of taxpayers trust AI to prepare their taxes, but 43% don't trust AI at all, and another 22% wouldn't use a tax service that relies on AI.
• Trust in AI declines with age:
  - 35% of 18-34-year-olds trust AI for tax filing.
  - That number drops to 25% for those 35-54 and just 10% for those 55+.
• 80% of older taxpayers (55+) don't trust AI at all.

The Top Five Expenses Most Impacted By Tax Filing Outcomes

Americans revealed the key expenses that will be most affected by their tax refunds or any taxes owed:

• Groceries and household essentials (47%)
• Gas and transportation (28%)
• Bills, loans, and credit card payments (27%)
• Dining out (25%)
• Travel and vacation (24%)

Methodology

In collaboration with the market research company Qualtrics, the review platform Trustpilot conducted an online survey of 1,015 people aged 18 to 75 in the United States about tax season. The survey ran from February 20-21, 2025.

About Trustpilot

Trustpilot began in 2007 with a simple yet powerful idea that is more relevant today than ever — to be the universal symbol of trust, bringing consumers and businesses together through reviews. Trustpilot is open, independent, and impartial — we help consumers make the right choices and businesses to build trust, grow and improve.

Today, we have more than 320 million reviews and 70 million monthly active users across the globe, with 140 billion annual Trustbox impressions, and the numbers keep growing. We have more than 1,000 employees and we're headquartered in Copenhagen, with operations in Amsterdam, Denver, Edinburgh, Hamburg, London, Melbourne, Milan and New York.

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SOURCE Trustpilot

Caroline Quinn, [email protected]