More Americans have an accurate understanding of how lottery winnings are taxed than they do of the main components of retirement income, new research reveals.
The “Retirement Tax Considerations for Middle-Income Americans” study, by the Center for a Secure Retirement, polled 1,000 Americans ages 50 and older with an annual household income of between $25,000 and $75,000 on questions relating to federal taxes.
When asked to choose which activity they disliked the most, respondents said that doing taxes (23 percent) is almost equally as disliked as the unpleasant experience of going through airport security (29 percent). In fact, getting a flu shot is preferable to doing taxes for many middle-income Americans over age 50.
However, when it comes to completing and filing their annual tax returns, 38 percent work with a tax preparer, 54 percent prepare and file their own tax return, and 31 percent use tax-preparation computer software. Nearly one in five (18 percent) complete their tax returns on their own without any external advice or guidance.