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Self-development: paths to personal growth. — Leadership — Careers

'Tax-Related Stress Levels': Research Uncovers Top 10 Strained States

If you're experiencing stress due to the forthcoming tax period, you're not an exception. A fresh examination identifies the states with the most tax-related tension and offers strategies to manage it.

,   and  Administrator
3 min read
Individual grappling with migraine during digital tax payment process on laptop, showcasing the...
Individual grappling with migraine during digital tax payment process on laptop, showcasing the complexities of tax season online.

At the beginning of the year, numerous factors contribute to the increased stress levels of the U.S. workforce. Many employees experience "twilight tension" as days grow shorter and colder. The first quarter of the New Year is also vital as performance evaluations take place, bonuses are distributed, and promotions are decided. During this time, employees often make career blunders that could negatively impact their professional growth. Furthermore, if you're launching a start-up, the pressure to avoid mistakes is even more intense. However, the most significant stressor might be "tax-athletic anxiety" as the tax-filing season approaches.

States Most Affected by 'Tax-Filing Anxiety'

Tax time brings stress for individuals who worry about their tax burden, potential audits, and the complexities of filing taxes. A study by Delia Law, a firm of skilled IRS tax attorneys, found that certain U.S. states experience more tax-filing anxiety than others. Using Google Trends, the team at Delia Law analyzed the frequency of searches for phrases like "tax help," "how to file taxes," "tax extension," "tax penalty," and "IRS payment plan." They then assigned each term a weighted score and calculated a "tax filing stress score" for each state. The following states reported the highest levels of stress:

  1. California (76.95)
  2. Hawaii (72.62)
  3. New Mexico (71.76)
  4. Arkansas (70.48)
  5. Oklahoma (70.29)
  6. Georgia (69.67)
  7. Kansas (67.81)
  8. Oregon (67.76)
  9. Alaska (67.43)
  10. Rhode Island (67.43)

Californians are the most anxious about their tax filings. Dawn Delia of Delia Law suggests that this could be due to California's high cost of living, causing concern over potential tax payments. Additionally, the state has a large number of freelancers and entrepreneurs, who often face complex income reporting and deduction issues.

Hawaiians ranked second with a stress score of 72.62. Delia attributes this to Hawaii's high income tax rates, which can have a significant financial impact on residents.

Residents of New Mexico placed third with a stress score of 71.76. Higher poverty rates and lower average incomes might contribute to the feeling of burden and stress when it comes to tax payments in New Mexico.

Least Stressed States

The following are the ten least stressed states, along with their tax filing anxiety scores:

  1. South Dakota (49.29)
  2. New York (52.90)
  3. New Jersey (54.38)
  4. Wisconsin (54.48)
  5. Michigan (55.29)
  6. Wyoming (55.71)
  7. Ohio (55.76)
  8. Illinois (56.67)
  9. Massachusetts (56.76)
  10. Minnesota (56.95)

South Dakota is the least stressed state when it comes to taxes, despite having a complex tax system, according to the Progressive Policy Institute. South Dakota is one of only a few states without a state income tax, simplifying the tax filing process.

New York, which ranks high in the State Tax System Complexity Index, receives an honorable mention and ranks just outside the top ten. Delia explains that while the system may be complex, New York offers a wide range of tax preparation services and resources, such as free programs, to help alleviate stress for residents.

Delia emphasizes that tax anxiety should not be dismissed as an unavoidable burden each year. It can have a significant impact on your mental health and well-being and might even lead to potential financial problems or fines if filing isn't accurate.

Strategies to Reduce Tax-Filing Anxiety

Delia suggests two effective strategies to help reduce tax-filing anxiety:

  1. Preparation is key. By gathering all necessary documents and familiarizing yourself with the tax system well in advance, you will have plenty of time to research unclear topics and complete everything without the stress of last-minute deadlines.
  2. Seek professional assistance. A tax expert can simplify complex issues and provide guidance tailored to your specific circumstances, taking the weight off your mind during tax season. Online resources and tools are also beneficial if a professional is beyond your budget.

Delia also recommends ten five-minute "Microchillers" to help cope with tax-filing anxiety. She concludes by suggesting that increased financial literacy resources would assist filers in reducing tax-filing anxiety and building confidence in their submissions.

After recognizing the states with the highest levels of tax-filing anxiety, it's important to consider strategies to reduce this stress. Delia Law suggests two effective methods: firstly, thorough preparation by gathering all necessary documents and familiarizing oneself with the tax system in advance, and secondly, seeking professional assistance from a tax expert or utilizing online resources and tools.

Moreover, demonstrating leadership and taking charge of career paths can also help combat stress during the New Year's period. Employees who proactively address potential career blunders and seek opportunities for growth and development might find this period to be less stressful. Effective leaders in the workplace, whether they are in established roles or starting their entrepreneurial journey, can navigate the challenges with a positive mindset and resilience.

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