A new study shows that while an overwhelming majority of Arizonans who file their own taxes believe they have taken advantage of every deduction, credit or savings possible, more than half of those admit they’re not tax-smart when investing.
The study from BMO Harris Bank showed that 56 percent of Arizonans do not hire professionals to do their taxes, and 87 percent of those said they’re confident with the job they did.
Yet BMO Harris Spokeswoman Carey Allen said a majority of those admitted they don’t understand important tax-smart investment solutions designed to help reduce their liabilities.
“Only 57 percent really felt that they understood how capital gains are taxed and only 58 percent of the respondents really understand how dividend income is treated from a tax perspective,” she said.
She said hiring a professional can help ensure that taxes are done correctly and efficiently.
The study also looked at where Arizonans plan to spend their tax returns.
“Nationally, 42 percent of the Americans surveyed are planning to use their refund to pay household bills or reduce their debt and that compares with 37 percent of the Arizonans surveyed,” Allen said.
Arizonans also trailed the national average when it comes to using their refund toward savings and investments by about 4 percent. Conversely, Arizonans said they would use their returns to fund vacations or purchase leisure items at a higher margin than the rest of the country did.