It’s that time of year again: tax season.
As soon as W-2s begin arriving in the mail, employees across the country are forced to take a deliberate, realistic look at their financial situation. It’s a time to review one’s employment situation, budget, spending, and overall progress toward long-term financial goals. In other words, it can be a stressful time for many.
Tax season raises these complicated feelings every year, but 2019 is already experiencing more tension than years past. In the wake of a contentious political battle over tax policy, Americans are faced with the difficult task of parsing out how new laws will impact their bottom line. And the impact is certainly real: for the 2019 filing season, the IRS reports that refunds are down 8%.
This news comes at a time when Americans are more stressed about finances than ever before – and that stress isn’t put on hold for the work day. Handling rising living expenses and increasing healthcare costs is a constant concern for many employees and that has a direct impact on their performance at work. This reality gives employers the opportunity to find ways of lessening the financial concerns of their employees. After all, engaged employees do the best work.
Tax season is the ideal time for employers to demonstrate empathy by providing much-needed resources. Even major tax preparers like H&R Block are answering this need: the organization is holding empathy training with their tax preparers, prepping them to speak with overwhelmed taxpayers and help them navigate the new tax legislation. Empathetic employers would do well to follow this lead and ensure HR professionals are ready to discuss finances with employees from a place of understanding.
Providing a tax season support program may seem like additional work for busy HR departments, but doing so can pay dividends even after April 15th. For businesses looking to show empathy in daily operations, tax season may just be one of the timeliest opportunities to do so.
How can employers support employees during tax season?
Here are a few things you can do now to assist employees before the filing deadline:
- Develop a communication campaign. In 2017, almost half of Americans didn’t know what income tax bracket they were in. And more than half don’t know what changes are coming for them under the new tax rules. In other words, the opportunity for HR departments to increase employees’ financial literacy about taxes can start with the basics. Building an email campaign in the weeks leading up to Tax Day can help get employees thinking about their tax strategies, while serving to fill in the blanks of their knowledge. Emails can be as simple as a list of frequently used terms, a cheat sheet of tax changes to note, or reminders about the filing deadline.
- Offer personalized resources. With four generations in the workforce, a one-size-fits-all tax support program won’t quite hit the mark. For younger workers, relying on a tax refund may be a way of staying afloat financially or making a dent in student loans. As retirement nears for older workers, the importance of optimizing their investments looms large. Ensure that any resources you share keep in mind that your employees may all be approaching tax season with different levels of experience and a range of expectations for what tax season means.
- Remind employees of the value of their benefits. Tax season inherently draws attention to paycheck income, but HR professionals know that there’s more to the picture than that. Benefits packages represent a significant portion of the total compensation employees receive, though that reality can be easily overlooked. Encouraging a holistic view of finances that goes beyond the numbers on the W-2 can highlight the full picture of employees’ financial health, as well as start the conversation about how to think ahead toward this time next year. After all, benefits such as HSAs and commuter benefits may be underutilized if the real tax value they provide isn’t understood. Tax season can serve as a catalyst for boosting interest and enrollment in these plans.
To learn why HR needs to know how employees feel about money check out our white paper below about financial well-being.