Even Americans who wind up with refunds find doing taxes unpleasant, but research indicates that full digitization of the tax-prep process—from assembling documents to filing and writing that payment check—would help most taxpayers find the process a little less odious.
According to analysis by Adobe Digital Index (ADI), though the IRS announced earlier this year that 80% of Americans will receive a refund, consumer sentiment, thus far, regarding their taxes remains mostly negative.
“That disparity tells you the majority of consumers don’t feel positive about doing their taxes, regardless of whether they are getting a refund or not,” said Tamara Gaffney, principal at ADI. “Although we are seeing the digitization of a fairly difficult process for most Americans, the nondigital piece—gathering all the documentation needed—is holding many Americans back from finishing their taxes in one sitting.”
Based on ADI data, according to Gaffney, the largest day for starting tax preparation online is Monday, presumably while people are at work. Most taxes are completed and submitted, however, on Saturday, indicating that taxpayers are spending the whole week gathering the necessary paperwork.
With tax-filing and financial-management sites continuing to grow in popularity—up 34% year over year in 2015—ADI says the financial institution that figures out a way for consumers to track all of their necessary documents online, and e-file from the same place, will win. Consumers have become increasingly comfortable conducting financial business, such as taxes and retirement account transactions, online, with 80% growth since 2013.
ADI’s analysis is based on aggregated and anonymous data from 667 million visits to tax filing and financial management sites. Social data is from information captured through social media platforms, spanning 165,000 tax-related social media mentions.
According to the findings, filing taxes is the next frontier for mobile. In fact, one in four visitors to tax-filing and financial-management sites are visiting via a smartphone or tablet.
Tax-filing and financial-management online visitor growth exploded during the last week in January, up more than 500% compared with the first week of January 2015. The level of visitor traffic is contingent on release dates of certain tax forms.
Despite the early start, the report also finds that while tax preparation has become easier, it’s still not a task most Americans are eager to do. That’s why the majority wait until the very last minute to file.
According to ADI, consumers who receive tax returns are eager to spend this money and should be targeted by marketers.
“There are two different tax scenarios marketers can target,” Gaffney told CMO.com. “The first is those individuals who have easy tax preparations. They only have a few forms to collect, and they are definitely getting a return. Marketers—and I mean all marketers, not just financial services marketers—can target these individuals, who are the first of the batch to receive their refunds in early February.
“The second situation are consumers who are unsure of how much they will owe and are holding off on discretionary spending; [they will] know at the end of March how much they can spend on nonessentials. Marketers should look to market to their consumers right before the tax deadline of April 15.”
About Adobe Digital Index
Adobe Digital Index publishes research on digital marketing and other topics of interest to senior marketing and e-commerce executives across industries. Research is based on the analysis of select, anonymous, and aggregated data from over 5,000 companies worldwide that use the Adobe Digital Marketing Cloud to obtain real-time data and analysis of activity on websites, social media, and advertising.
About Adobe Digital Insights
Adobe Digital Insights publishes research on digital marketing and other topics of interest to senior marketing and e-commerce executives across industries. Research is based on the analysis of select, anonymous, and aggregated data from more than 5,000 companies worldwide that use the Adobe Digital Marketing Cloud to obtain real-time data and analysis of activity on websites, social media, and advertising.
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