You know that feeling you get when Sunday night rolls around? Your mind starts shifting from the weekend glow to the reality of meetings, emails, and deadlines waiting for you in the morning. That’s the Sunday scaries.
Now, imagine that feeling…but for months. That’s tax season for a lot of people.
The tax scaries are so real that a recent study found that just the thought of having to file taxes makes 30% of Americans want to cry. With confusing tax documents, looming deadlines, and the fear of owing money, it makes sense.
But here’s the good news: HR teams can ease the tax season panic. They can provide clear and helpful resources to help employees navigate their taxes without the stress (or the tissues).
Setting Your Employees Up For Tax Season
HR teams may not be experts, but they are the first line of support in helping employees navigate tax season. And while HR cannot provide specific tax advice, there are plenty of things they can do for their staff.
1. Clarify Tax Documents and Withholdings
Tax forms can be confusing. Many employees might feel like their W-2 is written in another language. A lack of understanding of all things tax-related can lead to errors when filing a return, unexpected tax bills, or missed refunds.
HR teams can bridge the knowledge gap by breaking things down into plain language before tax season begins. Starting things off can make all the difference in quelling the tax scaries.
Here are some things every employee should know:
- W-2 forms summarize total earnings and tax withholdings. Employees should receive them by January 31 by mail or payroll portal.
- Paycheck deductions include federal and state taxes, Social Security, Medicare, and pre-tax benefit contributions.
- W-4 adjustments are modifications to withholdings to avoid owing money at tax time or overpaying throughout the year.
HR Action Step
✔️Host a quick explainer session on W-2s and paycheck deductions.
✔️Send a digital postcard to reinforce how to access and interpret tax documents.
✔️Remind staff to review their W-4 forms annually. Major life events like marriage or having a child can affect how they should complete it.
A solid understanding of tax forms helps with accurate filing and avoiding surprises that none of us want.
2. Promote Pre-Tax Benefits to Lower Taxable Income
It’s common for people to overlook simple tax-saving opportunities available through employee benefits. HR teams come to the rescue when they highlight the simple opportunities available to help maximize earnings with pre-tax benefits.
Consider this: A single employee who earns $60,000 contributes $2,500 to an HSA and $5,000 to their 401(k). Doing this reduces their taxable income by $7,500 and potentially saves hundreds or thousands of dollars on their tax bill.
These are a few pre-tax benefits to promote:
- 401(k) and 403(b) contributions have the double benefit of lowering taxable income while saving for retirement.
- Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) are tax-free dollars for medical expenses.
- Commuter benefits allow for pre-tax deductions for parking and transit costs.
HR Action Steps
✔️Send out reminders before the end of the year about FSA and HSA contribution deadlines.
✔️Share real-life savings examples of what savings can look like for your staff.
✔️Offer printable materials or a microsite of how pre-tax benefits work and who qualifies.
3. Communicate Tax Prep Deadlines and Resources
Employees juggle a lot. Work, family, and finances are just the start. Tax deadlines aren’t always top of mind. That’s exactly why HR teams should take the lead and send reminders early and often.
Start with a simple “Don’t Miss These Tax Deadlines” email in January to prevent last-minute panic.
Here are some dates to highlight:
- January 31: W-2s must be distributed.
- April 15: Federal tax filing deadline (or later with an extension).
- April 15: Last day to make prior-year contributions to an IRA or HSA.
Free tax resources are another important thing to share:
- IRS Free File is a no-cost option for those earning under $84,000.
- VITA (Volunteer Income Tax Assistance) is a free tax preparation program for those who are low-income, disabled, or are limited English speakers.
- Employer discounts on tax software are a benefit some companies offer. Employers can give corporate discounts for TurboTax or H&R Block.
HR Action Steps
✔️Post tax deadlines on the company intranet or HR portal.
✔️Send a mid-January email with a list of documents employees need to file.
✔️Provide a “Where to File Your Taxes” guide with links to tax prep resources.
Helping Employees Navigate the Process
With a solid foundation laid, it’s go time. Offering real-time support helps employees file with confidence.
4. Offer Hands-On Support
To ease tax season overwhelm for your employees you can offer real-time assistance. Workshops, digital assets, and expert-led sessions can prove to be invaluable.
One example is a “Lunch and Learn Event.” A financial advisor or tax expert can help employees understand the basics of tax filing, how to avoid common mistakes, and answer specific questions. This simple meeting can make them feel supported and ready to tackle their taxes head-on.
Those with more complex filings will benefit from a tax preparation discount or referral to a trusted tax professional.
HR Action Steps
✔️Host a Lunch and Learn Event to address employee questions all at once.
✔️Set up a hotline or email where your staff can get answers to basic questions.
✔️Partner with a tax prep service to offer employee discounts.
5. Educate on Common Tax Mistakes to Avoid
A simple mistake on a tax return can lead to delays, unexpected tax bills, or penalties. HR teams can help employees file with confidence by warning them about common pitfalls.
Here are some to consider:
- Under-withholding taxes is a horrible realization some come to in April. Those who don’t withhold enough throughout the year may end up owing the IRS money. Encourage them to review their W-4 and adjust withholdings if needed.
- Missing deductions and credits are common. People often overlook these:
- Child Tax Credit
- Student Loan Interest Deduction
- Earned Income Tax Credit (EITC)
- Side hustle earnings over $600 must be reported. Employees should track and file 1099 forms correctly.
- Filing late or incorrectly can come from simple errors. Incorrect Social Security numbers or forgetting to sign electronic returns can cause processing delays.
HR Action Steps
✔ Share a “Top 5 Tax Mistakes to Avoid” checklist with employees.
✔ Provide resources on how to claim commonly missed tax credits.
6. Leverage Technology for Easier Filing
Tax filing is no longer a paper-and-pencil process. Digital tools and apps are the way to go, especially when they’re free.
Online platforms offer step-by-step guidance that can simplify the process. IRS Free File is a great option for those who qualify and prefer to file themselves.
Creating a resource hub provides a one-stop shop for all things tax season.
HR Action Steps
✔ Provide links to trusted tax filing software and professionals.
✔ Create an internal tax hub with guides and FAQ sections.
Building Long-Term Financial Wellness
Tax planning isn’t just about April. Making it a year-round effort alleviates the headaches and dread when filing. Encouraging proactive tax planning and refining HR resources can help improve your employees’ tax season experience.
7. Encourage Year-Round Tax Planning
Although it might not feel like it, tax season isn’t a once-a-year event. Financial decisions made throughout the year impact the outcome. Those who plan ahead capitalize on savings opportunities. The alternative, well, can be the stressful realization that they owe money.
Mid-year tax reviews can help course correct before it’s too late. For example, those who owed money last year can review and update their W-4. Others can contribute more to their 401(k) or HSA to lower their taxable income before the deadline.
HR can remind employees to check in on their tax situation at least twice a year.
HR Action Steps
✔ Send a mid-year reminder of tax check-ins employees should do.
✔ Hold a session to check in and make sure staff understands all of their options.
✔ Share paycheck calculators and withholding estimators.
8. Conduct a Post-Tax Season Review
As with any good learning experience, reflection is an often overlooked but massively important step. Most people want to forget about tax season. HR teams can break the cycle of repeated challenges by conducting a post-tax season review. Gather employee feedback and refine the resources for next year.
Things to consider:
- Analyze common mistakes: If multiple employees report issues with W-2s or misunderstandings about deductions, HR can tailor next year’s tax guidance accordingly.
- Survey employees: What tax-related challenges did they face? What resources were most helpful?
- Update resources: If employees frequently ask the same questions, create an FAQ page or a simple explainer document to address them in advance next year.
- Refine communication timing: Did reminders go out too late? Were employees aware of all their tax-saving options? Adjust next year’s approach based on engagement and feedback.
HR Action Steps
✔ Send a brief employee survey after tax season to identify pain points.
✔ Update tax resources and FAQs based on common employee concerns.
✔ Adjust next year’s communication plan to improve clarity and timing.
A Stress-Free Tax Season Starts With You
Tax season doesn’t have to feel like months of stress and uncertainty. With the right approach, it can be just another item on the to-do list.
By providing valuable resources, HR teams can transform tax season into an opportunity for financial empowerment. The more proactive the approach, the less stressful (and scary) the experience is for everyone.