Young taxpayers in the dark on 401(k)s and other tax-related benefits

Interesting article from CCH Internet Research NetWork™

Young taxpayers are significantly less likely to take advantage of tax-related benefits, are most likely not to know whether they are eligible to participate in benefit plans, and nearly one in five rate their employers as terrible in providing information about tax-advantaged planning, according to findings from a nationwide CCH CompleteTax survey.

"You generally can't avoid taxes, but there are some ways you can reduce them without a lot of pain. Unfortunately, taxpayers are still not as informed as they should be or participating as much as they could be to realize these tax savings," said David Bergstein, CPA, a tax analyst for CCH CompleteTax.

The survey of 1,290 U.S. adult taxpayers, commissioned by CCH and conducted by Harris Interactive, found that many taxpayers are not taking full advantage of basic tax-saving strategies and those 18-24 years of age are the least likely to be doing so. The biggest jump in usage of tax-advantaged programs occurs between the age groups of 18-24 and 25-34, with the percentage of individuals contributing to a medical flexible spending account (FSA) or 401(k) plan more than doubling between these age groups, and the percentage contributing to an individual retirement account (IRA) increasing 10 percentage points. The survey also found that 14 percent of all adult taxpayers are currently not saving for retirement.

Many employers will even match a percentage of your 401(k) contributions.