Millennials and Income Tax

Money flying from wallet

It seems like every other day you see an article pop up on your Facebook timeline about millennials. Why millennials are ruining certain types of businesses, why millennials can’t afford to buy houses, or why millennials don’t want to have as many children as previous generations. Almost all of these articles seem to have an overall point that millennials are “privileged” or have some sort of unfair advantage over the other generations. So why is the millennial generation so emphasized and generalized?

What is a millennial?

First, you have to know what qualifies someone as a millennial. A millennial is someone born between 1980 and 2000. So anyone between the ages of 37 and 17, as of right now. This is the only characteristic of being a millennial. Often being a millennial is generalized to being identifiable by certain behaviors, when that isn’t actually the case.

What millennials pay in income tax

Older generations often complain that millennials are spending their money in the wrong places. Much differently than previous generations, millennials spend less money on real estate, vehicles, and expensive dining out. There’s actually a very simple reason for this. It isn’t that they don’t like to spend money, or that they don’t want to own nice things. No, the reason is simply that millennials don’t make as much money as previous generations.

On average, one out of three tax returns filed every year is from a millennial. On average, a millennial earns a yearly income of $22,000. This ranges from the younger millennials earning about $5,000 a year, and the older millennials(around age 35) earning about $44,000 a year.

If you think about the cost to buy a house, to regularly dine out, to buy a new car, it’s no wonder that many individuals in a younger generation don’t have to spend their money in these areas; they simply can’t afford it.

Millennials pay less income tax

But that’s only because millennials have less income. Especially considering that the cost of living is constantly rising, but that minimum wage and the average income is a relatively stagnant number, it would make sense that millennials have different financial priorities than previous generations did. However, the same thing is to be said of any generation. Every single generation naturally has a different set of priorities and goals than the generation before them. This is simply because the world is constantly evolving, and so the next generation of individuals has evolved as well.