Lying on taxes: Who’s guilty of fudging their finances?

It’s tax time, which means gathering W-2s, proving your health insurance coverage and digging up deductions. But have you ever been tempted to fudge those deductions — for instance, saying you gave to charity when you didn’t, or maybe not declaring a little income from your side hustle?

If you’re anything like the vast majority of Americans, the answer is probably not, according to the latest research from the Finder Consumer Confidence Index.

Only one in six (16%) American adults says they’ve cheated on their taxes, yet that adds up to roughly 41 million fraudulent returns. And not all lies are created equal. Roughly one in 10 (a combined 11%) says they either sometimes (6%) or always (5%) lie when filing their taxes. A further 3% says they’ve lied on their taxes by mistake, and 2% say it was a one time thing.

Men more likely to cheat on their taxes

It’s sad to say, but when it comes to taxes, men are more dishonest, with men three times (24%) more likely to lie on their taxes than women (8%).

Younger Americans more likely to fib on their returns

Gen Y is the most likely to lie come tax time, with a touch over a quarter (27%) saying they’ve lied on their taxes. Some 10% say they either always or sometimes tell a fib when filing, 4% say they did so by mistake and 3% say they’ve lied once in the past.

Wild West cheats best

If HBO’s Deadwood has taught us anything, it’s that the West is known for gunslingers, outlaws and saloons filled with people cheating at cards. Today it’s tax evaders who have replaced the old card sharks, with 19% of Americans in the West admitting to cheating on their taxes.

The more you earn, the more reason to lie

Those earning six figures (37%) are more than twice as likely to have lied on their taxes than those earning under $100,000 (16%).

What are you hiding?

Of those who admit to lying on their returns, 31% say they’ve hidden additional income made from investments. Another 28% say they didn’t report income from a side hustle, while 13% say they’ve hidden their gambling winnings.

Men more likely to hide additional income

Men (34%) are more than twice as likely as women (16%) to keep their earnings from a side hustle off the books.

How many Americans expect a return?

Roughly 128 million (49%) of tax-paying Americans expect to get a return this year, with 51% planning to take that return and put it into savings. A further 32% say they will pay off debt, and 22% will just spend the money.

Women twice as likely to pay down debt

Of those expecting a return, 41% of women say they’ll take that money and pay off debt, compared to just 23% of men who say the same. Men (30%) are three times more likely than women (10%) to say they’ll invest their returns.

Gen Z: The saving generation

A majority of Gen Z (59%) say they will squirrel away their returns this year, while 42% of Gen X say they’ll use their returns to pay off debt.

How returns will be used around the country

Some 57% of those in the Northeast say they will put their return into savings, while 35% of those in the West will use their return to pay off debt.

Investing a priority for those earning over $100K

Those earning more than $100,000 (38%) are three times as likely to invest their tax return in 2023 as those earning under $100,000 (13%). Those earning under $100,000 (36%) are more than twice as likely as those earning over $100,000 (15%) to use their return to pay off debt.

Methodology

• Methodology

  Our data is based on an online survey of 2,179 US adults commissioned by Finder and conducted by Qualtrics/SAP from January 9 to February 17, 2023, with representative quotas for gender and age.

  We assume the 2,179 participants in our survey represent the US population of 259.2 million Americans who are at least 18 years old according to the July 2022 US Census Bureau population estimate. This assumption is made at the 95% confidence level with a 2% margin of error.

  Our survey asked people whether they expect to receive a tax refund this year, what they plan to do with that refund, whether they’ve ever lied when filing their taxes and whether they’ve had additional income they don’t report.

  We define generations by birth year according to the Pew Research Center’s generational guidelines, though we’ve combined baby boomers and the Silent Generation into a single group for sampling ease:

  • Gen Z — any adults born post-1997
  • Millennials — 1981–1996
  • Gen X — 1965–1980
  • Baby boomers — anyone born pre-1964

  We define geographical regions as defined by the US Census Bureau.

For all media inquiries, please contact:

Richard Laycock, Insights editor and senior content marketing manager

E: uspr@finder.com

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Written by

Richard Laycock

Lead Editor & Insights Editor

Richard Laycock is Finder’s NYC-based lead editor & insights editor, spending the last decade data diving, writing and editing articles about all things personal finance. His musings can be found across the web including on NASDAQ, MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University, including a semester abroad at The Missouri School of Journalism (MIZZOU). See full bio