Sally Durdan

By Sally Durdan
Head of Strategy for Chase Consumer & Community Banking (CCB) Head of Strategy for Chase Consumer & Community Banking (CCB)

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How Is Innovation Changing Tax Season?

Creative solutions have increased total savings for families by almost $6 million.

Tax time can be a daunting experience for many Americans, but it also represents one of the most important financial moments of the year. That’s because tax refunds are often one of the largest lump sum payments families see on a yearly basis. In fact, according to the JPMorgan Chase Institute, on average, tax payments and tax refunds are even larger than the change in income individuals experience when they gain, lose or switch a job.

This can create a dilemma we are all familiar with – whether to capitalize on the new opportunity to save or use that extra money to pay down expenses or even treat ourselves.

While many view tax time as a challenge, it also marks an opportunity for people to take big steps toward improving their financial situation. Given the stress that often accompanies any big financial decision, people need tailored, ongoing guidance in order to maximize the opportunity it presents.

To further that goal, thousands of free tax preparation sites across the country ensure that low-income consumers can not only understand and maximize their refunds, but also take advantage of critical financial coaching and savings products. Unfortunately, in an environment of reduced resources, these sites are being forced to do more with less.

To help ease that burden and meet the needs of consumers, we need to develop new and efficient ways to create effective savings strategies through tax preparation – strategies that help individuals improve their financial health. And just as we know innovation can advance the ability to save and manage finances outside of tax season, it is imperative that we use those same strategies to integrate behavioral science and technology into tax preparation services to help serve more consumers and encourage more people to save. For example, the Refund to Savings program – supported by JPMorgan Chase –tests behavioral "nudges" in tax preparation software. They’ve learned that suggesting specific savings targets makes it more likely that filers will meet those targets and save more of their refund than they initially planned.

When presented with the information they need at the time they need it, we see people make more positive financial decisions. With that in mind, we’re also providing support so that more Volunteer Income Tax Assistance (VITA) sites working with low-income customers around the country can introduce what we are learning into in-person free tax preparation sessions and services.

Free tax preparation services serve as an entry point for the one-on-one financial coaching that families often desperately need. By leveraging the power of technology and innovation to further enhance the efficiency of these services, we can expand what we’ve learned to an even wider audience, creating increased economic impact and putting people on the pathway to long-term savings strategies and financial security.

About the author: Sally Durdan is Head of Strategy for Chase Consumer & Community Banking (CCB). She is responsible for developing an integrated strategy for Chase to address the financial services needs of U.S. consumers and small businesses, including banking, investments, wealth management, credit card, mortgage, auto and small business lending.