Tax Tips for Millennials

Tax season is here – or, more accurately, it’s been tax season for a while and it will be drawing to a close on April 18^th. If you haven’t started working on your own taxes, now would be a good time to start.

This isn’t new news for those in their later 20s and up. These age groups are used to the tax season song and dance, but older teens and younger 20-somethings that were just entering the working world for the first time in 2015 are typically completely unfamiliar with the system. Taxes can be a daunting experience for anyone, but millennials are the newest group of tax newbies who have to navigate the waters of the IRS’s constantly changing deduction and credit system.

If you’re in the millennial age group, it’s okay if you aren’t sure of how to do your taxes. It takes a bit of practice to fully get the gist of things, and some older 20-somethings still have to call mom and dad for tax questions. As long as you’re willing to do a little research and listen to some advice, you’ll be fine. Click HERE to get your 20% “Millenials Rock” discount off this years Tax Prep.

• If you’re still living with your parents, coordinate with them as much as possible. This isn’t just for the sake of a hand to hold or information. When you live with your parents, you may still qualify as a dependent based on how much money you made in 2015. If you made less than $3,900 a year, your parents can claim you, and this also effects your own tax information. In general, listen to their advice and knowledge – they are probably much more versed in tax lingo and mechanics than you are.

• If you’re still in school, this can also affect you and your parent’s taxes if you also still live with them. If you’re under the age of 24 and going to college or university full time, you also can be claimed as a dependent. If you’ve taken out any loans, these can be deducted up to $2,500. Tax credits also exist for students going to school full time in their first four years of college, like the American Opportunity or Lifetime Learning Credit.

• New college graduates who have to move to find work are also eligible for deductions related to their moving costs. Newly graduated students who move a certain distance to take a job can have the money it cost to move and drive household goods from one place to another deducted from their tax form – as long as you have been working in the new location for at least 39 weeks AND full time.

• Whatever major changes you go through in life, there is likely a tax credit or changed tax information that can apply to said change. Many millenials are going through major milestones – whether it’s getting married, having children or buying a home of their own. All of these new changes in life come with their own set of tax credits, like mortgage interest deductions or a $1,000 child tax credit.

• The key advice is to stay informed and researched on how tax law changes – both annually and for your situation. Research what you need to do about your tax filing when you get married or start living with someone. Remember to update your name and local records anytime there is a noticeable change.

• It’s always good to get a second opinion on your taxes. Your parents might be able to give you great advice and help on how to file, but going through a tax filing service or going over your numbers with an accountant consultation could never hurt. Getting a professional to give your taxes a once over can help you avoid any math or filing mistakes, and you could potentially have missed a deduction they can point out to you.

• Another general tip – don’t be scared. Sure, getting in touch with the IRS isn’t something people look forward to, but as long as you’re open and honest on your taxes and with anyone helping you file them, you should be fine.

Click HERE to get your 20% “Millenials Rock” discount off this years Tax Prep

Photo credit: rh2010 / Dollar Photo Club