Tax Tips All Millennials Should Know
It is that time of year again. Have you saved all of your important receipts? Did you make sure to save the ones for your recently purchased boots and your work uniform? These are questions that older adults tend to make sure they can answer positively.
One of the things the millennial generation lost out on was learning how to file their taxes responsibly. While the internet offers ‘classes’ to help people calculate, a hands-on approach is a better learning experience when it comes to filing taxes.
For those of you still learning the ropes, here are a few tips for my fellow millennials on filing taxes:
1. Don’t Miss the Tax Deadline
I have been lucky enough to get my taxes filed on time every year that I’ve done them. There is nothing that causes a working class person more panic than worrying they missed the deadline to file.
The IRS collects taxes, yes, but will give you a grace period if you lack the funds for the tax bill at that time. But that can only be done if you make sure to notify them.
If you can, file your taxes in full and leave absolutely nothing out. Need an extension? Don’t hesitate to ask for one, but don’t pretend that ignoring the bill will make it disappear.
2. Choose The Right Tax Software
Not everyone’s taxes are complicated. The less property you have, the less you have to deal with regarding gathering together bills, money orders, and check stubs. There exist many DIY tax software programs that can help people with a simple tax situation.
Jackson-Hewitt and TurboTax are some of the more popular brands. H&R Block is also available and offers free online tax services to those who qualify.
The IRS also offers free software to anyone earning less than $64,000 a year.
3. Write off Side Hustle Expenses
If your primary employment isn’t the only way you make your money, then you might be able to deduct certain things meant for your side hustle. Have you bought anything new to help you conduct your business?
Did you buy a new drill to put the walls you’ve been repairing in others’ homes? Do you have a new printer connected for your remote data entry job? Each of these things might be tax deductible.
Consider everything that may be tax deductible as it will help lower your tax debt to the government.
4. Maximize Education Tax Savings
If you are working a regular part-time job and going to school, consider what’s paying for your books and the number of units you signed up for. Both the loans you take out to pay for tuition and the additional classes required are all tax-deductible items.
You can use DIY software to help determine what you qualify for, but I recommend going to a tax agent just to make sure it’s all done correctly. It helps save you the trouble of having to get multiple copies of one single document.
5. Deduct Job-Hunting Costs
If you are looking for a job and tax season is coming up, your job hunt-related expenses may get you a tax break. Resume copies and employment agency fees, for example, are items that may be tax deductible.
6. Block Out Time to File
Many people promise themselves they will not forget when it time to file taxes. Instead of relying on your ‘keen’ memory, mark in your calendar on the wall or in your phone a set of days you will work to file taxes.
Depending on what you are or aren’t claiming on taxes, appointments can take anywhere from a few minutes to a few hours. Give yourself a specific day to file taxes and have everything ready so you can avoid undue stress.
7. Double Check Your Calculations
The smallest mishap on your taxes could lead to bigger problems down the line. Listen to the pre-algebra teacher in your head and ‘check your work.’ Ensure that all possible deductions you qualify for are listed as well as all sources of income.
Make sure your student loans and associated school expenses are added as well. When I filed taxes through H&R Block’s free service, their software calculated the taxes I would pay and the return that I would receive.
Filing taxes is one of the least fun things we do as adults, but learning to do it well can save us money.