As a millennial, you might owe student loans and manage multiple jobs. Because of this, filing your taxes may become difficult every tax season. In order to help you, we have listed eight crucial tax tips for filing taxes when you have various financial responsibilities and multiple streams of income.
Following Are Some Tax Tips for Millennial’s
- Never miss the tax deadline
Always file your taxes within the time’s frame provided by the IRS. The IRS doesn’t mind if you need more time to pay your tax bill or if at that time, you don’t have sufficient funds available, but you must take proper steps to inform them of the situation.
Decide what to do: File your taxes completely, apply for a payment plan or request an extension. Whatever route you take, don’t ignore the situation. In the case you miss the tax deadline without informing IRS of the situation or requesting an extension, you could be liable for heavy penalties, interest charges, and late fees.
- Choose reputable tax software or Accountant
There are many tax programs available that offer important tax tips, so shop around to get a good deal. There are many options for qualifying for free filing services, for example, if you earn less than $64,000 each year, the IRS offers taxpayer the access to free software to file taxes at no charge. Should you want someone to do it for you; many accountants offer their services this time of the year.
- Write off job-related expense
Another important point on this tax tips list: Being a tax payer, you should learn to correctly file taxes for the income you earn. If you spend money for job-related items, you may be eligible for extra considerations. For instance, if you purchase office equipment or supplies, these costs can be deducted from your tax return. This reduction would reduce your taxable income, which means you owe less to the government.
- Maximize education tax savings
Nearly all education cost is tax deductible. Whether it’s the cost of your additional classes or interest paid on your student loans, these are tax deductible.
To see which ones you qualify for, list out all your higher education expenses and talk to a tax professional who can offer you tax tips.
- Inquire about the saver’s credit
The IRS wants people to stash away their money in retirement savings account, therefore they introduced a tax credit called the Saver’s Credit. The Saver’s Credit is often overlooked by tax professionals and other taxpayers, but it can work in your favor and can reduce your tax bill at the year end. The amount of tax credit you qualify for depends on your (adjusted) gross income. Generally the credit amount is 50%, 20%, or 10% of your retirement savings up to $2,000 (or $4,000 if married).
- Deduct job-hunting costs
Do you believe that you can also deduct your costs related to job hunting? Yes, it’s true and possible. If your new job is related or included in your current career field, tax deduction can be claimed. Job search costs that may be eligible for tax deductions include:
- Resume copies
- Business travel expenses
- Employment agency fees
- Dry cleaning
- Certifications or classes
- Make time to file
Instead of rushing through the tax filing process, it would be best if you actually schedule a time to file your taxes. This is one of the best tax tips to focus on.
The tax filing will only take you a few hours, so do not wait until the last minute. Schedule a time in your calendar, so you don’t feel stressed.
- Double check your tax calculations
When it comes to filing your taxes, even the smallest calculation should be thoroughly reviewed. Do not rush to submit your return and make sure to take your time to double check your calculations. You do not want to be audited later. Here a few things you should check:
List down all the deductions you are eligible to
List down your sources of income
higher education expenses and retirement contributions are something you should consider
In closing, doing your taxes is not a fun task, but taking proper care and time to file your returns can save you time and energy in the end.
United Financial Counselors can guide you acheive results from these tax tips. Should you have any questions, please visit us at UnitedCounselors.org or contact at 954-372-4370.