April 18 is creeping ever closer, but you're not alone! Take these helpful tips.
Just like that weird smell coming from the back of the fridge, if you ignore your taxes, they won't go away.
I totally get it. Taxes can seem really stressful and intimidating. So much so that sometimes it's easier to just forget about them altogether.
But with a little prep and some research, the experience can be totally painless and, yes, even enjoyable.
If you're a recent grad or just young enough to remember the "Fresh Prince" theme song, there may be a lot of free money and deductions on the table. So put on your best grown-up face and get ready to do this. Because you totally can!
Now, whether you've already submitted your taxes for 2015 or you're thinking ahead to next year, keep these six tips in mind.
1. Get your act together.
Beginning in January of each year, you're going to start receiving some important tax forms in the mail (or electronically if you've set that up with your employer). The envelopes will usually say "IMPORTANT TAX DOCUMENT ENCLOSED." When you see it, stop what you're doing, grab the document, and put it in a safe place. If you're into fancy office goods, this is a perfect opportunity to splurge on a nice paper tray. However, any manila folder, Trapper Keeper, or padfolio will do just fine.
2. Call your mom.
Before you file, it's important to know whether or not your parents or guardians are still claiming you on their taxes. If you're a full-time student or living at home, you should really check in to make sure everyone is on the same page about your status.
(Plus, your mom remembers when you were really small, and she's going to be really proud and excited to hear that you're doing your taxes on your own. Let her have this.)
3. Look for tax credits and deduct like a boss.
First a quick terminology lesson. Deductions reduce the amount of income subject to tax while tax credits directly reduce the tax itself. Got it?
If a tax credit or deduction applies to you, you should strongly consider taking advantage of it. Here are some that many millennials often miss:
— Hit the books with the lifetime learning credit.
This tax credit allows you to deduct $2,000 of qualified education expenses. It includes things like graduate school tuition or courses you're taking to acquire or improve job skills. You don't have to be working toward a degree, and you can use this credit for as many years as you want. Still an undergrad? The American opportunity credit may be a better fit for you.
— If you're done with school but still paying, you can deduct student loan interest.
With this deduction, you can reduce your income subject to tax by $2,500. Like most tax credits, there are some income stipulations, but odds are good you fall under the umbrella.
— Going on job interviews? Deduct those fresh resumes.
If you spent time looking for a new job in your current field, then you may be eligible to deduct job search expenses. These include printing and mailing resumes (in case you're hunting for a job in 1975) and travel expenses. It's important to note, though, you can't claim this one if you're searching for your first job or if you've taken a big break after your previous job ended.
— Moving for work? Get reimbursed for that U-Haul.
Did you move more than 50 miles to take a new job? First off, congrats. Second, you may be able to deduct reasonable expenses you incur as a result of the move. This includes things like your plane or train tickets to get to your new destination, the storage unit you rented, the hotel you stayed in while traveling cross-country, and even the miles you put on your car. Save every last receipt and report your expenses on this form.
— The government may pay you to save for retirement. Take them up on it.
The saver's credit is meant to help middle and low-income workers save for the future. (You can check out this helpful table to see if you meet the income requirements.) If you do qualify, it's a chance to get a credit for contributing to an IRA or 401(k). You can also stack your benefits and take your credit alongside your tax deduction. Boom! Now we're talking.
4. Be sure to report your side hustle.
Drive for Uber on the weekends? Sell vintage tea kettles on Etsy? Win a few thousand bucks playing the ponies? You need to report all your extra income, along with gambling and contest wins to the IRS. And if you are a small business owner, you may be eligible for a few extra deductions or credits.
5. It's totally OK to ask for help.
You don't lose any adult-ing points if you need help doing your taxes. The U.S. tax code is complicated and filled with exceptions. If you bought a home, made investments, or just need help navigating some of the credits and deductions, it may be worth your time and money to talk to a professional tax preparer or accountant. If hiring a pro isn't in your budget, many communities offer free tax help from knowledgeable professionals and volunteers.
And if you already filed, no worries. Make an appointment this summer to see what receipts, forms, and documents you should be saving for next year.
So while death and taxes are pretty much certainties, this is not a season to dread.
Armed with all of your forms and a little inside knowledge, you can make tax time work for you. And in this day and age, you can even make the Internet work for you by asking a real, live CPA for advice or searching through more specific deductions to see if you qualify.
Just take your time, take a deep breath, and remember: