Common deductions young adults overlook

There are a large number of tax deductions and credits that Americans of most ages and income brackets can take advantage of. However, given the wide array of benefits available, many individuals overlook or forget to claim these tax breaks. This is especially true of young adults who are unfamiliar with the filing process and are still educating themselves on their taxes.

For example, many young adults who are in the process of repaying their student loans may not be aware that they can deduct up to $2,500 in interest payments. Graduates whose student loans are being paid for by their parents may still claim the deduction, but only if they are not being claimed as dependents on their parent's taxes. Young adults should keep an eye on their year-end interest statement, which they will need to provide to their tax preparer in order to claim the deduction.

Additionally, those who have been previously employed and are searching for a new job in their same industry may deduct the cost of job search expenses. This includes charges associated with printing and mailing resumes, headhunters or career placement services and travel costs associated with interviews. This benefit is not eligible to recent graduates.

However, graduates who have landed their first job and other workers who are relocating for a new position may qualify for the moving expense deduction, which allows them to write off a portion of their relocation costs. In order to be eligible, the location of the new office must be 50 miles further from their old home than their previous place of employment was from their old house. In addition, workers must be employed at least 39 weeks during the first 12 months after their arrival, but not necessarily with the same company.

Lastly, young adults who join the military reserves may be unaware of the tax benefits afforded to them. Reserve members often must travel to their base each month for drills and other services, and the IRS allows adults to deduct these travel expenses. Individuals must travel at least 100 miles from their home and stay overnight in order to qualify.

The first few years of filing taxes can be difficult for young adults, and educating themselves on their benefits while working with a licensed tax preparer can make the process easier.

Liberty Tax Service provides computerized income tax preparation and electronic filing. Each tax office offers customers audit assistance, a money back guarantee, and free tax return checking.

About Liberty Tax Service
Liberty Tax Service is the fastest -growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 8,000,000 individual income tax returns. With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.

Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start,” and ranks #1 of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax.