Are young people adequately prepared for tax season?

preparedAdult life on one's own comes with a massive amount of responsibilities, and those in their 20s and early 30s in particular may not be as prepared as they might think to tackle the coming tax filing season in a manner that is responsible and going to ensure that they're in the best possible position to avoid a massive bill. 

There are a number of credits for which millennials in particular may find themselves eligible, and knowing about them can be wise for anyone planning to save some money by doing taxes on their own before taking them to a professional, according to a report from Scripps Digital. Perhaps chief among them is the earned income credit, which is available to single people with no children. Further, they might also be able to write off some of the costs of their ongoing higher education through the American opportunity tax break, as long as they have an income of less than $80,000, or $160,000 in the case of married couples filing jointly. However, this is only available to those in the first four years of their college careers who are at least half-time students. 

Another tax break, which often goes unused by people of all ages, is referred to as the saver's credit, the report said. Young people with incomes of $29,500 for singles, $44,250 for heads of household, or $59,000 for those married filing jointly may be able to write off some of their contributions to 401(k) accounts. 

Knowing is half the battle
Of course, not all young people are eligible for every tax credit they think might or should be available to them, obviously, and thus they need to do more to make sure they know exactly where they stand, the report said. They can do so either using the IRS website themselves, or with the help of a tax professional who is likely to be extremely well-versed in the kinds of deductions just about anyone can claim. They should also make sure they know exactly what documents they will need to file everything properly.
 

Young people should also keep in mind that the recent government shutdown has pushed back the start of filing season to the end of January, but that they should still try to prepare as early as possible. 

For a more in-depth look at Liberty Tax Service, visit the Give Me Liberty! Magazine. Follow Liberty Tax on Facebook and on Twitter or contact Liberty Tax directly at 1-877-at-Liberty. 

Posted To: Tax Ranger's Blog By: Tax Ranger On: Friday, January 17, 2014
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