As a young adult, taxes can be daunting and intimidating. You may not know the first place to start when it comes to filing your taxes or navigating the tax code. That’s why we’ve put together a few tips from a professional tax accountant that will make the process a little easier and less stressful.
Keep Accurate Records
The most important thing you can do is keep accurate records of all income and expenses for your individual or small business income. Make sure to store all documents related to filing in one place and have them readily available when it comes time to file. This includes digital copies of receipts, invoices, contracts, bank statements, etc. Keeping accurate records will save you time and make filing easier once the deadline rolls around.
Take Advantage of Tax Credits and Deductions
Tax credits and deductions are designed to help reduce your taxable income by lowering your overall tax burden. Some common examples include student loan interest deductions, health care credit, childcare credit, retirement savings contributions, etc. Make sure you are taking advantage of any credits or deductions that you qualify for to get the maximum return on your taxes.
Know Your Filing Status
Your filing status determines which forms you need to fill out and how much you owe in taxes each year. The IRS has five main categories for filing statuses — single, married filing jointly or separately, head of household, qualifying widow/widower with dependent children — so make sure you know which one applies to your situation before filing. Additionally, there may be additional forms that need to be filled out depending on your unique circumstances (i.e., if you’re self-employed).
When it comes time to file taxes each year as a young adult (or anyone!) following these three tips from a professional tax accountant can help ensure that everything runs smoothly and efficiently without any surprises or delays at the end of the process: keep accurate records; take advantage of applicable tax credits & deductions; know your filing status; and familiarize yourself with relevant forms & paperwork required for filing taxes each year. Taxes don’t have to be complicated! With these helpful tips in mind, you’ll feel confident navigating this important process come April 15th every year!