This is a guest post by Austin A.H. Jefferson; TaxBandits is an Authorized IRS e-file solution designed with small businesses in mind.
Filing taxes as a millennial can be somewhat of a challenge. You have to include things such as student loan payments, multiple streams of income [we millennials LOVE a good side hustle], as well as making sure you stay in compliance with the IRS just to make sure you keep “Uncle Sam” off of your back.
As tax season approaches, millennials are faced with the time-consuming task of filing their taxes, luckily there is an easier way. TaxBandits helps to change the way you file taxes, saving you time.
Here are 7 Tax Tips Every Millennial Should Know About:
1) File On Time
Whatever you do, make sure you file your taxes by the April 15 deadline. Your employers should have already supplied you with the necessary tax forms by January 31; so go ahead and get an early start in organizing your information to file on time.
2) File an Extension, If You Need More Time To File
If you’re busy and need more time to file, no worry! You can quickly file a Personal Tax Extension Form 4868 with our sister product, ExpressExtension, and receive an automatic 6-month extension of time to file.
3) Learn About Tax Write-Offs, Credits, and Deductions For Millennials
The great thing about filing a Form 1099, is that there’s an abundance of write-offs, credits, and deductions that you can report annually. Here are the most common tax deductions for millennials:
- Student Loan Payments (interest paid included)
- Educational Costs (continuing education costs included)
- Job Hunting Expenses (dry cleaning, resume printing, certifications, etc.)
- Moving Expenses (cost of movers, packaging, van rental, etc.)
- Business Expenses (phone, uniform, internet, gas mileage, etc.)
- Donations to Charity, Church, Alma Mater, etc.
Not sure where receipts for all of the things are? Review old bank statements online or PayPal and Cash App Transactions to find accurate amounts of these costs.
Do us a favor and share this blog with a millennial to help them have great tax filing experiences for years to come!
4) Know your income and have documentation
In order to file accurately, you must know your exact income. This total can easily be found on your W-2 and/or 1099 Form. If you own your own business and have to calculate your own income, review invoices from sales and transactions throughout the tax year.
Without an accurate total income, it will be extremely difficult to file your taxes correctly.
5) Understand the difference between Form W-2 and Form 1099
“What’s the difference between a 1099 and W-2?”
I’m sure this is a question you’ve asked or heard someone inquire about once before. While both forms can understandably be easily confused during the filing process, the simple rule is that 1099 Forms get filed for independent contractors while W-2s get filed for employees.
A Form W-2, Wage and Tax Statement, is filed when you need to report wages paid to your employees. Your employees will also have income, social security, or Medicare tax withheld reported on their W-2 form.
Form 1099-MISC, Miscellaneous Income, is filed for anyone who performed a service for your business and was paid $600 or more for their work. You also file Form 1099-MISC to report prizes won, rent payments, fishing boat proceeds, and attorney fees of $600 or more.
Little Known Fact: 1099s are very popular amongst Millennials along with entrepreneurship. Whether you’re a musician that has numerous gigs during the year or have a side hustle being an Uber/Lyft driver, caterer, etc., 1099s will become your best friend over the years.
6) Stay Organized, Easily File Your Taxes Next Year
Organization is KEY to successful tax filing. The more organized you are, the better.
As a millennial with multiple sources of income, I receive a few W-2s/1099s a year, along with important information for student loans, contribution statements, and the list goes on.
To stay organized I simply purchased a cheap, plastic folder (no affiliate link included here…haha)and store all of my tax-related documents there. When it’s time to file I have everything in one place which makes things 10,000 times easier!
7) Millennials Save Time Filing Taxes With TaxBandits
TaxBandits is the perfect solution for all of your tax filing needs, designed with you in mind – the small business owner managing their own finances.
TaxBandits offers the most simplified, interview-style e-filing process that helps to you on the right track with your taxes. With a single account, you have the ability to file multiple forms and access them at any time. Whether it’s Form W-2 or 1099, ACA Forms or Extensions, TaxBandits supplies you with everything you need to file for your business!
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Austin A.H. Jefferson is a Content Writer for SPAN Enterprises, parent company to TaxBandits, a leader in software solutions and mobile applications specific to IRS tax e-filing.