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Tax Tips for 18-25 Year-Olds

Last month, TurboTax did a series of tax tips for 18-25 year-olds called “These Aren’t Your Parents’ Taxes.” These tips are short, sweet, and to the point – and they may be helpful even if you’ve already filed your taxes for this year. So if you’re in that age bracket, give them a read:

  1. Education Credits – If you’re no longer being claimed as a dependent, but you’re still in school, pay attention to these credits!
  2. Student Loan Interest and Do I Really Need to File? – Once again, if you’re not being claimed as a dependent and you paid student loan interest, there may be a deduction for you. And if you didn’t make a lot last year, you may not need to file… but you also may be eligible for a refund, so you should at least go through the process and see.
  3. Moving Expenses – The rules for this are a little wacky, so read this tip carefully to see if it applies to you.
  4. Individual Retirement Account (IRA) Deduction – Retirement may seem a million miles away, but contributions now may be tax-deductible, so you could help yourself now and later by making contributions ASAP. (Also, you’ll put compound interest to work for you!)
  5. What Paperwork Do I Need In Order to File My Return? – If you haven’t done your taxes yet, this is a good guide to what you’ll need to have in front of you before you start.
  6. 401(K) – Just a reminder from me (Stephanie): if your company offers a 401(K) with matching contributions, and you’re not contributing to it, you’re literally saying no to a part of your salary. Do not turn down free money! Sign up today!
  7. Your W-4 – What is this strange piece of paper? What are exemptions? Definitely useful info whenever you get a new job. I also wrote about filling out your W-4 in my “Graduating?” series.
  8. Renter’s Credit and Take Home Pay – Some states give you a tax credit for renting? I didn’t even know that. Sweet! Also, a reminder that your gross salary is not how much money you’ll get, and a breakdown of the taxes that will be taken out.

All-in-all, some sweet tips from TurboTax. Happy taxes!

Anyone have any additional tax tips to add for the college crowd or recent grads?

7 responses to “Tax Tips for 18-25 Year-Olds”

  1. Weekly Round Up: Mint Edition

    [...] Tax Tips for 18-25 Year-Olds [...]

  2. Eric

    Nice roundup. I didn’t even know TurboTax had a blog. I just subscribed!

  3. Grant Baldwin

    I love Turbo Tax and have been using them for as long as I’ve been doing my taxes…great product! Good list of tips…thanks for bringing it to our attention Stephanie!

  4. Warren

    One thing that is not well highlighted – even by TurboTax, though it does technically walk you through it – is that scholarships in excess of tuition, books, and required fees counts as taxable income. Many times, scholarships cover the extra, necessary expenses for going to school as well: namely room and board (whether in the dorm or off-campus). Any scholarship that pays for this IS taxable income and you are required to pay taxes on it. I was hit with a $700 tax bill one year (wouldn’t have been that way if my had claimed myself instead of my mother claiming me as a dependent)!

  5. Rebekah

    Turbotax has changed their website so all your links are dead. Can you update this post? Thanks!

  6. Patrick R. Carlson

    It’s a good idea for everyone to brush up on their taxes every so often. Planning your taxes can result in a faster tax preparation process and lower tax burden.

    Rather than waiting until the end of the year, you should make sure you are on track. Take a look at what your return is going to look like, at the very latest in December. That way you still have time to make charitable contributions or gather paperwork that may be necessary at filing time.