A Millennial Tax Season
- February 28, 2019
- by Barsz Gowie Amon & Fultz
Millennials often get a bad reputation, especially when it comes to embracing more adult tasks. In a world where technology helps solve seemingly every issue, millennials like to do things on their own – including their taxes.
Those who fall under the Millennial or Generation Z categories are in a unique position this tax season compared to most filers. Many have just graduated college, are starting out at a first job, beginning to save or invest, and are more likely than not, renting (but perhaps looking to buy a home). Many are also doing their own taxes for the first time, which can be a daunting task for anyone. Stressing about making a mistake or getting a full refund can make tax time even less enjoyable. If it’s your first time filing, all of us at Barsz Gowie Amon & Fultz are hopeful that this advice will help you through tax season.
Get started on retirement planning
Though many millennials may be just starting off at their first jobs, it is never too early to start thinking about retirement. It’s important to start fully participating in a company-sponsored retirement plan, whether it’s a traditional 401(k) or a Roth 401(k), as soon as you qualify. Participation includes a salary deferral which can reduce taxes now or in the future – or both! The decision to contribute to either of these plans can be complex, so it’s helpful to talk to an expert about all of your options.
Understand your deductions
Millennials are choosing to start their own business and work for themselves – and that can have many implications for tax returns. Some of this self-employment may be in order to support more traditional careers, or you may be fully self-employed. Either way, understanding the many legitimate deductions that accompany self-employment is essential to receiving a full return.
Talk to your parents
Tax planning can seem overwhelming the first time around, especially if your parents handled it for you for most of your life. If you’re a full-time student, or don’t have employment, your parents can most likely claim you as a dependent. But, if you’re taking on the “real world” on your own, consider talking to them about first steps you should take and experts you can confide in about your taxes. They’ve been doing it a lot longer than you and can offer helpful advice come tax time.
Examine your personal debt
As a recent college graduate, it’s possible you may have some hefty loans to pay. If you have student loans, auto loans, or any other personal debt, it’s crucial to examine how these loans can impact your finances for a return. If possible, you may want to consolidate some debt or look for a lower rate of interest. Regardless, it’s essential to stay on top of what current loans and debt will impact your filing.
While the tax process has never been simple, making sure you have the right advice can make tax season more manageable. Our CPAs at Barsz Gowie Amon & Fultz are happy to consult with you about your upcoming filing, and what changes you can make to ensure you get the best refund possible.