If you are a young person in their 20’s, worrying about taxes is probably one of the last things on your mind, especially if you are single and renting or still living at home. For the most part, it may seem like you are ineligible for any sort of meaningful deductions that would make a difference. However, your Maggi Tax team is here to help you understand that this may not actually be the case.
Today, we are here to take some time to share with you some important tax deduction information that can help you save money on your taxes even if you are in the situation above. We invite you to stick with us and learn about some deductions that you will not want to overlook! So just where can you stake your claim?
INVEST IN YOUR FUTURE
Investing in a Roth IRA or 401K can be a smart move, especially if you are younger, as with any investing, the more time on your side the better. With these investment plans, you can put away money efficiently in a tax-advantaged account that will save you tax dollars in the long run.
RELOCATION EXPENSES FOR A NEW JOB
Many adults in their 20’s are entering the workforce and moving away from home to start their lives. These relocation expenses do not have to be itemized if they meet the following criteria.
-You are moving mainly for employment
-You are moving permanently
-You are moving at least 50 miles from your current residence
If this is you, this is a great above-the-line tax deduction you can claim that will be taken off your adjusted gross income.
According to tax law, you must report all income to the government regardless of source or amount. Therefore, whether you are running an Airbnb or snapping photos for some side income. With this being said, typically many of the expenses associated with this extra income can be written off, thus lessening your tax liability.
These days, very few 20-somethings come out of school without some sort of student loan. All the interest that these loans accrue annually can be deducted from your taxes, even if your parents or another party have made the payments. The exception to this rule is if you have been claimed as a dependent on the loan holder’s taxes.
LEARNING FOR LIFE
Here at Maggi Tax, we are huge proponents of lifelong learning, so we are more than happy to share that you can deduct educational expenses incurred throughout your life if they are helping you advance in your professional career path.
Adulting can be a lot sometimes, but with our friendly and knowledgeable Maggi Tax team around, we can help you with all things tax-related, because that is not something that is ever going away. For more information about taxes and financial planning, stay tuned to our blog or reach out to the great crew at Maggi Tax today!