Here's What Every Twentysomething Needs To Know About Taxes
Make it easy on yourself and get the money you deserve.
1. If basically all your income is from a regular job that provides a W-2 form, you don't need to go to a tax preparer.
2. You can file your taxes easily with programs like TurboTax and TaxACT.
3. And these programs are (sometimes) free to use.
4. Still want someone to help with your taxes? See if there's a Volunteer Income Tax Assistance (VITA) site in your area.
5. If you're under 24, ask your parents if they're claiming you as a dependent.
6. If you're still in college, take advantage of opportunity credits that can give you a bigger return.
7. Even if you only made a small amount of money last year, it's worth filing your taxes.
8. Know the differences between a standard default deduction and itemized deductions.
9. If you do want to itemize deductions, have your receipts ready.
10. You can get a bigger refund if you've been paying down a student loan.
11. Having or not having health insurance can impact your return because of Obamacare.
There are 20,000 pages to the Affordable Care Act (better known as Obamacare), and trying to dig through them to figure out how having or not having health insurance affects your taxes would be ridiculous. Here's what you need to know:
1. If you could have gotten health insurance and didn't last year, you may have to pay a penalty of up to $95 for yourself or $285 or your family.
2. But, if you were uninsured for less than three consecutive months, you won't have to pay a penalty.
3. A tax penalty would be directly deducted from your refund or added to your tax bill.
4. If you don't have health insurance and need help paying for it, you can qualify for a premium tax credit and get a reduced bill for health insurance or cash back on your return.
Keep in mind, if you're under 26 years old and your parents have health insurance, you can still be covered by their policy. And you don't have to worry too much about knowing the details of the law, since programs like H&R Block and TurboTax include all of the changes and will calculate your taxes accordingly.