Most people don't enjoy filing taxes, but apparently, younger workers are the most likely to fear the process outright. An estimated 80% of millennials worry about preparing their taxes, according to data from NerdWallet. Specifically, they fear making a mistake and not getting a full refund. If these concerns are keeping you up at night, here's how to alleviate them this tax season -- and complete that return without breaking a sweat.
Avoiding tax return errors
If you want to decrease your chances of making a mistake on your taxes, there's one easy step you should take: File electronically. The IRS reports that the error rate for returns filed on paper is 21%, whereas it's less than 1% for electronic returns. Though filing electronically won't prevent you from copying the wrong number from a tax form onto your return, it can help you avoid falling victim to misguided math. NerdWallet reports that 17% of tax filers aged 18 to 34 file paper returns, compared to just 8% of those 35 and older, so if you're planning to take the old-school approach, you may want to rethink it.
Another way to avoid errors is to leave yourself enough time to review your tax return before submitting it. In other words, don't wait until the very last minute to file your return; rather, get it done at least a few days ahead of the deadline, and then go back to it with a fresh set of eyes. Some common mistakes to look out for include the following:
- Putting the wrong name on your tax return (this might happen if you're newly married or divorced)
- Botching your Social Security number
- Listing the wrong filing status
- Forgetting to list income (such as interest received from your bank or freelance earnings from a side gig)
All of these errors could cause your return to get audited or rejected, but if you're vigilant about avoiding them, you're less likely to run into trouble.
Getting the money you're entitled to
If you're expecting a tax refund this year, you're not alone. Typically, around 80% of filers wind up getting money back from the IRS. But to avoid losing out on money you're entitled to, you'll need to be careful about claiming deductions and credits. Though the former generally only applies if you're itemizing on your return, keep in mind that there are certain deductions you can take without itemizing.
Meanwhile, there are a number of potentially lucrative tax credits out there that could put money back in your pocket if you wind up being eligible. Unlike a deduction, which merely exempts a portion of your earnings from taxes, a credit is a dollar-for-dollar reduction of your IRS liability. If you're a lower earner, you might look into the Earned Income Tax Credit, which can be especially rewarding if you have several children in your household.
Speaking of children, earners below a certain threshold can claim the Child Tax Credit for kids under 17. And if you pay for child care in order to work, there's also the Child and Dependent Care Credit to explore.
Finally, if you're a student, you might look at the Lifetime Learning Credit or the American Opportunity Tax Credit. Both of these could slash your tax bill, thus ensuring that you get the maximum refund from the IRS.
Though filing taxes isn't exactly fun, there's no need to worry about it excessively -- especially if you leave yourself ample time to tackle that return. But don't delay: You only have until April 17 to file your 2017 taxes, so the sooner you get started, the less stressed you're apt to be about the process.