Article | 2:26 min read

Are You a Millennial? Check Out These Tax Breaks

Budget and Save

Filing taxes isn’t exactly the most exciting thing to do, especially for a generation big on experiences and adventure like millennials.

A young woman reviews paperwork while on her couch

Many are not aware of some really beneficial tax breaks that come with being a millennial. Here are a few tax breaks that you shouldn't ignore if you are 18 to 35 years old.

Earned income tax credit
The earned income tax credit is available to working Americans with a low-to-moderate income. For those millennials just entering the workforce on a lower salary, this tax break could prove extremely helpful. The earned income tax credit is determined by income, as stated before, but it can also be determined by family size. While this tax credit was originally meant for families, recent changes mean some single filers can take advantage. Per the IRS, one-fifth of individuals still don't claim this tax break [1].

Saver's credit
Roughly 70 percent of millennials start saving for retirement at an unusually young age [2]. Just like the earned income tax credit, the saver's credit is a tax break for individuals with low-to-moderate incomes whom are saving for retirement. For those millennials who, again, are starting out at an internship or other low-wage job, this tax break could be beneficial. The saver's tax credit could be worth as much as $1,000 for an individual and $2,000 for couples [3].

Charitable contribution deductions
Millennials have an affinity for social activism and charitable donations, so it's fitting that they consider deducting all of their charitable contributions for their taxes. 84 percent of millennials made a charitable contribution in 2014, and 70 percent volunteered for at least one hour [4]. This tax break is perhaps one of the most common of the lot. It's important to remember to keep any receipts from donations, as this is the only way you can claim these deductions.

Lifetime learning credit
The lifetime learning credit is for college students who are at least part-time. In some circumstances, only one class can qualify an individual. It reduces tax bills on a dollar-for-dollar basis for a portion of the tuition and fees that a college student pays for themselves.

Moving expense deduction
Because those younger in age are more willing to travel or move for their job, millennials should consider checking out the moving expense deduction. The moving expense deduction covers individuals who have to relocate due to their job. The only requirements are that the new location must be a sufficient distance from the previous location and the mover must begin working as soon as possible. This deduction will even cover expenses like travel cost or the cost to rent a storage unit.

Whether you can use any of these tax breaks or not, it's always handy to be aware of your options if the need ever does arrive. For more tax information, check out Central Bank's Tax Center.



[1] Internal Revenue Service
[2] Millennials (With Jobs) Are Super Saving Their Way to Retirement, Time Money
[3] How to Claim Saver's Credit, US News Money
[4] Millennials Are More Generous Than You Think, CNBC


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