Tax Filing Strategies For Millennials

Roughly one third of millennials report asking friends and family for tax help rather than a tax professional, according to NerdWallet. Here are some more quick facts stated in the survey:

  • Millennials fear filing taxes more than most Americans.
  • Although millennials are generally far more computer-savvy than prior generations, they are also more likely to turn to paper than digital filing methods.
  • 80% of millennials in the study reported fears of making mistakes on their tax returns, failing to get a full refund, or overpaying.
  • 1 in 5 millennials said they weren’t confident they received the maximum possible tax refund.

Finding an experienced and certified tax preparer can eliminate these fears.

Hiring a Professional

Tax Filing Strategies For Millennials

Filing taxes isn’t easy, and one reason for this is most people just aren’t familiar with all of the legaleze that goes into them. There are also probably blind spots in terms of your specific tax obligations, as well as possible write offs, tax breaks, and benefits you can take advantage of.

To get the most out of your taxes, it’s usually a good idea to hire a professional. So how do you go about finding the right one for you? Do the following.

Be Sure To Find Someone With a Preparer Tax Identification Number

Anyone who prepares or assists in federal tax return preparation on a professional level is required by law to have a PTIN. 

“Professional” in this case means “getting paid for it” – volunteer tax preparers aren’t required to have PTINs. 

Ask for the number upfront, and make sure it is included on your return.

Find Someone Who’s Certified – CPA, Law License, or Enrolled Agent

Tax Filing Strategies For Millennials

PTINs are fairly easy to obtain. Real credentials take education and skill. 

Finding a tax preparer who is also an enrolled agent, public accountant, or licensed attorney will help ensure you get the most out of your tax returns.

An easy way to find credentialled tax preparers is through the IRS’ search directory, which does not include volunteers or people with just PTINs under their belt.

Find Someone With Experience

Generally speaking, you want someone with at least 10 years of experience preparing taxes, as the chances will be good that your tax preparer has dealt with similar tax situations that you’re facing. Another factor is that well-established firms have likely invested a lot of time learning the various ins and outs of tax law – they understand a lot of nuances that new preparers simply don’t.

A lot of tax laws are open to interpretation. A tax preparer with a lot of experience is more likely to explore gray areas with the goal of getting you the most out of your taxes.

Look For A Preparer With Clients Who Are Similar To You

This will help ensure they know how to meet your needs. 

Ask friends, family, or colleagues about their tax preparers. You want to get an idea of their methods, demeanor, and skills. 

Find The Best Deal

Most tax preparers charge an hourly fee. Find out how much your potential preparer’s are charging and compare prices.

Get this information by asking for a price quote. Many tax preparers will tell you they can’t determine their rate until they figure out which forms they’ll need. In these cases, you can show them the forms you completed the previous year to get a rough idea of how much it will cost.