With the deadline right around the corner, doing your taxes can be daunting, particularly for millennials, but if you avoid making these rookie mistakes, the whole process will be a lot smoother.
For starters, don't overlook taking all the deductions you are entitled to.
Like many millennials, you may be cash strapped and trying to pay off student debt. Nineteen percent of Americans don't know what student-loan tax benefits they can claim, according to student debt-management website Student Loan Hero.
If your income falls within certain limits, you can deduct up to $2,500 of the amount of interest you paid on your loan for 2015. "At the end of the day you can save about $600 ... and have a little extra money in your pocket," said Andrew Josuweit, CEO of Student Loan Hero.
Here's a look at some other deductions and penalties, you might not be aware of:
As a millennial, you've probably moved around a time or two. If you've relocated for work and your employer didn't cover the moving costs, you may be able to write off some of those expenses, including traveling to the new location or transporting your furniture. The rule generally applies if you work full time and your new workplace is at least 50 miles away your old home. Deducting that move could lower your taxable income by thousands of dollars.
Or if you work from home, you could claim a home office deduction. Just be sure the office is an actual office and not a spare bedroom. To simplify the calculations, you can claim up to 300 square feet, at $5 a square foot, with no itemization or documentation necessary.
Are you a freelancer with multiple sources of income? Documenting your business expenses and determining what you can deduct can be complicated. Here's where professional help might be in order, Josuweit said. One mistake to avoid is being overly ambitious in thinking you can do it all yourself.