Tax Breaks for 20-Somethings
Taxes can seem overwhelming when you're starting out. Here's an easy-to-read list of tax savings just for you.
Young adults who are strapped for cash can put more money in their pockets by taking advantage of tax breaks designed just for them.
Moving expenses. New grads can deduct the cost of moving themselves and their belongings to their first job out of school, as long as the job is at least 50 miles from their old residence.
| Row 0 - Cell 0 | Tax Savings on Your First Job |
| Row 1 - Cell 0 | Cost of Living Reality Check |
| Row 2 - Cell 0 | Recession-Proof Careers |
Saver's credit. Depending on their income, some young adults can trim their tax bill by up to $1,000 as a reward for contributing to an IRA, 401(k) or other retirement plan. The credit is available to singles with an adjusted gross income of less than $26,000 and married couples whose AGI is less than $52,000.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Student-loan interest. Young people can write off up to $2,500 of interest on student loans each year even if they don't itemize deductions. And now they can also write off student-loan interest paid by their parents. The IRS considers payments by parents on a child's loan to be a gift to the child.
Roth IRAs. Roths are primarily for retirement savings, but they're flexible enough to be used for a down payment on a house. You can withdraw contributions to a Roth at any time without paying taxes or a penalty. And after the account has been open for five years, you can also withdraw up to $10,000 of earnings tax- and penalty-free to buy a first home.
Tax forms. In order to get all of these benefits, it's important that young adults not file the Form 1040EZ. Filers can't claim the saver's credit, write off moving expenses or deduct student-loan interest on this simplified form. Instead, they should use the standard Form 1040.
-
My Top 10 Stock Picks for 2026Each year, we ask an expert to pick 10 stocks that have the potential to beat the market over the next 12 months. Here are his choices for 2026.
-
Special Report: The Future of American PoliticsThe Kiplinger Letter The Political Trends and Challenges that Will Define the Next Decade
-
We're Still Bullish on StocksWe're still bullish on stocks for 2026, but now is the time for investors to pull in their horns and dial down risk.
-
Retirees in These 7 States Could Pay Less Property Taxes Next YearState Taxes Retirement property tax bills could be up to 65% cheaper for some older adults in 2026. Do you qualify?
-
Estate Tax Quiz: Can You Pass the Test on the 40% Federal Rate?Quiz How well do you know the new 2026 IRS rules for wealth transfer and the specific tax brackets that affect your heirs? Let's find out!
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
Tax Refund Alert: House GOP Predicts 'Average' $1,000 Payouts in 2026Tax Refunds Here's how the IRS tax refund outlook for 2026 is changing and what steps you can take now to prepare.
-
New IRS Changes to FSA Contribution Limits for 2026: What to KnowHealth Care Flexible Spending Accounts have tax advantages worth looking into, especially in light of new IRS changes.
-
Is a New $25,000 Health Care Tax Deduction Coming in 2026?Tax Policy A proposal from GOP Sen. Josh Hawley adds to the chatter about health care affordability.
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
