These Aren't Your Parents' Taxes (Part 2) — Student Loan Interest and Do I Really Need to File?

The Top 10 Things for 18-25 Year-olds to Know About Taxes

Last time I talked about Education Credits.  And, while I promised that I’d talk about something different than education, there are a lot of breaks when it comes to the money surrounding secondary education.  So, here’s tip # 2:

2)  Student Loan Interest

Student loans are the greatest things in the world when you’re in school.  But once you graduate, they have this annoying tendency of needing to be paid back.  But don’t worry—you can deduct up to $2500 of the interest, which can significantly lessen the sting of those monthly bills.

Not to go back on my word, here’s a bonus tip for today:

3)  Do I Really Need to File?

If your income is less than $8950, you don’t have to file.  But don’t let that stop you.  If you had any taxes withheld from your paycheck, you’ll need to file so you can get that money back (nope, the IRS isn’t going to show up on your doorstep with a giant cardboard check).  Also, if you’re 25 and your earned income is less than $12,880, you can file to get an earned income credit.

Two tips in one day…I’m feeling pretty generous.  Stay tuned for the next post.  I’ll be talking about moving expenses and how you can make them work for you.

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  1. Hello to Ron, As long as your daughter is 16 or older, she can enter a zero for her 2007 AGI if it’s the first time she’s filed a tax return.
    If she was younger than 16, she couldn’t efile her return.

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