For millennials, entering the workforce for the first time can seem daunting. Whether you were 100% financially dependent on your parents or having fun in high school/college, things were simpler and easier. The same goes for taxes and financial responsibility. This blog post is for the Millennial who is either about to start their first job or recently just started working. Here are five helpful tips that hopefully will make the transition from classroom to office cube that much easier.
- Securing all Internet Accounts
Internet, E-mail and social media have revolutionized the way we communicate. It has made instant communication easier, but has also made it riskier.
With that said, the first tip (and probably most important) is to make sure you secure all of your online accounts. There are a number of ways to effectively achieve this objective. First, be sure to use unique passwords for your accounts:
- Use both capital and lower-case letters.
- Use numbers and special characters.
- Do not duplicate passwords between accounts.
- Be sure to change your passwords every 90 days.
Additionally, when possible, use double authentication to secure your online accounts. Whenever you use an ATM machine to withdraw cash, by using a debit card and a PIN number, you are using double authentication. You can only access your bank account by both the card and the PIN number, not either or. Similarly, websites such as Facebook, Google and Yahoo have started using double authentication by requiring a password and then verifying the identity of the user using their smartphone by sending a verification code to your phone.
Finally, do not click on links that you do not recognize. Be wary of emails from strangers and do not give out sensitive personal information to unsecured websites.
Following these steps will allow you to secure your personal information.
- Importance of Secure Documents
Along with securing accounts, it is important to make sure you send documents with sensitive information securely. Make sure to ask your information technology professional if internal email is secure. When sending sensitive information over email, request to send through a secure channel. Most companies that handle sensitive information have a good way to send and receive documents securely. If you are unable to send the document through a secure channel, try to encrypt the data with a password. Microsoft Office programs contain methods to password protect files.
- Know your Bank Account Numbers/Routing Numbers
Did you know people used to write checks in order to pay for things like rent? Just kidding….Sort of. Another benefit of this digital age is it’s really easy to pay for almost anything either via debit/credit card or electronically. If you want to get paid via direct deposit, or make bank drafts, you still need to know how to read a check and know both of your bank account and routing numbers. You can do this one of two ways.
First, if you have a checkbook, at the bottom of each check are three series of numbers. The first 9 digit group of numbers towards the bottom left of the check comprises the routing number. The second sequence of numbers is the bank account number. The final group will match the check number. Occasionally you may see the check number listed between the routing and account number.
The second way to find your bank account and routing number is by looking on your online bank account. On all online banking websites, there is always a place to show your account number and routing numbers, usually one for paper and electronic transfers and one for wire transfers, or you may call your banking institution.
- Fill out Your Employment Forms Correctly and Ensure They Are Always up to Date
When starting a wage paying job, you will be required to fill out an I-9 Employee Verification Form, a form W-4 Employee’s Withholding Allowance Certificate, and a state withholding certificate. Be sure to accurately fill out the withholding certificates to ensure you do not over withhold or under withhold Federal and state taxes on your paychecks. Additionally, if you move from one state to another, be sure to inform your employer and fill out a new state withholding certificate to ensure you are withholding state taxes in the correct jurisdiction where you live.
- Document Retention
Last, but not least, is to make sure you retain hard copies of important documents in a safe place, or electronic soft copies of documents in multiple places. Too often, someone will have many of their tax returns, stock option information, stock purchase information, among other sensitive important documents stored on a computer but no hard copy is retained. When something happens to that computer, they have lost all their information. If you take a file folder and put it in a safe place in either your residence or your parents’ residence, the likelihood of these files being permanently lost are reduced. You will not need to reference these documents too much, but when asked for an old tax return or a stock purchase, you will be happy you stored them if your computer has crashed, etcetera.
Many millennials have begun work without this knowledge and have had to learn these lessons the hard way. These five tips will help your transition into the working world. Even if you are an older Millennial or not a Millennial at all, adopting these tips can only help you and may protect you from losing personal information, withholding the wrong amount of taxes on your paycheck and having an unwelcome surprise in April.
Written by: Alex Tuvin, CPA
Alex is a Tax Senior at Thompson Greenspon and has nearly 7 years of tax experience specializing in partnership and individual taxation.
Alex is a Certified Public Accountant in Virginia, and holds a Bachelor’s degree in Accounting and International Business from the University of Maryland.
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