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3 Ways Millennials Can Take Control of Their Taxes (and Refunds!)

03/07/2014 12:01 EST | Updated 05/07/2014 05:59 EDT

Over the past little while several studies have linked poor financial management and poor financial literacy to Millennials.

A TD Canada Trust report found one-in-five Canadians aged 18 to 34 use their credit cards to add to their income, while only about 40 per cent make minimum monthly payments.

The National Report Card on Youth Financial Literacy found Millennials' financial behaviour generally does not align with their financial expectations.

While this paints a less-than-perfect financial picture, an Intuit study is much more hopeful. It found Canadian Millennials are more financially savvy than most people give them credit for.

Let's take a look.

Over 70 per cent of those surveyed said they are satisfied with their level of control over their personal finances. They're also thinking about future finances: 44 per cent have a Tax Free Savings Account, 43 per cent have an RRSP and 85 per cent said they would use a $1,000 tax refund towards debt or investments.

This should come as little surprise considering Millennials have lived most of their adult lives in less-than-certain economic times. They're learning first hand what it takes to manage finances properly, with a look towards the future.

With that in mind, things aren't perfect. The Intuit study indicated they're not confident about taxes.

Almost half of those surveyed (46 per cent) said they have never prepared their own taxes because they're afraid of making mistakes, like missing out on deductions that they don't know about (41 per cent).

While these digital natives bank and manage credit cards online and through mobile apps, only one third plan to file taxes themselves using tax software. Given that taxes are like the DNA of personal finances, it's only natural that doing it themselves is the next step in managing all aspects of their pocketbook. It's easy, and best of all it's the surest way to receive a maximum refund.

Here are three tax tips to help Millennials take full control come tax time:

1. Be fearless, but don't be afraid to ask for help: Got a case of FOMO? With tax software, filing is easy and there's support when you need it. After all, it's simply a recap of what you did last year. And only you know what that was -- no one else. Managing your return provides insight into your financial situation and will help you plan for next year. Check out these first-time filers if you need a little inspiration.

2. Think long term: Tax season only happens once a year. Learn to make smart choices in your day-to-day life to limit what you owe and maximize your return come tax time. Hold on to your receipts. Buy a transit pass instead of paying for each fare. These are just a couple of ways to help you ace tax time and put more money back in your pocket.

3. Fast refund: Doing it yourself and filing electronically means you receive your refund fast. Most Canadians receive their refund -- likely the biggest cheque they receive all year -- within eight days after filing. Who doesn't want that?

You already have a good handle on your personal finances. Don't let the "fear of missing out" keep you from taking full ownership of your financial situation. There are plenty of tools out there to make sure you do it right the first time.

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