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The idea behind life insurance — that it’s one way to help protect loved ones — is fairly simple. But navigating the sea of options and figuring out which policy to go with isn’t always so straightforward.

Below are tips for comparing life insurance policies and understanding the insurance buying process.

Choosing the Right Policy

Before you start reviewing different life insurance options, it’s a good idea to first decide which type of policy you need. The following guidelines can come in handy.

Buying Term Life Insurance

Term life insurance offers protection for a specific time period, usually in five, 10, 15, 20, 25, or 30 years. If you die during that time, your beneficiaries receive a cash benefit.

A term policy can be matched to a particular length of time when coverage is needed. For example, if your top priority is to provide enough income for your dependents to pay for college, then a 20-year policy may fit your needs. Or if you need a policy that will help your beneficiaries repay outstanding debts, maybe a 25-year policy would make more sense.

If your budget is limited, buying term life insurance may make more sense. These policies tend to be more affordable than permanent life insurance because they are statistically less likely to pay out than permanent life policies.

Typically, there are a couple of reasons a term policy expires: if the insured stops paying the premiums or if they live past the term of the policy. Renewal is possible, but terms and rates may vary based on the applicant’s health and age. (The renewal is typically in one-year increments, and the cost will likely be significantly more than the cost during the initial term.)

Insured people who wish to extend their policies may want to contact different providers to determine how continuing coverage after the end of their life insurance terms generally works.

If your financial needs change during the term of the life insurance policy, contact your insurer. Some may offer a convertible policy, which involves converting a term life policy to a permanent policy in exchange for higher premiums.

Buying Permanent Life Insurance

Permanent life insurance works a bit differently. For starters, it provides protection for the insured’s lifetime, as long as the premiums are paid.

Unlike term life, a permanent life insurance policy will pay a death benefit no matter when the insured passes away. It may also come with a savings component, which can grow on a tax-deferred basis and be used to borrow funds for a variety of reasons or pay premiums. Even if the insured has less than ideal credit, the funds can still be borrowed against. In that case, the death benefit is considered collateral for a loan. (Make sure to check with your insurance provider or other advisor before withdrawing money because taking cash out of the policy can cause it to collapse unless the death benefit or premiums are adjusted.)

In practice, this can mean that when the insured passes away before repaying what was borrowed against the policy, the life insurance company deducts what’s still owed from the beneficiary payout.

There are several other options for permanent life insurance, including:

•   Whole life insurance. This coverage provides foreseeable lifelong coverage, which includes a fixed premium and death benefit.

•   Universal life insurance. Universal life insurance provides flexible lifelong protection and several cash accumulation options.

•   Variable universal life insurance. This type of coverage offers flexible death benefits and several investment options for the cash accumulation component.

It’s important to note that permanent life insurance is typically more expensive than term life insurance. So, when weighing out the options, the cost of the policy might be a crucial factor to calculate.

Recommended: Term vs. Whole Life Insurance

Calculating the Right Amount of Coverage

There are several different ways to calculate how much coverage is necessary. Some insurers recommend multiplying the insured’s salary by five or 10. While that can be an effective rule of thumb, be sure to account for all your beneficiaries’ anticipated needs. For instance, you might need a higher coverage amount if you have children and plan on helping them pay for college. On the other hand, if additional resources or assets are available to your beneficiaries at the time of your death, a lower coverage amount might make more sense.

Another option is to use an online life insurance calculator to estimate the cost of different levels of coverage. If you go this route, be sure to include all the debt that beneficiaries or an estate may be responsible for, including shared revolving debt.

Keep in mind that the amount of life insurance coverage you choose will impact the price of your monthly premiums.

Comparing Life Insurance Providers

Once you’ve determined the right type and amount of life insurance coverage you need, it’s time to gather life insurance quotes. Look for insurance companies with established financial histories, strong consumer ratings, and flexible product offerings. Several credit rating agencies look at insurance providers’ overall financial strength and their ability to meet existing insurance obligations (i.e., pay out the benefits).

But ratings aren’t a guarantee, so be sure to review ratings for all the companies you’re considering. For example, A+ and A++ are A.M. Best’s superior ratings. They denote companies that, according to the agency’s analyses, have shown an exceptional ability to meet their insurance obligations and have evidenced financial strength. (All 50 states, the District of Columbia, and Puerto Rico have a program to ensure that insurance proceeds are paid if an insurer becomes insolvent.)

Recommended: How to Buy Life Insurance in 9 Steps

Gathering Multiple Life Insurance Quotes

Some providers require you to complete a simple online application before you receive a quote. In order to provide an accurate quote, the insurance company may ask you to share some personal details, such as your age, location, gender, health, and desired coverage.

Since permanent life insurance policies tend to be more complex, it can be wise to consult with an agent who can help you compare the pros and cons of different types of policies.

Comparing Life Insurance Quotes

Here are some things to pay close attention to as you’re reviewing life insurance quotes and considering which policy meets your needs.

Cost

The cost of a policy is generally determined by underwriters employed by the life insurance provider. They look at numerous factors, including applicants’ age, health conditions, and medical history to determine the risk for covering them.

While each provider may use similar methodologies, costs can vary depending on the amount of coverage they are willing to provide and the price paid by the insured.

Again, the value of the company and the services offered can also play a role in how much a policy may cost. So while aiming to get the lowest monthly bill may seem like the right solution, it’s wise to evaluate if that lower-priced option can provide the desired coverage over the life of the policy.

Customization

Since no two people have the same financial goals or coverage expectations, some insurers offer policies designed to match a given applicant’s specific needs.

For example, insurers may offer different riders or payment plan options to customize a policy to fit an individual’s goals. Insurers who offer more flexibility might be a better fit for some buyers.

Product Range

Buying life insurance from a company that offers a wide range of products is not only a convenient way to shop for insurance, it may even help you save money. That’s because insurance companies sometimes offer discounts for bundling multiple insurance policies together, like life, automobile, or rental insurance.

People shopping for life insurance can review the other products each insurance company offers to determine if buying a bundled policy can save time, money, and the potential hassle of working with more than one provider.

Long-Term Cash Value Potential

Since permanent life insurance has a cash value component that can grow over time, it’s important to factor this trait when comparing each policy’s potential value. Although low-cost policies may seem like an attractive option, they may not provide as much coverage over the life of the policy.

For buyers who prioritize cash value and dividend distribution, picking a life insurance policy that offers either or both of those features may be a good choice. But keep in mind: Policies with higher dividend payouts are, typically, more costly each month. Many policies have guaranteed rates of return depending on the investment options. However, the market will often outpace the guarantees in insurance policies so consider your investment objectives and risk tolerance before getting a life insurance policy as an investment vehicle.

Using an Agent

While it’s possible to buy life insurance online, sometimes it’s wiser to contact an insurance agent. Because different life insurance products come with varying fine print details, an insurance agent could help buyers grasp the key differences between policies and products. Buyers can also ask them any lingering questions.

An agent who is well versed in the product’s details can also explain important distinctions like cost, coverage limits, and varying terms. It’s worth noting that many insurance agents are paid on commission. In most cases, you will not pay more by going through an insurance agent. The commission is included in the quote and goes to the insurer if the policyholder buys a policy directly from an insurance company.

The Takeaway

Life insurance can be a good way to provide for your loved ones after you’ve died. There are different types of policies to consider. Term life insurance offers coverage for a specific period of time; if you die during that time, your beneficiaries will receive a cash benefit. Permanent life insurance offers protection for the rest of the insured’s life and will pay beneficiaries a death benefit no matter when the insured dies. It often comes with a savings component that can grow on a tax-deferred basis and be used for a variety of purposes.

As you begin to research companies and gather quotes, take note of the cost, ability to customize, long-term cash potential, and range of products the insurer offers. An agent can help you make sense of your options and select the plan that’s right for you.

SoFi has partnered with Ladder to offer competitive term life insurance policies that are quick to set up and easy to understand. Apply in just minutes and get an instant decision. As your circumstances change, you can update or cancel your policy with no fees and no hassles.

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q225-003

Paying off student loans when you’re self-employed can be challenging. While being your own boss has its rewards, your income can be unpredictable, which can make it tough to make monthly student loan payments.

Fortunately, there are programs that can help entrepreneurs and freelancers, including loan repayment plans and student loan forgiveness for the self-employed. Read on to learn about the different options, plus strategies to help you pay off your student loans faster.

Understanding Student Loan Repayment for the Self-Employed

When you take out student loans, you sign a Master Promissory Note (MPN), a legal document in which you promise to repay your loans, plus interest and fees.

You can log into your account at StudentAid.gov and review your student loan balance and other loan information on your dashboard. There, you’ll also find the name and contact information for your loan servicer, which is the company that disburses your loan, handles billing and payments, and can help you choose the best repayment plan for your situation.

For example, if you have federal loans, and you’re struggling with student loan debt, you might consider the Graduated Repayment Plan, where your payments start out low and rise approximately every two years.

Or you could explore an income-driven repayment plan to help lower your student loan payments.

Recommended: Best Self-Employed Jobs for Extra Income

Income-Driven Repayment Plans for the Self-Employed

Income-driven repayment (IDR) plans base your monthly federal loan student payments on your discretionary income and family size. Although applications for IDR plans were temporarily on hold beginning in mid-February 2025 after a federal court issued an injunction, as of March 26, online applications for three of the IDR plans are now available again. However, forgiveness through most of these plans remains paused.

There are four IDR plans:

•   Income-Based: Payments are generally about 10% of a borrower’s discretionary income on this plan, and any outstanding balance is forgiven after 20 or 25 years. Note that on the IBR plan, forgiveness after the repayment term has been met is still proceeding at this time, since this plan was separately enacted by Congress.

•   Saving on a Valuable Education (SAVE): As of March 2025, the SAVE plan is no longer available after being blocked by a federal court. Forgiveness has been paused for borrowers who were already enrolled in the plan and they have been placed in interest-free forbearance.

•   Pay As You Earn (PAYE): A borrower’s monthly payment on PAYE is roughly 10% of their discretionary income, and they make 20 years of payments. As of March 2025, forgiveness has been paused. Borrowers who were already enrolled in the plan have been placed in interest-free forbearance since forgiveness has been paused.

•   Income-Contingent Repayment (ICR): The monthly payment amount on this plan is either 20% of a borrower’s discretionary income divided by 12, or the amount they would pay on a repayment plan with a fixed payment over 12 years, whichever is less. The repayment term is 25 years. As of March 2025, forgiveness has been paused for this plan. Borrowers who were already enrolled have been placed in interest-free forbearance.

Student Loan Forgiveness Programs for Self-Employed Borrowers

There are no forgiveness programs specifically for borrowers who are self-employed or who work as freelancers. However, you might qualify for forgiveness under a broader federal plan or a state-based program.

Public Service Loan Forgiveness (PSLF) and Nonprofits

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on a borrower’s federal Direct loans after they make 120 qualifying monthly payments under a qualified repayment plan while working for an eligible nonprofit or government agency. Unfortunately, self-employed individuals typically don’t qualify for PSLF because eligibility is based on working for a qualified employer.

It’s worth noting that in March 2025, President Trump signed an executive order to limit eligibility for PSLF and requested an update to the program’s regulations. The program remains unchanged for now, according to the Federal Student Aid website.

Income-Driven Repayment (IDR) Forgiveness

Typically, the remaining balances on eligible student loans are forgiven under IDR plans after a borrower makes a certain number of qualifying on-time payments over 20 to 25 years. But as of late March 2025, forgiveness has been paused on all of the IDR plans except IBR. (The IBR plan is excluded because it was enacted separately by Congress.)

You can find out more and get updates about IDR and forgiveness on the Federal Student Aid website.

State-Based Loan Forgiveness Programs for Entrepreneurs

Many states offer self-employed student loan forgiveness programs, typically for public service fields like health care, teaching, and law. Look into the professional association in your state or check your state’s government website for more information about programs that are available.

For example, if you have a law degree and you’re self-employed with your own practice, you can take advantage of statewide loan repayment assistance programs (LRAPs) in 24 states. You can reach out to your state’s bar association to learn more about specific loan forgiveness options you may be eligible for.

Recommended: Law & MBA Refinancing

Tax Considerations for Self-Employed Borrowers

As a student loan borrower and self-employed individual, you may be able to take the student loan interest deduction on your taxes. If you qualify for the full deduction, you can deduct student loan interest up to $2,500 or the total amount of interest you paid on your student loans, whichever is lower.

To be eligible for the deduction, you must meet the following criteria:

You paid interest on a qualified student loan during the tax year.

•   Your modified adjusted gross income (MAGI) is less than a specified amount that is set annually.

•   Your filing status is anything except married filing separately.

•   Neither you nor your spouse can be claimed as a dependent on someone else’s return.

•   You are legally required to pay the interest on a student loan.

Strategies to Pay Off Student Loans Faster When Self-Employed

In addition to loan forgiveness for the self-employed, student loan repayment plans, and state-based programs you may be eligible for, there are also techniques that can help you repay your loans faster. Here are a few to consider.

Budgeting and Setting Aside Funds for Loan Payments

Creating a budget and dedicating a set amount each month toward your loan payments can help you stay on track to pay them off. Once you look at the amount of income you have coming in, you may even be able to direct additional money to your loan principal, which could help reduce the amount of interest you owe over the life of the loan.

Using Business Income to Cover Student Debt

Generally, student loan payments cannot be used as a business expense deduction on your taxes. However, as discussed, you may be eligible for the student loan interest deduction. Additionally, the more income your business earns, the more you may be able to pay yourself, which means you could direct more funds to your monthly student loan payments.

Refinancing Options for Entrepreneurs

You might also consider refinancing your student loans. With a student loan refinance, you trade your existing loans for a new loan from a private lender. Ideally, you might qualify for a lower interest rate or better loan terms.

You can refinance both private and federal student loans. For instance, you could refinance health care student loans if you decide to pursue that option. However, it’s important to understand that if you refinance federal student loans, you’ll lose access to benefits such as IDR plans. Make sure refinancing is right for you before you move forward with it.

The Takeaway

There are repayment plans, student loan forgiveness, and loan assistance programs for those who are self-employed and working to repay their student loan debt. You can investigate income-driven repayment plans on the Federal Student Aid website and check with your state to find out about any forgiveness or loan assistance programs they offer to those in your field.

Also, you can also consider options that may help you pay off your loans faster, such as paying extra toward your loan principal and exploring student loan refinancing.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

Can self-employed borrowers qualify for student loan forgiveness?

Self-employed borrowers may qualify for federal student loan forgiveness under income-driven repayment plans. You can find out about the available IDR plans at StudentAid.gov, and fill out an online application if you qualify. However, be aware that as of late March 2025, forgiveness on these plans is paused.

Your state might also offer student loan forgiveness programs, especially if you are in health care, teaching or law, among other professions. Check with the relevant professional association in your state and your state’s government website to find out more.

How does income verification work for self-employed repayment plans?

You must provide income verification to qualify for income-driven repayment plans. Proof of income includes your most recent federal income tax return or pay stubs.

What tax deductions are available for self-employed student loan payments?

You may qualify for the student loan interest deduction of up to $2,500 or the amount of interest you paid on your student loans during the year, whichever is less. Your modified adjusted gross income (MAGI) must be less than a specific amount that’s set annually, along with other eligibility requirements.

Are there any special loan repayment programs for entrepreneurs?

There are no special student loan repayment programs for entrepreneurs. However, your state may offer loan repayment or assistance programs you might qualify for. Check with any professional organizations you belong to for more information, as well as your state’s government website.

How can freelancers manage student loan payments without steady income?

Freelancers with inconsistent income can typically still take advantage of income-driven repayment plans, which can potentially lower your student loan payments. However, you will need to provide income verification, such as your most recent federal income tax return or paychecks, to see if you qualify

In addition, you can use other strategies to manage student loan payments, such as setting up a budget to help direct money to your monthly payments and claiming the student loan interest deduction on your taxes, if you qualify.

photo credit: iStock/Jacob Wackerhausen

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOSLR-Q125-018

Taxes are due April 15, but many taxpayers wait until the last minute to file. If that sounds familiar, don’t worry — you’re not alone. And rest assured that it’s still possible to file accurately and on time. All you need is the right approach.

These last-minute tax filing tips can help you get your return in before it’s too late — all while maximizing tax breaks and planning for taxes owed. Whether you’re filing taxes on your own or working with a professional tax service, getting started now brings you closer to crossing this task off your list.

Tip 1: Know Your Tax Deadlines and Extensions

Federal taxes are usually due on April 15 (11:59 p.m. local time). If that day falls on a weekend or legal holiday, the deadline to file taxes moves to the following business day.

State income tax deadlines can vary. While many fall on April 15 in line with the federal due date, others have different deadlines. Check with your state revenue department for specifics.

The Internal Revenue Service (IRS) does offer a six-month tax extension deadline for federal returns, which can help if you need a little more time. This extension gives you until October 15 to file. However, even with the extension, you still need to pay any taxes you owe by the April 15 deadline. The IRS could penalize you if you don’t.

And if you’re self-employed or own a business, you may owe estimated taxes. These are generally due every quarter — April 15, June 15, September 15, and January 15 of the following year.

Tip 2: Organize Your Documents

Being organized is key to successfully filing your taxes on time, especially at the last minute. Here are some common tax forms you might need:

•   W-2s from your employer

•   1099-K (payment card and online marketplace payments)

•   1099-G (government payments)

•   1099-INT (interest earned from bank accounts or brokers)

•   1099-DIV (dividends and distributions)

•   1099-NEC (freelance or independent contractor income)

•   1099-R (pensions, annuities, or retirement plan distributions)

•   1099-MISC (other miscellaneous income)

•   1098-E (student loan interest tax deduction)

•   1095-A (health insurance marketplace statement)

•   SSA-1099 (Social Security benefits)

If you’re looking to maximize credits or deductions, you may also need supporting documentation for things like:

•   Health savings account contributions

•   Retirement contributions

•   Child care expenses

•   Health care expenses

•   Mortgage interest and property tax payments

•   Tuition or student loan interest payments

Getting all your documents together upfront can save you time and cut down on filing errors. This means less stress for you.

If you’re missing any specific forms, you can request them from your employer, financial institution, loan service provider, or other relevant entity. Many organizations offer online access to these documents via your account dashboard.

A tax professional or DIY tax prep software can guide you toward the forms you need for a smoother filing experience. Some platforms even auto-import your forms.

Tip 3: Plan for Owed Taxes

Even if you’re filing taxes at the last minute, it’s good to have an idea of what you owe ahead of time. That way you won’t be blindsided by a tax bill or run the risk of owing penalties on unpaid taxes.

If you’re employed and have taxes withheld from your paycheck, checking last year’s tax return can provide a baseline for what this year’s tax bill might be. Circumstances may have changed, but you can use your income, deductions, and credits to get a ballpark number.

If you receive income without withholding, such as self-employment earnings, you can use IRS Form 1040-ES to calculate your quarterly estimated taxes.

Whatever your tax situation, be sure to pay on time, even if you’re filing an extension. Otherwise, you could get hit with a 0.5% to 25% failure-to-pay penalty on your unpaid taxes.

Payment options include:

•  IRS Direct Pay with your bank account

•  Certified mail (send Form 1040-ES)

•  IRS2Go app

•  Debit card or credit card

•  Electronic Federal Tax Payment System (you must enroll first)

•  Individual IRS account online

Tip 4: Plan for HSA Deductions

Did you contribute to a health savings account (HSA) last year? If so, you could qualify for deductions that reduce your taxable income. HSAs offer a 1-2-3 punch of tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.

Contributions made in 2024 max out at $4,150 to your account and $8,300 if you have family coverage. For the 2025 tax year, you can contribute up to $4,300 or $8,550, respectively.

To qualify for an HSA, you must:

•  Have a high-deductible health plan (HDHP)

•  Not be enrolled in Medicare

•  Not be a dependent on someone else’s tax return

•  Not have other health coverage (in most cases)

If you weren’t able to take tax-advantaged account deductions like these in 2024, keep them in mind for future tax seasons to help get the most tax breaks possible.

Tip 5: Maximize Your IRA Contributions

Traditional IRA contributions can reduce your taxable income for the previous year if made before the April 15 tax filing deadline. Contributions may be fully or partially tax deductible, depending on your income and tax filing status.

For the 2024 tax year, the IRA contribution limit is $7,000 ($8,000 if you’re 50 or older). Maxing out your contributions can significantly lower your taxable income. These contributions can apply to the prior tax year if made before the filing deadline. (For example, contributions made before April 15, 2025, can apply to the 2024 tax year.)

You could get a full deduction up to the 2024 contribution limit amount if any of the following criteria apply:

•  You’re single, head of household, or a qualifying widow(er) and not covered by a retirement plan at work.

•  You’re married filing jointly or separately, and your spouse isn’t covered by a workplace retirement plan.

•  You’re married filing jointly, your spouse is covered by a workplace retirement plan, and your modified adjusted gross income (AGI) is $230,000 or less.

Other taxpayers may be able to claim a partial deduction. Those who earn above a certain income threshold don’t qualify for a deduction.

Maxing out your traditional IRA contributions could mean reducing your taxable income for that year. Depending on your current income, it might even put you in a lower federal tax bracket.

Tip 6: Choose a Reliable Tax Preparer or Tax Software

Choosing a trusted tax preparer or software can make last-minute tax filing easier. The right software (or tax professional) could help you prepare and file your taxes accurately and quickly, potentially even getting you a faster refund.

If you go with tax software, look for features like deduction finders, audit support, and refund estimators. If you have a complicated tax situation, find one that offers hands-on expert support or consider using a tax professional. Be sure to check reviews when choosing tax software (this goes for tax preparers as well).

If your AGI is $84,000 or less, you can also do your taxes for free using IRS Free File. This software can guide you through the tax filing process to ensure you’re getting your taxes done quickly and securely, according to the IRS.

Tip 7: Review Deductions and Credits for Missed Opportunities

Another last-minute tax tip? Look for tax breaks.

It’s all too easy to overlook common deductions and credits when you’re on a tight deadline. But this could result in some major missed savings opportunities.

Every taxpayer’s situation is different, but common tax breaks include:

•  Earned Income Tax Credit (EITC): Claim up to $7,830 (for the 2024 tax year) based on your income, filing status, and number of dependents.

•  Education credits: If you, your spouse, or a dependent pays qualified higher education expenses and is enrolled in an eligible academic institution, you could qualify for the American Opportunity Tax Credit (up to $2,500 per eligible student) or the Lifetime Learning credit (up to $2,000 per tax return).

•  Energy-efficient home improvement credit: Did you make qualifying energy-efficient home improvements in 2023 or beyond? If so, you could be eligible for up to $3,200.

•  Health care expense deduction: You may be able to deduct medical and dental expenses that exceed 7.5% of your AGI for the tax year.

•  Mortgage interest deduction: If you paid home mortgage interest, you could potentially deduct the full amount when you file taxes.

•  Home office deduction: If you used part of your home for business-related activities, you may be able to deduct certain home expenses.

You may need to itemize deductions to claim certain tax breaks. Restrictions and limitations may also apply.

Don’t Forget About Student Loans

Did you pay interest on qualified student loans last year? If so, you could be eligible for a student loan interest deduction.

This tax break lets you deduct up to $2,500 or the amount of interest paid, whichever is less. You can claim the full amount if your modified adjusted gross income (MAGI) is less than $80,000. If you earn between $80,000 and $95,000 ($165,000 and $195,000 for joint filers), the deduction amount gradually decreases.

If you paid at least $600 in interest last year, you should receive Form 1098-E (Student Loan Interest Statement). If you don’t, request or download it from your student loan servicer.

Tip 8: Set Up Direct Deposit for Fast Access

If you’ve never filed a return before, you may be wondering how long it takes to receive your refund after filing taxes.

It depends, but the process is typically much faster when done online (and with direct deposit set up). According to the IRS, it usually takes 21 days or less to process electronically filed individual tax returns and issue a refund.

Speed isn’t the only benefit of direct deposit. It also reduces the risk of lost, stolen, or damaged checks. Plus, you can track your refund using the Where’s My Refund tool.

You can use a checking account or other financial account to set up direct deposit with the IRS. Here’s how to do it:

•   With tax software: Simply choose “direct deposit” as your refund method. You’ll need to include your account number and routing number.

•   With a tax preparer: Tell your preparer you want to use direct deposit, and they’ll help you set it up.

Tip 9: Review Last Year’s Taxes and What Has Changed

You can reference last year’s tax return to get a better idea of your various income sources and tax breaks. Just know that major life changes — like divorce, marriage, job change, or a new child — can have a major impact on your taxes.

For example, getting married (or divorced) will likely change your filing status. It could also affect your income tax bracket and deductions.
Meanwhile, having a child could potentially qualify you for a $2,000 child tax credit. Other common tax credits include the Additional Child Tax Credit and the Credit for Other Dependents.

Check your filing status before finalizing this year’s tax return, especially if you’ve gone through a major life change. A different filing status could mean you qualify for a new standard deduction amount or income tax bracket. And it might affect your eligibility for other tax breaks.

Tip 10: Use Spending and Savings Tools

As of the end of February 2025, the average refund amount is $3,382. If you’re due a refund — regardless of how much — now might be a good time to use it to reset your financial goals.

Rather than spend your refund, it may be better to save it, invest it, or use it to pay down debt. You can also put it in a high-yield savings account (HYSA), where it can accrue interest.

Using spending or savings tools can also help you spend your money wisely or reach your financial goals. For example, you could:

•  Use a free budgeting app that lets you track and reduce your expenses.

•  Set up automatic savings with your bank.

•  Use an income and expense tracker to monitor income and tax spending.

Tip: Check out SoFi’s savings calculator, which shows how much money in a HYSA account may grow over time.

The Takeaway

Staying organized, using a reliable tax software or preparer, and knowing your tax breaks can make last-minute tax filing a little less stressful. It can also help you get ahead of next year’s deadline to file taxes — and avoid potential tax penalties.
In the meantime, why not get your finances in order? SoFi offers financial products and tools you may want to explore, including high-yield savings accounts, debt repayment tools, budgeting, and spending tools.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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3.80% APY
SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.


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