Essential Tax Tips For College Graduates
Now that school is over and you’ve graduated, it’s time to dive into the world of work and taxation. Here are some of the essential tax tips for you.
Job Related Relocation
Everybody understands that the job market isn’t quite as good as it once was, and this may be frightening for a new graduate entering the work force. Fortunately, there are tax deductions that may be helpful if you must relocate to some job 50 or more miles away. The rules are somewhat complicated and you may want to speak to a tax expert to be sure your expenses do qualify. As an example, gasoline and hotel expenses can be claimed this is not the case for meals.
Avoid Credit Predators
While this isn’t technically tax guidance, it’s a good idea to beware of lenders that prey on college grads. Credit card companies target college students with on campus promoters, and will keep doing so following graduation. Then you’ll have extra money, if you stay away from opening countless accounts your entire tax liabilities can be paid by you.
Student Loan Interest
Now is a good time to take advantage of the student loan interest deduction, if you took out any student loans that assisted you pay for college. It enables you to deduct the interest paid on your own loans, which may be quite a chunk of change for several graduates. This deduction does start to phase out once your income reaches a total of $65,000. To find out more, check out page 28 of the IRS publication.
Standard Deduction vs Itemizing
Most college graduates will want to take the deduction of $5,450. You can take the deduction of $ 10,900 if you’re a married graduate, along with $ 8,000 can be claimed by a heads of family. You should also look at the advantages of itemizing your return, although taking the normal deduction will make preparing your returns substantially more easy. Then you may want to itemize for maximum savings if you believe that your total number of credits and deductions will exceed your standard deduction. This might seem hard, but most tax professionals – and even tax preparation programs – can easily tell you not or if you would be benefited by choosing the standard deduction.
The charitable contributions deduction can be helpful to college graduates while any taxpayer can claim this credit. If you had to downsize to relocate for a new job, or donated a lot of your books that are older, then be sure to keep track of all the items that you donate. It is your choice to deduct the value of all items you happen to donate, provided you itemize your return and carry evidence of your donation.
This year more than ever, college graduates – especially those who majored in technology related discipline – are considering self-employment. Luckily for them, there are dozens of deductions and tax credits available on the market for self-employed individuals.
On completing your education, a new stage in your life starts. You may continue with your education or may look out for work. However, in all this there is an element of taxation.