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. Listed below are a tax tips for you that you will find helpful.
Job Related Relocation
Everyone understands that the job market is not as good as it once was, and this can be frightening for a new graduate entering the workforce. The good thing is that there are useful tax deductions that will be very helpful if you must relocate for a job that is 50 or more miles away. However, the rules are complex and you may want to speak to a tax professional to make sure your expenses do qualify. By way of example, gasoline and hotel costs can be claimed, whilst food cannot.
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 will keep doing so after graduation, even after they target graduate students with on campus promoters. It is more likely you will have extra money, if you avoid opening accounts your whole tax liabilities can be paid by you.
Student Loan Interest
If you took out any student loans that will help you pay for college then you can now take advantage of the student loan interest deduction. It permits you to subtract the interest paid on your loans, which may be quite a chunk of change for several graduates. Once your income reaches an amount of ,000 the deduction does start to phase out. To get more information on the, take a look at page 28 of the IRS publication.
Standard Deduction vs Itemizing
Most college graduates will want to choose the deduction of $5,450. You can take the joint deduction of $ 10,900 if you’re a graduate who is married, and also $ 8,000 can be claimed by a heads of the family. You should also look at the advantages of itemizing your return, although taking the normal deduction will allow preparing your yield to be quite easier. 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.
While any taxpayer can claim this credit, the charitable contributions deduction can be especially useful to many college graduates. If you donated lots of your books, or needed to downsize to relocate to get a new job, then be sure to keep track of all the items that you donate. You can deduct the value of all items you happen to donate, as long as 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 schooling it is certain that a new phase in life starts. You may continue with your education or may watch out for a job. However, in all this there is an element of taxation.