Tax Tips For College Graduates
Now that college is over and you’ve graduated, it is time to begin living in the world of work and taxes. Here are a tax tips just for you.
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. Luckily, there are useful tax deductions which may be useful if you are required to relocate to a job 50 or more miles away. On the other hand, the rules are somewhat complex and you might need the services of a tax professional to be sure that 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. 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
You can now benefit from the student loan interest deduction, if you took out any student loans that will help you cover college fees. 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 find out more, check out page 28 of the IRS publication.
Standard Deduction vs Itemizing
Most college graduates are going to settle for the deduction of ,450. If you’re a married grad, you can take the deduction of $10,900, and also $ 8,000 can be claimed by heads of family. Taking the deduction will create preparing your return easier, but you should also consider the advantages of itemizing your return. 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 may seem difficult, but tax professionals – as well as tax prep programs – can certainly inform you if you would be benefited by taking the standard deduction or not.
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. You can subtract the value of all items you donate and have evidence of your donation.
This year more than ever, college graduates – especially those who majored in technology related discipline – are considering self-employment. Fortunately for them, there are dozens of deductions and tax credits out there for people that are self-employed.
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.