Essential Tax Tips For College Graduates
Now that college is over and you have graduated, it’s time to jump to the world of work and taxation. Here are a tax tips just 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. However, the rules are complex and you may want to speak to a tax professional to make sure your expenses do qualify. While food can’t be claimed by way of example, hotel and gas costs can.
Avoid Credit Predators
Although this isn’t technically tax guidance, it’s highly recommended to beware of creditors that prey on college grads. Credit card companies target college students with on campus promoters, and will keep doing so following graduation. If you avoid opening to many accounts then you will have additional money to ensure your full 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. For more information, check out page 28 of the IRS publication.
Standard Deduction vs Itemizing
Most college graduates are going to settle for the deduction of ,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 make preparing your returns substantially more easy. Then you might want to itemize for maximum savings if you think that your overall number of credits and deductions will exceed your standard deduction. On face value this might come out as rather hard, but tax professionals – as well as tax preparation programs – can inform you if one would be benefited by taking the standard deduction or not.
While any taxpayer can claim this credit, the charitable contributions deduction can be especially useful to college graduates. If you had to downsize to relocate for a new job, or contributed lots of your books that are older, then be sure to keep track of the items 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. 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 venture out to get work. In all these actions there is an element of taxation included.