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. 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
Although this isn’t technically tax guidance, it’s highly recommended to beware of creditors that prey on college grads. School students are aggressively targeted by credit card firms with on campus promoters, and will continue to do 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
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 enables you to subtract the interest paid on your own loans, which may be a chunk of change to many graduates. This deduction does start to phase out once your income reaches a total of $65,000. 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 take 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 seek the option of itemize for maximum savings if you believe that your number of deductions and credits 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 many college graduates. 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. Luckily for them, there are scores of tax credits and deductions available on the market 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. There is a component of taxation in all these.