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
It may be frightening for a new graduate entering the workforce since we all know that the job market is not quite as great as it once was. Fortunately, there are tax deductions that may be helpful if you must relocate to some 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. 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 will keep doing so after graduation, even after they target graduate students with on campus promoters. 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 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 are going to settle for the deduction of ,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 allow preparing your yield to be quite easier. 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. 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. 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. There is a component of taxation in all these.