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. 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. 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. While food can’t be claimed by way of example, hotel and gas costs can.
Avoid Credit Predators
While this cannot be entirely be mentioned as a tax tip, it is a good idea 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. 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
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 subtract the interest paid on your own loans, which may be a chunk of change to many 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 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 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 education starts a new leaf in life. You may continue with your education or may watch out for a job. However, in all this there is an element of taxation.