Tax Tips that College Graduates Will Find Useful
Now that school is over and you’ve graduated, it’s time to dive into 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. 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. 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
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 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 when your income reaches a yearly amount 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 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. 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 might seem hard, but most tax professionals – and even tax preparation programs – can easily tell you not or if you would be benefited by choosing the standard deduction.
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 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 – particularly those majoring in a technology related field – are thinking about self-employment. Luckily for them, there are dozens of deductions and tax credits available on the market for self-employed individuals.
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.
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