Tax Tips that College Graduates Will Find Useful
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
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. Luckily, there are useful tax deductions which may be useful if you are required to relocate to a 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. 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. Then you’ll have extra money, if you stay away from opening countless accounts your entire 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 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 will want to choose the deduction of $5,450. 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. Taking the deduction will create preparing your return easier, but you should also consider the advantages of itemizing your return. 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.
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. 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 – particularly those majoring in a technology related field – are thinking about self-employment. Fortunately for them, there are dozens of deductions and tax credits out there for people that are self-employed.
On completing your education, a new stage in your life starts. You may continue with your education or may look out for work. There is a component of taxation in all these.