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. 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. 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. 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. If you’re a married grad, you can take the deduction of $10,900, and also $ 8,000 can be claimed by 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.
The charitable contributions deduction can be helpful to college graduates while any taxpayer can claim this credit. If you donated lots of your books, or needed to downsize to relocate to get a new job, then be sure to keep track of all the items that 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.
As compared to other years, this year college graduates – particularly those majoring in a technology related field – have ventured in 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 look out for work. In all these actions there is an element of taxation included.
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