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. Fortunately, there are tax deductions that may be helpful if you must relocate to some job 50 or more miles away. However, the rules are complex and you may want to speak to a tax professional to make sure your expenses do qualify. While food can’t be claimed by way of example, hotel and gas costs can.
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. 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
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. 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 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 may want to itemize for maximum savings if you believe that your total number of credits and deductions will exceed your standard deduction. This may seem difficult, but tax professionals – as well as tax prep programs – can certainly inform you if you 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 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 education, a new stage in your life starts. You may continue with your education or may watch out for a job. There is a component of taxation in all these.