A 10-Point Plan for Resources (Without Being Overwhelmed)

Tax Tips that College Graduates Will Find Useful

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

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. Fortunately, there are tax deductions that may be helpful if you must relocate to some 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. By way of example, gasoline and hotel costs can be claimed, whilst food cannot.

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 will want to take 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. 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. 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.

Charitable Donations

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.

Self-Employment

This year more than ever, college graduates – especially those who majored in technology related discipline – are considering 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. However, in all this there is an element of taxation.