I remember my college graduation like it was yesterday.
Although I had to say goodbye to all of my friends, I knew that it was a huge
stepping stone towards my future … and a taste of the real world.
Nothing can really prepare you for life after college,
especially when it comes to taxes. We all have to grow up some time, but many
college graduates may be unaware of what tax laws exist and apply to them. Here’s
a few that you should definitely take advantage of.
loan interest. You’ve earned your education … literally, meaning that in a
few months after graduation you will begin paying off your student loans.
Interest that you pay on qualifying student loans is tax deductible. They must
have been used solely for educational purposes, and if you pay $600 or more on
the loan, expect to receive Form 1098-E from your lender. More information can
be found in IRS Publication 970.
search costs. If you’re looking for your first job, you can’t deduct your
job-hunting expenses. However, if you are already employed and are looking for
a new job in the same line of work, money spent on printing resumes, employment
agency fees, and other items assisting you in your job search can be
deductible. These expenses must be greater than 2 percent of your adjusted
costs. Your moving expenses can also be deducted for relocating for a new
job, regardless of whether it’s your first one or not. Check out IRS Publication 521
to see if you can qualify for this deduction.
contributions. Once you have landed your new job, begin contributing to an
IRA or your employer’s retirement plan right away. Each tax year, the IRS
allows you to deduct some of what you contribute to a retirement plan. Your
savings can also reduce your taxable income thus lowering your tax bill.
fund. While it’s important that you put money aside for your future, it’s
also important to put money aside for emergencies. Keeping an emergency fund of
9 months to a year’s income will provide some cushion in case you experience a
Are you entering the military? Active duty military members qualify for
several tax advantages, such as untaxed combat pay, family and home deductions,
and educational credits. In addition, members of the military reserve forces
and National Guard also receive tax benefits, including mileage deductions for
unreimbursed, work-related travel expenses. Visit the IRS website or your tax
preparer for more details on military tax deductions.
care. While you’re working, leaving your kids in daycare works in your
favor at tax time. The child and dependent care credit allows you to claim
expenses paid towards qualifying daycare and summer camps.
A huge congrats to all the students who are graduating this
For answers to your tax questions, locate your nearest
Liberty Tax office using our office locator or by
Disclaimer: Every effort has been taken to provide the most accurate and
honest analysis of the tax information provided in this blog. Please use your
discretion before making any decisions based on the information provided. This
blog is not intended to be a substitute for seeking professional tax advice
based on your individual needs.