Resource published Fri, Jun 16, 2017 at 12:52AM UTC edited Fri, Jun 16, 2017 at 12:52AM UTC
Southbourne Tax Group Review: How to be good on your taxes as a new college graduate Edit Title
The following are some basic pointers to review by Southbourne Tax Group that can help you do well on your taxes as a new college graduate.
Remember that if you’re single and have an adjusted gross income below $80,000, $2,500 of the interest portion of student loan payments can be tax deductible, and below $160,000 for a married person filing jointly.
Thinking about the expenses on your job hunting? Those can be tax deductible as well but on specific conditions only. If you’re searching for a new job in a new career field or working full-time for the first time, you can’t deduct the expenses included in those. Expect major tax breaks in your first job if you’re moving to a new and different city.
Consider contributing on your company’s 401(k) to get a jump start on retirement savings and to secure up to $18,000 from your income taxes. You could also secure $3,400 per year if you are a single filer by contributing to a health savings account and if you are enrolled in a high-deductible health plan. On the other hand, you can secure $6,750 if you have a family coverage. Having a flexible spending account and putting your hard-earned money on one can keep another $2,600 out of your taxable income.
As a new college graduate, are you planning to be a freelancer, or to be your own boss? Then look forward to getting big deductions for business expenses. Save that 25% of what you’re earning for the IRS, Southbourne Group advises.
Understand better the lifetime learning credit and know its uses. With post-secondary work at eligible educational institutions, you can claim up to $2,000 of the tax credit. If you’re a single filer and your adjusted gross income is below $65,000, or a married person filing jointly with below $131,000 adjusted gross income then such is possible.
You already know that saving money can cut your tax bill, right? If you’re a single filer that has an adjusted gross income of less than $31,000, qualifying for the saver’s credit is likely. A married person filing jointly may also qualify with an adjusted gross income of less than $62,000. With this, you can reduce your tax bill by up to 50% of the first $2,000 (for single filers) or $4,000 (married filing jointly) you contribute to an eligible retirement plan.
Lastly, Southbourne Tax Group wants you to avoid overspending on tax software and acquiring professional help. Instead, they recommend to people with simple tax situation of using the free packages provided by some tax software companies. Seek the professional help you need at Volunteer Income Tax Assistance program or other related programs that can help you meet a pro with little or no cost at all.
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