Every morning you wake from your all-too-crammed condo that you share with your three best friends, or maybe from the room you rent from a nice elderly lady who cuts your rent a little each month because you help her with the gardening on the side, to make yourself a cheap cup of coffee and head out to your first full-time job. So begins the day in the life of a post college graduate.
For post grads in the workforce today, there seems to be one underlying factor consistent in everything you do: save money, make money, and be smart with your money. Life outside of the dorm means maintaining and sticking to a monthly budget to pay for rent, utilities, student loans, and any other outside bills that include car insurance, groceries, and assorted credit card payments.
If you just recently graduated, we’re quickly approaching your first ever tax deadline as a post grad with a full-time job! But don’t panic, especially if this is your first time filing taxes—we’ve got three helpful tips to keep in mind this tax season and make the process a lot easier.
Get professional help if you need it.
You can go about your first year of heavy-duty taxes one of two ways: you can do the legwork on your own on filing strategies to save the most money you can, or you can get some help and opt out of doing taxes all by yourself the first time around. There are lots of easily accessible tax software programs online that can help walk you through each step of the filing process and provide advice for tax deductions and credits. If you go the route of contacting a tax professional, they can also help you pay mind to your tax withholdings so you know what you pay in (if you need to) to the state is accurate and your refund is accurate.
Got a student loan? You may be able to deduct interest on that.
Did you take out a loan to pay for your college tuition? One thing all first-time post grad tax payers should know about is the Student Loan Interest Deduction. This deduction is an opportunity to deduct the interest you pay on a qualified student loan. According to the IRS, you can take advantage of this if you paid interest on a qualified student loan in 2013 (and were legally obligated to pay interest on said loan), your filing status is not married but filing separately, your modified adjusted gross income is less than a specified amount that’s set annually, and if you and your spouse, if filing jointly, are not claimed as dependents on someone else’s return.
Clean your slate and save money on taxes all at the same time!
This may be the perfect time to evaluate what you have in terms of possessions. Your twenties will be a time of moving around, and, trust me, after the second move you’ll want as few things to carry with you as possible. Make a trip to Goodwill and donate some gently used items you don’t need anymore! As mentioned on the site Gen Y Planning, you can deduct any donations to qualified charities (Goodwill is qualified) on your tax return. Just remember to get a receipt of what you donated and you’ll be good to go.
You’re doing great so far, post grads. You’ve already mastered so much (getting your degree, learning to pay bills, budgeting yourself), and you’ll do just as well when it comes to filing your taxes the first time and every time afterward. Good luck and happy tax season!
Published: February 13, 2014