Tax Tips for Graduates from Class of 2024

A hearty congratulations to the esteemed graduates of the Class of 2024. Commemorating your graduation is vital, but it is equally important to prepare yourselves, both mentally and financially, for the impending transition into the unforgiving real world with our tax tips for graduates.

Transitioning into the next chapter of life can be both exciting and daunting. For recent graduates embarking on this journey, it is crucial to equip yourself with essential knowledge on managing your finances and taxes as you step into the real world.

Tax Tips for Graduates 1. Take Control of your Financials

Once you venture into independent living and begin receiving a consistent income from full-time work, embracing accountability for your commitments becomes essential.

Ensuring compliance with tax regulations involves several key steps. These include completing the W-4 form correctly, grasping the details of your withholdings, submitting estimated tax payments when you are self-employed or engaged as a contractor, and maintaining precise documentation of expenses that qualify for tax deductions.

Embarking on the journey of entrepreneurship requires meticulous tracking of your financial transactions. Utilizing a spreadsheet to document your business expenses, income, deductible mileage, and quarterly estimated taxes can streamline the process of managing your finances effectively and efficiently throughout the year.

Quickly transfer all this data to your PriorTax Self-Employed tax filing by collaborating with a dedicated tax specialist from PriorTax. This streamlined process ensures that you won’t need to input your details twice when tax season arrives.

Tax Tips for Graduates 2. Start My Tax Advantage Savings Accounts and Plans

To set yourself up for financial success, consider the benefits of opening and actively funding tax-advantaged retirement savings plans and accounts like a 401K or Roth IRA.

By utilizing these accounts, you can prepare for upcoming financial endeavors while also significantly reducing your tax burden, both presently and in the long run.

Tax Tips for Graduates 3. Apply My Education Tax Deductions and Benefits

Remember to make the most of the educational tax breaks that you are eligible for. Whether you’ve already incurred qualifying education costs recently or are currently facing expenses related to pursuing an advanced degree, be sure to take advantage of the available benefits.

Upon receiving a 1098-T form indicating tuition payments made within the year, ensure to either download the information provided or input it into your records. Retaining receipts for education-related costs such as tuition, fees, books, supplies, and equipment is advisable to maximize education tax benefits and deductions when filing taxes.

Tax Tips for Graduates 4. Remember My Student Loan Interest Tax Deduction

Upon completing your studies, it’s likely that you’ll need to commence making monthly payments towards your student loans. A significant portion of these payments will go towards interest accrued on the loans. Fortunately, you have the option to claim a tax deduction of up to $2,500 on the interest paid. Your loan provider will furnish you with a Form 1098-E detailing the annual interest amount you’ve paid.

Tax Tips for Graduates 5. Accurately File My Tax Return

It is advisable to submit a tax return, irrespective of meeting the IRS filing threshold if federal taxes were deducted from your earnings. This could lead to a potential tax refund.

It is crucial to take action, particularly if you qualify for a refundable tax credit such as the Earned Income Tax Credit. Annually, more than $1 billion in unclaimed tax refunds are reported by the IRS, with the average unclaimed tax refund amounting to around $900. Remember, submitting your tax return is the key to receiving a tax refund.

Rest assured that you don’t need to stress about familiarizing yourself with these tax advantages. PriorTax will ensure they are fully utilized in your tax filing regardless of the financial decisions you took in the previous year. Whether you prefer to navigate your tax return independently or opt for the expertise of a PriorTax dedicated tax professional, rest assured that we will maximize your tax benefits and secure the largest refund possible – with a guarantee.

This entry was posted on Thursday, May 23rd, 2024 at 8:00 am and is filed under Tax Deductions and Credits, Tax News, Tax Tips and Tricks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.