Congratulations, Class of 2023 – you did it! While graduation is a major milestone to celebrate, it’s also a time to prepare, both mentally and financially, for your transition into the “real world.”
As you move into the next phase of your life, here are 5 financial tips to help you manage your money and bills.
Take your situation: Once you’re out on your own and earning a full-time income, it’s time to start taking responsibility for your obligations. This means doing things like Adjusting your W-4 and understanding your withholding, paying estimated tax if you’re self-employed or working as a contractor, and keeping accurate records of tax deductions.
If you become self-employed, QuickBooks Self Employed Help you easily track your business income, expenses, mileage deductions and help you figure out your business Quarterly estimated payments during the year. You can also easily export this information to your TurboTax Self Employed Tax return and cancel re-entering your information at tax time.
Open a Tax Advantage savings account: One of the best things you can do for yourself financially is to open and start contributing to tax-advantaged retirement savings accounts (ie 401K, Roth IRA). These accounts serve the dual purpose of helping you prepare for your financial future and helping you save money on your taxes, both now and in the future.
Take advantage of education tax credits: Don’t forget to take advantage of the education tax credits available today. You may have had a few Qualifying education expenses At the beginning of this year, or you may still incur expenses due to graduate work. Be sure to download or receive a 1098-T form that shows tuition paid during the academic year/semester. Be sure to keep receipts for your education expenses, such as tuition and fees, books, supplies, and equipment, so you can take advantage of education tax credits and deductions available at tax time.
Don’t forget the student loan interest deduction: After you graduate, you’ll probably need to make regular payments on your student loans. Interest on loans accounts for a large amount of these payments; However, you can deduct this interest when you file your taxes. Down to $2,500 possible. Your creditor will send you a Form 1098-E that shows the total interest paid during the year.
File a tax return: You’ll want to file a return even if your income is below the IRS filing requirements if you had federal taxes withheld from your paycheck because you may be entitled to a tax refund. Especially if you are eligible for a refundable tax credit, such as the Earned Income Tax Credit. Each year, the IRS reports more than $1 billion in unclaimed tax refunds, and the average unclaimed tax refund is nearly $900, but you must file your taxes to receive your tax refund.
Don’t worry about these tax benefits. TurboTax You’ll be asked simple questions about yourself and given tax deductions and credits you can qualify for based on your answers.
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