Congratulations, Class of 2024 — you did it! While graduation is a major milestone that should be celebrated, it is also a time to prepare, both mentally and financially, for your shift into the “real world.”
As you transition into this next phase of your life, here are 5 financial tips to help manage your money and taxes.
Take Charge of Your Situation
As soon as you go out on your own and start earning your own money from a full-time income, it’s time to start taking responsibility for your obligations. This means filling out your W-4 and understanding your withholdings, making estimated tax payments if you’re self-employed or working as a contractor, and keeping accurate records of tax-deductible expenses.
If you decide to start your own business, QuickBooks Self-Employed can help you easily track your business income, expenses, deductible mileage, and help figure out your quarterly estimated taxes year-round. You can also easily export this information to your TurboTax Self-Employed tax return and eliminate entering your information again 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 (i.e. 401K, Roth IRA). These accounts serve the dual purpose of helping you get prepared for your financial future and helping you save money on your taxes, both now and in the future.
Take Advantage of Education Tax Benefits
Don’t forget to take advantage of the education tax benefits available. You may have had some qualifying education expenses earlier this year, or you may still be incurring expenses due to graduate work. Make sure you download or enter information if you receive a 1098-T form that shows tuition paid during the year. Be sure to keep your receipts for your education expenses like tuition and fees, books, supplies, and equipment so that you can take advantage of education tax credits and deductions available at tax time.
Don’t Forget the Student Loan Interest Deduction
Once you graduate, you’ll probably be required to start making regular payments on your student loans. Interest on the loans will make up a large amount of those payments; however, you can deduct up to $2,500 of that interest when filing your taxes. Your lender will send you a Form 1098-E reflecting the total interest paid over the year.
File A Tax Return
You’ll want to file a return even if your income is below IRS filing requirements if you had federal taxes withheld from your paychecks since you may be entitled to a tax refund. This is especially important to do if you’re eligible for a refundable tax credit like Earned Income Tax Credit. Every year, the IRS reports over $1 billion in unclaimed tax refunds, and the average median unclaimed tax refund is approximately $900. But, in order to get a tax refund, you need to file your taxes.
Don’t worry about knowing these tax benefits. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.
