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I'm a new graduate, incoming intern looking for advice and ideas on what I can deduct this year. What will you all be deducting? Only legal deductions please...
What are you deducting this year?
- Thread starter freddydpt
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Depends on how you are filing.
When you moved, did you give anything to salvation army etc (charity).
plus, you probably will only make 6mo salary, but still have tuition, so you may end up getting everything back (i.e. low income for this year).
Invest in your 401k to match, and then max out a roth as you won't have many years that you can.
If you have a mortgage (interest)
if you have student loans (interes)
Since your technically in school this year, look inot the lifelong learning credit, tution etc.
There are a lot of ways to get some deductions, and it all varies on you.
If you want more answers, do a search, as most of these have been discussed.
When you moved, did you give anything to salvation army etc (charity).
plus, you probably will only make 6mo salary, but still have tuition, so you may end up getting everything back (i.e. low income for this year).
Invest in your 401k to match, and then max out a roth as you won't have many years that you can.
If you have a mortgage (interest)
if you have student loans (interes)
Since your technically in school this year, look inot the lifelong learning credit, tution etc.
There are a lot of ways to get some deductions, and it all varies on you.
If you want more answers, do a search, as most of these have been discussed.
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Awesome, that was a huge help... I didn't realize about the lifelong learning credit.
You mentioned that I could get everything back... but do you mean state, federal and local? Or only one of those?
Thanks! (sorry for my ignorance... I also searched but there doesn't seem to be many threads in this forum).
You mentioned that I could get everything back... but do you mean state, federal and local? Or only one of those?
Thanks! (sorry for my ignorance... I also searched but there doesn't seem to be many threads in this forum).
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Usually (not for everyone, but a LOT), interns are "low income" in that they make 6mo salary which ends up being around $20k. Once you add in deductions (which are multiple, and you should LOOK for them), you end up w/around $16k income for a taxable year.
During your 6 months of intern year, you probably have W2 with ~2 deductions or so. By the end of the year you will have been "over taxed". Thus getting most of it (it being YOUR MONEY), back because you are low income bracket.
As always, this depends on you and your situation, state, debt, interest, mortgage, donations, etc, but almost (if not all), of our interns and my class as an intern, got ~100% of state and federal taxes back.
During your 6 months of intern year, you probably have W2 with ~2 deductions or so. By the end of the year you will have been "over taxed". Thus getting most of it (it being YOUR MONEY), back because you are low income bracket.
As always, this depends on you and your situation, state, debt, interest, mortgage, donations, etc, but almost (if not all), of our interns and my class as an intern, got ~100% of state and federal taxes back.
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If you make $20K this year, and you take the standard deduction for a married couple ($10,500) you now have $9500 in taxable income. Say you paid $500 in loan interest, you take that off "above the line," so your AGI is $9000. This is the 10% tax bracket, so you owe $900 in tax. But if you paid tuition etc in 2008 you should be able to get all that federal tax back with a credit. I don't know what state you're from so can't really speak to state or local tax. Shouldn't be much though compared to what you'll pay in the future.
Deductions are important only if you have more than the standard deduction worth. A lot of people think mortgage interest is deductible. Well, it is, but only the portion above and beyond $10,500/year. None of mine was deductible last year because I took the standard deduction.
Becoming familiar with the basic principles of the tax code will pay huge dividends in the future. Learn to do your own taxes now, by hand, while they're easy. Then you only have to learn how to do one or two new things each year as your taxes get more complicated. You can always pay an accountant to check your work or run it through taxcut or similar program if you want, but it pays off to know how it all works.
Deductions are important only if you have more than the standard deduction worth. A lot of people think mortgage interest is deductible. Well, it is, but only the portion above and beyond $10,500/year. None of mine was deductible last year because I took the standard deduction.
Becoming familiar with the basic principles of the tax code will pay huge dividends in the future. Learn to do your own taxes now, by hand, while they're easy. Then you only have to learn how to do one or two new things each year as your taxes get more complicated. You can always pay an accountant to check your work or run it through taxcut or similar program if you want, but it pays off to know how it all works.
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Here are a few expensese you can claim on your tax return the year you begin working even if you don't itemize your deductions:
If you move more than 50 miles in connection with your first job, don't forget to deduct your moving expenses. You can to deduct the cost of moving your household items and the cost of traveling to the new job location. You can find out more about deducting moving expenses at www.irs.gov, and take a look at the instructions to the Form 3903.
And if you begin paying back your student loans, don't forget to claim the first $2,500 of interest paid during the year.
If you move more than 50 miles in connection with your first job, don't forget to deduct your moving expenses. You can to deduct the cost of moving your household items and the cost of traveling to the new job location. You can find out more about deducting moving expenses at www.irs.gov, and take a look at the instructions to the Form 3903.
And if you begin paying back your student loans, don't forget to claim the first $2,500 of interest paid during the year.
