Wolters Kluwer Takes a Look at Tax Considerations for New College
Graduates
NEW YORK–(BUSINESS WIRE)–New college graduates are hopefully prepared to face the world, but a
few post-graduate tutorials may be helpful to address some of the
practical issues they are likely to face that were not covered in their
course work. They may be moving for the first time from being dependents
on their parents’ tax return to filing their own tax return. As they
start their new job, they will be faced with issues such as tax
withholding, retirement benefit elections, health benefit elections, and
others that all have tax implications. Just as they had to study for
their classes, studying up for the new tax world before them can be very
beneficial and move them to the top of the class.
“College may have prepared you for your profession, but it may not have
prepared you for tax proficiency,” said Mark Luscombe, JD, LLM, CPA and
Principal Federal Tax Analyst for Wolters Kluwer Tax & Accounting.
“Unless your specialty happened to be tax, getting a tax expert on your
team early can help guide you through many tax-related decisions as you
move from the halls of ivy to the halls of business.”
Here are some of the tax issues that college graduates should
contemplate:
-
Coordinate taxes with your parents. Your parents may have been
claiming you as a dependent on their tax return. Once you enter the
work force, that probably has to change -
Student loan interest. You or your parents may have been
getting tax breaks for tuition, fees and other college expenses while
in school. Tax breaks can continue for interest paid on outstanding
student loans after graduation, but the rules get a little complicated -
Continuing your education while starting work. Work-related
continuing education is no longer deductible as a miscellaneous
itemized deduction, but it may still qualify for exclusion from income
if part of an employer provided educational assistance program. The
Lifetime Learning Credit may also be available for graduate school or
other post-college training -
Retirement accounts. It is never too soon to start contributing
as much as possible to retirement accounts, such as a 401(k) plan
offered by your employer and an IRA or Roth IRA account -
Health insurance. In addition to an exclusion for
employer-provided health insurance, there are also tax-advantaged
Health Savings Accounts and Flexible Spending Accounts to consider -
Graduation gifts. Gifts are not taxable to the recipient, and,
unless very large, may not be taxable to the giver either -
Side gigs. Students often have had some experience working side
gigs while in school, either as an employee or on their own. Keep good
records of business-related expenses, which can be deducted if
self-employed. Self-employed persons may also have to pay estimated
taxes and self-employment taxes -
Moving expenses. Prior to 2018, the expenses of moving to a new
job could qualify for a tax deduction. However, as a result of the Tax
Cuts and Jobs Act, those expenses are no longer deductible except for
members of the Armed Forces -
Part-year withholding. Starting a job mid-year can result in
over-withholding based on the assumption you earned the same amount
for the entire year. Check with your employer to see if part-year
withholding is available -
Record-keeping. Keep a file of tax-related documents, such as
expense receipts and tax statements, so that you are ready for your
tax professional at tax return preparation time
A little tax knowledge can help you get a great start to your career and
later in life, as well.
About Wolters Kluwer
Wolters
Kluwer Tax & Accounting is a leading provider of software
solutions and local expertise that helps tax, accounting, and audit
professionals research and navigate complex regulations, comply with
legislation, manage their businesses and advise clients with speed,
accuracy, and efficiency.
Wolters Kluwer Tax & Accounting is part of Wolters Kluwer (WKL), a
global leader in professional information, software solutions, and
services for the healthcare; tax and accounting; governance, risk and
compliance; and legal and regulatory sectors. We help our customers make
critical decisions every day by providing expert solutions that combine
deep domain knowledge with advanced technology and services.
Wolters Kluwer reported 2018 annual revenues of €4.3 billion. The group
serves customers in over 180 countries, maintains operations in over 40
countries, and employs approximately 19,000 people worldwide. The
company is headquartered in Alphen aan den Rijn, the Netherlands.
Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are
included in the AEX and Euronext 100 indices. Wolters Kluwer has a
sponsored Level 1 American Depositary Receipt (ADR) program. The ADRs
are traded on the over-the-counter market in the U.S. (WTKWY).
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Contacts
Marisa Westcott
212-771-0853
[email protected]
