Tax Tips for New Grads

It's June, and thousands of students across the country are trying on their graduation gowns and getting excited for the big day. I’d like to congratulate all of the new graduates on their successes! Whether you’re graduating from high school, or leaving college with the hope of starting a career in your chosen field, odds are you haven’t gotten much in the way of tax education. Since the subject of taxes might be new for you, here are few things that will help you on your way to being a star tax student.

Since you may never have had to file a tax return before, here are a couple of things to keep in mind. Start with the W-4 form (your new employer will give this to you). Your W-4 is how your employer figures out how much income tax to withhold from your paycheck. When you fill it out, you should aim to withhold as close to your actual tax bill as possible. If you don’t withhold enough, you’ll have a nasty tax bill when you file your taxes in April. If you withhold too much, you are giving the government an interest-free loan while losing out on money you could be using now.

You may have been told that taxes are something that you only need to think about in April, the IRS deadline for filing your income tax return. The truth is every purchase you make, every cent you earn, every decision about how you live will impact your taxes. Taxes are a year-round sport, and so you should be in “tax training” every month out of the year. Check out a blog that I wrote on the subject: Year Round Tax Planning Tips. To help you organize your taxes, check out my my free 2010 tax calendar. It has important dates and reminders, which are especially useful if you plan on opening your own business or if you will be freelancing your services.
You can also find Tax Info For New Grads in my blog from May 5, 2010.

To every new grad out there I say, Congratulations and good luck on your new adventure!