You have a newly minted diploma and high hopes for landing your first job. But before you climb that first rung of the career ladder, there are some basic rules to understand about income taxes. Think of it as Taxes 101.
Filing Your Tax Return
So you're getting ready to file your first tax return as an independent person. First question: Who gets to claim an exemption for you and shelter $3,950 of 2014 income from the IRS? You or your folks? The answer depends on the circumstances, not on the results of a family meeting.
Your parents get the exemption if you were under 24 at the end of 2014, were a full-time student in at least five months of the year, lived at home more than half the year (living at college while you finished up can count as living in your parents' home) and did not provide more than half of your own support. If you're older or did provide more than half of your own support, then you claim your own exemption. This is an either/or deal. If your parents qualify to claim you as a dependent, you cannot claim your own exemption.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Student Loan Interest
As soon as you can claim your own exemption (the value usually goes up by $50 each year to keep up with inflation), you also can start deducting interest paid on your student loans. You can write off up to $2,500 a year in interest on those loans. Even if your parents pay interest on a loan for which you are liable, you can deduct that interest. But you can't use the 1040EZ form. To claim the student loan interest deduction, you'll have to use the longer 1040A or even-longer 1040 form.
There's a separate line for student-loan interest, and you can claim it even if you don’t itemize deductions. The right to claim this write-off phases out at higher income levels, starting out at $65,000 for individuals and $130,000 for married couples filing jointly in 2014.
Job Hunting
While it can be costly printing your résumé and traveling to interviews for your first job, you can't deduct those expenses. But don’t assume that ban is forever: The cost of searching for subsequent jobs can be deducted . . . as long as you’re looking for a new position in the same line of work rather than trying to change careers. Note that this write off is considered a miscellaneous expense, so you get a tax benefit only if you itemize deductions and only to the extent that all your miscellaneous expenses exceed 2% of your adjusted gross income.
Moving Expenses
Unlike job-hunting expenses, you can deduct the cost of moving to take your first job. And, you don’t have to itemize to use this tax-saver. The key is that you must move more than 50 miles from your current home. Meet that test and you can deduct moving expenses that are not reimbursed by your new boss, including a mileage allowance for driving your own car. For moves in 2014, you can deduct 23.5 cents a mile.
-
My First $1 Million: Real Estate Investor, 54, Rural MidwestEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
No Budget Hacks: 5 Strategies Help Build Significant WealthCutting out your daily latte might make you feel virtuous, but tracking pennies won't pay off. Here are some strategies that can actually build wealth.
-
RMD, Roth, and SS: Test Your Knowledge of Retirement Tax RulesQuiz Don't let the IRS catch you off guard. Take our quiz to reveal common retirement tax rules that could save (or cost) you thousands.
-
Child Tax Credit, EITC, & More: Three IRS Tax Breaks Getting Bigger SoonTax Credits Key family tax breaks are higher for 2026, including the Earned Income Tax Credit and the Adoption Credit. Here's what they're worth.
-
Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025Tax Tips If you’re retired and filing taxes, these five tax credits and deductions could provide thousands in relief (if you qualify).
-
IRS Names Its First CEO: But He’s Also Still Running Social SecurityTax News Will this new role make it difficult to address emerging issues like budget and staffing cuts and customer service concerns?
-
Three Popular Tax Breaks Are Gone for Good in 2026Tax Breaks Here's a list of federal tax deductions and credits that you can't claim in the 2026 tax year. High-income earners could also get hit by a 'surprise' tax bill.
-
IRS Phasing Out Paper Checks: What Happens After September 30?Tax Changes Avoid delays when IRS tax refunds and Social Security paper checks are cut off. Here’s what to know.
-
Ask the Editor, September 12: Tax Questions on 529 Plan Rollovers to a Roth IRAAsk the Editor In this week's Ask the Editor Q&A, we answer four questions from readers on transferring 529 plan money to a Roth IRA.
-
IRS in Turmoil: GOP Budget Cuts and Staff Shake-Ups Threaten Taxpayer ServicesIRS Republican lawmakers advance a controversial budget bill that would gut IRS funding further, risking your 2026 tax filing season.
