29 Biggest Tax Problems For Married Couples

Preparing your annual income tax return is a chore. It’s even more complex when you’re married. You might have two sets of income, assets, debts and deductions. Further, if you were separated, widowed or divorced during the year, you might have a thorny tax situation.

A qualified accountant can advise you on the basic tax problems that married couples face. For a brief introduction, read through to see 29 of the most significant tax problems married people might encounter. Understanding these challenges can help you get more tax breaks this year.

1_iStock_000060664482_Large-1

1. YOU’RE NOT SURE OF THE YOUR MARITAL STATUS FOR THE TAX YEAR

When preparing taxes, you first need to determine your marital status. It might seem like a straightforward task. However, life is not always so simple.

The IRS considers you to be married if you were lawfully wed on the last day of the tax year. For example, if you tied the knot at any time in the past and were still married on Dec. 31, 2016, you were married to your spouse for the entire year in the eyes of the IRS. The laws of the state where you live determine whether you were married or legally separated for the tax year.

2-Lisa-F-Young-shutterstock_131019830

2. YOU’RE NOT SURE OF YOUR MARITAL STATUS IN A SAME-SEX RELATIONSHIP

Married, same-sex couples are treated the same as married, heterosexual couples for federal tax purposes. However, same-sex couples in a registered domestic partnership or civil union cannot choose to file as married couples, as state law doesn’t consider those types of couples to be married.

3_iStock_000084887817_Large

3. YOU DON’T KNOW WHICH FILING STATUS TO CHOOSE

If you weren’t married on Dec. 31 of the tax year, the IRS considers you to be single, head of household or a qualified widow(er) for that year.

If you were married, there are three filing possibilities:

  • Married filing jointly
  • Married filing separately
  • Head of household

If more than one category might apply to you, the IRS permits you to pick the one that lets you pay the least amount in taxes.

4_iStock_000061890816_Large

4. YOU CAN’T DECIDE WHETHER TO FILE JOINTLY OR SEPARATELY

If you’re married and don’t qualify to file as head of household, you typically have two choices: filing jointly or separately. It’s best to choose the one that allows you to pay the least amount in taxes, which all comes down to your particular circumstances.

Sometimes it makes sense to file separately, said Josh Zimmelman, owner of Westwood Tax & Consulting, a New York-based accounting firm. “A joint return means that your finances are linked, so you’re both liable for each other’s debts, penalties and liabilities,” he said. “So if either of you has some financial issues or baggage, then filing separately will better protect your spouse from your bad record, or vice versa.”

If you file jointly, you can’t later uncouple yourselves to file married filing separately. “On the other hand, if you file separate returns and then realize you should have filed jointly, you can amend your returns to file jointly, within three years,” Zimmelman said.

5_iStock_000077965067_Large

5. YOU ASSUME MARRIED FILING JOINTLY IS ALWAYS THE BEST OPTION

Even if married filing jointly has been your best choice in the past, don’t assume it will always be that way. Do the calculations each year to determine whether filing singly or jointly will give you the best tax result.

Changes in your personal circumstances or new tax laws might make a new filing status more desirable. What was once a marriage tax break might turn into a reason to file separately, or vice versa.

6-Stock-Asso-shutterstock_426626044

6. YOU’RE NOT CLEAR ABOUT HEALTHCARE REQUIREMENTS

The Patient Protection and Affordable Care Act — more commonly known as “Obamacare” — requires that you and your dependents have qualifying health care coverage throughout the year, unless you qualify for an exemption or make a shared responsibility payment.

Even if you lose your health insurance coverage because of divorce, you still need continued coverage for you and your dependents during the entire tax year.

7_iStock_000042386936_Large

7. YOU CHANGED YOUR LAST NAME

If you want to change your last name after a marriage or divorce, you must officially inform the federal government. Your first stop is the Social Security Administration. Your name on your tax return must match your name in the SSA records. Otherwise, your tax refund might be delayed due to the mismatched records. Also, don’t forget to update the changed names of any dependents.

8_iStock_000027213729_Large

8. YOUR SPOUSE DIED DURING THE TAX YEAR

If your spouse died during the year, you’ll need to figure out your filing status. If you didn’t marry someone else the same year, you may file with your deceased spouse as married filing jointly.

If you did remarry during that tax year, you and your new spouse may file jointly. However, in that case, you and your deceased spouse must file separately for the last tax year of the spouse’s life.

In addition, if you didn’t remarry during the tax year of your spouse’s death, you might be able to file as qualifying widow(er) with dependent child for the following two years if you meet certain conditions. This entitles you to use joint return tax rates and the highest standard deduction amount.

9_iStock_000088535355_Large

9. YOU FILE JOINTLY AND YOU’RE BOTH LIABLE

If you use the status married filing jointly, each spouse is jointly and severally liable for all the tax on your combined income, said Gail Rosen, a Martinsville, N.J.-based certified public accountant. “This means that the IRS can come after either one of you to collect the full amount of the tax,” she said.

“If you are worried about your spouse and being responsible for their share of their taxes — including interest and penalties — then you might consider filing separately,’ she said.

10_iStock_000033510522_Large

10. YOU FILE SEPARATELY AND LOSE TAX BENEFITS

Although filing separately might protect you from joint and several liabilities for your spouse’s mistakes, it does have some disadvantages.

For example, people who choose the married filing separately status might lose their ability to deduct student loan interest entirely. In addition, they’re not eligible to claim the Earned Income Tax Credit and they might also lose the ability to claim the Child and Dependent Care Credit or Adoption Tax Credit, said Eric Nisall, an accountant and founder of AccountLancer, which provides accounting services to freelancers.

11_iStock_000083157857_Large

11. YOU DON’T MEET THE MEDICAL EXPENSE DEDUCTION THRESHOLD

To include non-reimbursed medical and dental expenses in itemized deductions, the expenses must meet a threshold of exceeding 10 percent of your adjusted gross income. However, when you file jointly — and thus report a larger combined income — it can make it more difficult for you to qualify.

A temporary exception to the 10 percent threshold for filers ages 65 or older ran through Dec. 31, 2016. Under this rule, individuals only need to exceed a lower 7.5 percent threshold before they are eligible for the deduction. The exception applies to married couples even if only one person in the marriage is 65 or older.

Starting Jan. 1, 2017, all filers must meet the 10 percent threshold for itemizing medical deductions, regardless of age.

12_iStock_000080180769_Large

12. YOU DON’T TAKE ADVANTAGE OF THE MARRIAGE BONUS

Many people complain about the marriage tax penalty. “Married filing jointly may result in a higher tax bill for the couple versus when each spouse was filing single, especially if both spouses make roughly the same amount of income,” said Andrew Oswalt, a certified public accountant and tax analyst for TaxAct, a tax-preparation software company.

However, you might have an opportunity to pay less total tax — a marriage tax break — if one spouse earns significantly less. “When couples file jointly with largely differing income levels, this may result in a ‘marriage tax benefit,’ potentially resulting in less tax owed than when the spouses filed with a single filing status,” Oswalt said.

13_shutterstock_149296427

13. YOU’RE DIVORCED BUT STILL NEED TO FILE A FINAL MARRIED RETURN

If your divorce became official during the tax year, you need to agree with your ex-spouse on your filing status for the prior year when you were still married. As to whether you should file your final return jointly or separately, there is no single correct answer. It partially depends on your relationship with your ex-spouse and whether you can agree on such potentially major financial decisions.

14_iStock_000038737364_Large

14. YOU HAVE TO DETERMINE THE STATUS OF DEPENDENTS AFTER A DIVORCE

Tax laws about who qualifies as a dependent are quite complex. Divorcing parents might need to determine which parent gets to claim the exemption for dependent children.

Normally, the custodial parent takes the deduction, Zimmelman said. “So if your child lives with you more than half the year and you’re paying at least 50 percent of their support, then you should claim them as your dependent,” he said.

In cases of shared custody and support, you have a few options. “You might consider alternating every other year who gets to claim them,” said Zimmelman. Or if you have two children, each parent can decide to claim one child, he said.

15_iStock_000064799905_Large

15. YOU DEDUCT VOLUNTARY ALIMONY PAYMENTS

If you want to deduct alimony payments you made to a former spouse, it must be in accordance with a legal divorce or separation decree. You can’t deduct payments you made on a voluntary basis.

16-goodluz-shutterstock_516820321

16. YOU DEDUCT CHILD SUPPORT PAYMENTS

Even if you don’t take the standard deduction and instead itemize your deductions, you can’t claim child support payments you paid to a custodial parent.

17-Uber-Images-shutterstock_489146788

17. YOU CLAIM CHILD SUPPORT PAYMENTS AS INCOME

Do not report court-ordered child support payments as part of your taxable income. You don’t need to report it anywhere on your tax return. On the other hand, you must report alimony you receive as income on line 11 of your Form 1040.

18-Vlajko-images-shutterstock_574061095

18. YOU DON’T CLAIM ALIMONY YOU PAID AS A DEDUCTION

Unlike child support that isn’t tax deductible, you are permitted to deduct court-ordered alimony you paid to a former spouse. It’s a deduction you can take even if you don’t itemize your deductions.

Make sure you include your ex-spouse’s Social Security number or individual taxpayer identification number on line 31b of your own Form 1040. Otherwise, you might have to pay a $50 penalty and your deduction might be disallowed.

19_iStock_000068517559_Large

19. YOUR SPOUSE DOESN’T WORK AND MISSES TAX SAVINGS

Saving for retirement is important. Contribute to a 401k plan and you will both save money for your golden years and lower your taxable income now. If your employer offers a 401k plan, you can contribute money on a pretax basis, subject to certain limits.

However, nonworking spouses can’t contribute to a 401k because they don’t have wages from an employer.

20_iStock_000069458259_Large

20. YOU MISS QUARTERLY TAX PAYMENTS

Single or married, you might have to pay quarterly tax payments to the IRS, especially if you are self-employed. Make sure you know how to calculate estimated taxes. If you are required to make such payments but do not do so, you might have to pay an underpayment penalty, Rosen said.

All taxpayers must pay in taxes during the year equal to the lower of 90 percent of the tax owed for the current year, or 100 percent — 110 percent for higher-income taxpayers — of the tax shown on your tax return for the prior year, Rosen said. “The problem for married couples is that often they do not realize they owe more taxes due to the combining of the two incomes,” she said.

You should be proactive each year. “To avoid owing the underpayment penalty, make sure to do a projection of your potential tax for 2017 when you finish preparing your 2016 taxes,” she said, adding that you should make sure to comply with the payment rules outlined above.

21_shutterstock_277836518

21. YOU PHASE OUT OF PASSIVE LOSSES

Crystal Stranger — a Los Angeles-based enrolled agent, president of 1st Tax and author of “The Small Business Tax Guide” — said she sees a lot of married couples who have issues with passive loss limitation rules.

“With these rules, if you have a passive loss from rental real estate or other investments, you are allowed to take up to $25,000 of passive losses against your other income,” she said. “But this amount phases out starting at $100,000 (of) adjusted gross income, and is fully lost by $150,000 (of) adjusted gross income.”

Married filers lose out, as the phaseout amount is the same for a single taxpayer as for a married couple. “This is a big marriage penalty existing in the tax code,” Stranger said. “It gets even worse if a married couple files separately. The phaseout then starts at $12,500, meaning almost no (married filing separately) filers will qualify.”

22-Monkey-Business-Images-shutterstock_558995644

22. YOU CLAIM A CHILD AS A DEPENDENT, BUT YOUR INCOME IS HIGH

You are not obligated to claim your kids as dependents on your own tax return. In fact, it might be beneficial not to claim them.

“High earners lose the personal exemption after crossing certain income thresholds,” said Nisall. So in some cases, it might make more sense to let working children claim the exemption for themselves on their own return, he said.

23_iStock_000053717494_Large

23. YOU MISS OUT ON THE CHILD TAX CREDIT

Married couples might be able to claim the Child Tax Credit up to a limit of $1,000 for each qualifying child.

“The Child Tax Credit phases out starting at $55,000 for couples electing to use the married filing separately filing status, and (at) $110,000 for those choosing the married filing jointly status,” said Oswalt. “But married couples receive twice the standard deduction that individuals receive, so the phaseout limitations may not negatively impact a married couple’s return if they choose to file jointly.”

24_iStock_000063646599_Large

24. YOU NEGLECT THE TAX BREAK FROM A HOME SALE

The IRS provides a tax break when you sell your home, subject to certain conditions. Generally, you must meet a minimum residency period by owning and living in the house for two of the five years previous to the sale.

A single person who owns a home that has increased in value can qualify to exclude up to $250,000 in gains from income, said Oswalt. However, married people can exclude up to $500,000 in gains. This rule can become tricky if one person in the couple purchased the house prior to marriage.

“If you are married when you sell the house, only one of you needs to meet the ownership test for the $250,000 exclusion,” Oswalt said. “You both must meet the residency period to exclude up to the full $500,000 of gain from your income, however.”

25_iStock_000085047395_Large

25. YOU DON’T CLAIM THE CHILD AND DEPENDENT CARE CREDIT

Married tax filers might be eligible for the Child and Dependent Care Credit if they paid expenses for the care of a qualifying individual so that they could work or look for work. The rules for who can be a dependent and who can be a care provider are strict. This credit is not available if you file separately.

26_iStock_000040518654_Large

26. YOU CAN’T DEDUCT STUDENT LOAN INTEREST

If you’re paying back student loans, you might be looking forward to taking the student loan interest deduction. However, if you’re married, it might not be so easy to do that.

“For a single filer, the deduction begins to phase out when the taxpayer’s adjusted gross income is greater than $65,000,” said Oswalt. “This amount is doubled to $130,000 when filing jointly.”

“So if both spouses are making $65,000 or less, then their deduction will not be affected by the phaseout,” he explained. “However, if one is making $60,000 and the other $75,000, the deduction begins to phase out, which will ultimately result in a larger tax bill.”

Young woman playing slot machines at the Casino

27. YOU INCORRECTLY ACCOUNT FOR GAMBLING WINS AND LOSSES

Imagine a married couple where both spouses like to gamble in Las Vegas. He’s not so lucky and has losses, while she has winnings. If they file a joint return, they might have to report the gambling winnings as taxable income. Meanwhile, the losses might be deductible if the couple itemizes their deductions instead of taking the standard deduction.

However, they can’t take the amount of gambling winnings, subtract the losses and claim the net amount as winnings. Instead, they must report the entire amount of gambling winnings as income, whereas the losses are reported as an itemized deduction up to the amount of the winnings. The IRS requires you to keep accurate records of your winnings and losses.

28_iStock_000083167945_Large

28. YOU BECAME A VICTIM OF TAX IDENTITY THEFT

Identify theft is a financial nightmare, no matter how it happens. Tax identity theft happens when someone files a tax return using one or both of the spouse’s Social Security numbers in hopes of scooping up your legitimate refund. If this happens to you, “contact the IRS immediately and fill out an identity-theft affidavit,” said Zimmelman. “You should also file a complaint with the Federal Trade Commission, contact your banks and credit card companies, and put a fraud alert on your and your spouse’s credit reports.”

29-Steve-Heap-shutterstock_364821701

29. YOU CAN’T GET YOUR 2015 RETURN

The IRS and state tax agencies work to develop safeguards to avoid identity theft related to tax returns. In 2017, they will be particularly concerned about the implications of taxpayers who file using tax software.

The IRS has alerted taxpayers that they might need to have their 2015 adjusted gross income handy if they are changing software products this year. This number might be required to submit your return electronically.

Getting your 2015 adjusted gross income might be difficult if you are a member of a divorced couple that is not on positive terms, or that hasn’t even been in contact the past few years.

However, you still have options. You might be able to get the information if you go to the IRS website and use the Get Transcript service.

 

 

Written By: Valerie Rind
Source: GOBankingRates

The Not-Rich Kid’s Guide to Graduating from College with Almost No Debt

 

Provided by Vox

 

I was raised in a working-class neighborhood near Dallas by my mother, an immigrant from Vietnam. I attended the public schools nearby. We had metal detectors, drug searches using police dogs, a vice principal who was shot by a BB gun at a school assembly, and a teacher who was hospitalized after students put staples in her coffee — and that was just at my middle school.

I avoided the stress of dealing with drugs and gangs by routinely skipping classes. When I was 16, my high school principal told me that my spotty attendance was hurting the school’s funding, so she gave me an ultimatum: I could drop out, or I would be given a large truancy fine. Unable to afford the fine, later that week I became a high school dropout. (More accurately, I was a pushout).

I had to wait a few months until I turned 17 to become eligible to take the GED exam in Texas. Since I had an open schedule, I thought I’d get a full-time job. At an interview with Office Max for a position assembling office chairs, the manager was obviously disappointed that I did not have a high school degree, and I did not get the job. When I realized that I didn’t meet their hiring standards to work in the back of the building screwing armrests into chairs, I decided I had to go to college.

But then came the question of how to pay for college. College costs are sky-high. About 70 percent of students who graduated with a bachelor’s degree in 2012 borrowed money—of these students, the average debt was $29,400. After watching my mother struggle with debt, I was determined to avoid loans as much as possible by making every dollar that went toward college expenses count. And I succeeded: I managed to graduate from the University of North Texas with a degree in sociology in five years with a single loan for $4,000. I now attend a PhD program at the University of Pennsylvania.

Graduating from college with minimal debt isn’t easy. There’s a reason there’s a student debt crisis. But some media accounts would have you believe that students have no choice but to take on large debts — and be haunted by them for decades after they graduate. And in my experience, that’s just not true. I know the challenges for every student are different, but these are the eight ways I made college as affordable as possible.

1) I took as many community college courses as I could

I passed the GED and began considering what college to attend. After my rocky high school career, my family and I weren’t sure how I would fare in college, so we didn’t want to spend a lot of money.I also hadn’t taken the SAT, so I wasn’t even sure if I could apply to universities. So I enrolled at a nearby community college with open admissions and low tuition with the intent of earning my associate’s degree.

While community colleges are less prestigious than four-year schools, they are also a lot cheaper. According to the US Department of Education, the average tuition and required fees at a four-year institution amount to $8,070 for an academic year. At a two-year institution, it is “only” $2,792. By these numbers, if you attend community college for two years instead of a university, you would save an average of about $10,500 in tuition, plus the cost of living at a dormitory that is often mandatory.

And at least in my case, the education I got at community college was in some ways superior to what is experienced at four-year colleges. I took all of my “basic” or “core” classes (math, English, sciences, history, etc.) at community college, where classes usually have between 20 and 40 students. The same class at a university would have had more than 100 students. As a result, community college professors are more likely to learn students’ names, to grade papers and exams themselves, and to develop relationships with students. As a student who struggled initially, I needed that close attention or else I might have slipped through the cracks.

2) When it came time to transfer, I resisted the allure of the “prestigious” college

After two years of community college, I had won a scholarship and I had a solid GPA — around a 3.5. I could’ve applied to my state’s flagship universities (the University of Texas Austin or Texas A&M University) or a private college like Southern Methodist University. After the embarrassment of dropping out of high school, part of me wanted to show people that I was more than a dropout — to be able to brag that I attended a prestigious university like these.

But I only applied to one college — the University of North Texas, which is not even ranked by the US News and World Report. It was a nearby state university with low tuition costs, and it meant I didn’t have to deal with relocating. My family was fine with the decision. Honestly, attending any university impressed my mom.

Would I have received a substantially better education at a more prestigious university? I doubt it. The truth is that university professors are hired because of their research, not their teaching. Attending a more prestigious university would have meant being taught by professors who had better publication records, but that does not necessarily translate into being better teachers. In fact, in some ways you expect the opposite — the more invested professors are in research, the less time they have for mentoring and teaching.

The best argument for attending a prestigious university is name recognition and alumni connections. If you plan to apply to work at a Fortune 500 company, those things matter a lot. But for students like me who just want to enter a middle-class profession, those benefits aren’t very important. While there are other merits to attending prestigious colleges — like having more dedicated students around you, better libraries, etc. — for me, they weren’t tangible enough to justify paying for higher tuition costs.

3) I learned the hard way to take placement exams seriously

After I met with admissions to finalize my application to the community college, I was told that I should take my placement exams because students are unable to register for classes until they take them. I was surprised — I had never heard of placement exams. Still, I felt pressured to take the exams that day.

When I took the math exam, my score was so low that it required me to take two remedial classes. When the administrator was explaining this to me, she asked me if I had used a graphing calculator — I hadn’t, because I assumed it wasn’t allowed! She suggested retaking the exam to see if it would improve my score. The calculator, and the retesting fee, was not cheap. But my score improved, and I “only” had to take one remedial course instead of two.

According to the most recent figures from the Department of Education’s National Center for Educational Statistics report, 20 percent of incoming students take remedial courses. In some states the average is much higher, such as 51 percent of students in New Mexico. These classes cost money but do not count as college credits and are only required if it is determined that the student is “not college ready.”

You can avoid paying for classes that you don’t need by taking the placement exams seriously and researching the format and what tools you are allowed to use.

4) I used ratemyprofessor.com to avoid terrible professors

My first year in college, I had a terrible history professor. I didn’t know what was going to be on the exam or how to prepare for it. This class was beyond difficult — it was poorly taught, it was confusing, and it was frustrating. I vividly remember the professor blaming the students after the class averaged a D on the first two exams.

After that, I was determined to avoid terrible teachers, so I began looking up prospective professors on ratemyprofessor.com. This website allows students to rate a professor by a few different metrics (such as clarity and easiness). The ratings are subjective, and because of that, you should these ratings with a grain of salt, as every professor with a dozen reviews will have some negative ones.

But students can pretty universally agree on what a terrible professor is. So before I registered for a class, I always looked up the instructor on ratemyprofessor.com. If they had overwhelmingly negative reviews, I did not enroll in the course. Each year, this helped me identify a few professors to avoid, which likely saved me from having to withdraw from a poorly taught course or earning a low grade.

5) I found a mentor who cared about my success

The hardest semester of my life was my first semester at a community college. I felt like I didn’t fit in on campus. The students, administrators, and professors intimidated me. So I tried to be invisible — if I could avoid being on campus, I did.

My English professor, Dr. Lisa Roy-Davis, required students to meet with her individually halfway through the semester (an approach that would not be possible at a university with large introductory courses). I was quiet during the meeting, which made it somewhat awkward, but we got to know each other better. At the end of the semester, I told her I was considering withdrawing from college to focus on working.

To my surprise, she encouraged me to keep taking classes and offered to loan me books by authors who wrote about their struggles in college. I began emailing her summaries of what I felt about the books — and questions about what I should read next.

The more I talked to her, the more comfortable I felt on campus. While the feeling of being an outsider never totally vanished, I no longer wanted to be invisible. I became a more engaged student. My grades improved. I began going to office hours of other professors to ask questions, which is how I found other mentors.

A mentor will answer the questions that you are afraid to ask others, instill confidence in you, and help you navigate college. They don’t have a precise monetary value, but they will help you graduate from college.

6) I learned the tricks to applying for financial aid and scholarships

Financial aid was somehow terrifying and liberating for my family at the same time. Because my mother was low-income, I qualified for federal Pell Grants that helped pay for my tuition and books. But applying for those grants was intimidating. The Free Application for Federal Student Aid (FAFSA) is universal — wealthy students applying to private schools use the same application as working-class students applying to community colleges.

That means students like me have to answer questions using financial terms that my family had never heard of. For example, FAFSA asks whether your parents made “Payments to tax-deferred pension and retirement savings plans (paid directly or withheld from earnings), including, but not limited to, amounts reported on the W-2 forms in Boxes 12a through 12d, codes D, E, F, G, H and S.”

Some families might have parents who are familiar enough with finances to know what this question meant — to my mom and me it was like reading a foreign language. We worried that we were going to unintentionally lie on our application, which we feared was a prosecutable offense. Looking back, I know that sounds silly, but it shows how daunting this process was.

I eventually realized that the answer to questions about investments and pensions was “0,” and that FAFSA’s helpline is surprisingly easy to use. I also figured out that I should complete my application before the “priority deadline” to maximize my chance of being awarded a grant.

In addition to financial aid, I learned how to apply for scholarships. In my sophomore year, I was shocked when Dr. Roy-Davis told me I should apply for the Student Leadership Academy, the most prestigious program at my community college. The application required two letters of recommendation, a transcript, and a personal essay. I didn’t think I fit the “leadership” profile — I didn’t have any volunteer experience, my GPA was about a 3.3, and I barely spoke in class. Why apply for something I won’t win?

Despite my protests, Dr. Roy-Davis insisted that I apply. She coached me through how to ask for a letter of recommendation, what the application process is like, and how to write a personal essay.

The biggest thing I learned was that you don’t have to be better than every student — you just have to be better than the other students that apply. And a lot of awards and scholarships don’t have nearly as many applications as you would think. I was accepted into the program and won a $500 scholarship.

The scariest thing about applying for awards or scholarships is feeling like a fraud. This is impostor syndrome, and minorities are more likely to feel it. Essentially, you will underestimate your qualifications and attribute any previous success to luck, causing you to feel inferior to your peers. The only way to deal with it is to push through it — hopefully with the help of mentors.

7) I bought old textbooks (if my teacher allowed it) to save money

Students spend about $1,200 in college textbooks a year, according to the College Board. In fact, nearly two-thirds of students have skipped buying a required textbook for a course because it was too expensive. My first semester, I was shocked by the cost of textbooks. So I started asking students and professors what I could do to save money. Among the suggestions: buying used textbooks online, renting textbooks online, or buying digital versions of the textbook that were cheaper.

But I learned from a professor that the cheapest option is to buy older editions of textbooks, which are often 60 to 90 percent cheaper. The downside is that textbook publishers routinely shuffle chapters around when they release a new edition every few years because it allows them to call it “new” even if it contains very little new content.

In most cases, you can just use the appendix to find the right chapter if the title of the assigned chapter does not match the syllabus. Still, you should email the professor before the class starts and ask if they believe you can use an older version of the textbook. Most professors will understand why you are asking and reply with whether it is a good idea.

Even if you just did this for half of your classes, you would save about $600 a year.

8) I worked throughout college

During college, I attended college as a full-time student and worked part time. I was tempted to do the opposite — work full time and only take a couple of classes a semester — but I decided that it made more sense to try to graduate as soon as possible. Plus, I was lucky to be able to live at home, which allowed me to avoid taking on a lot of living expenses.

My first job was a custodian at a gas station. I worked the swing shift, which meant that in a given week, I’d have two shifts during the day and two shifts that were from 10 pm to 6 am. While staying up all night mopping, sweeping, and restocking merchandise was challenging, I was glad that they overlooked my GED and gave me a chance to gain some work experience. I later worked in retail and at restaurants.

At times, working while taking classes was difficult. But as long as I had a job with a consistent schedule, I found that I could manage it. And my rule was that I wouldn’t try to work full time while being a full-time student, because it would hurt my grades.

I knew that transferring to a university, even one with low tuition, was still going to cost thousands more. I decided to take a semester off to work full time to save up money. My mom was nervous about me taking any time off, but I felt like one semester wasn’t the end of the world. And it allowed me work a bit less once I transferred.

I managed to graduate at the age of 22 (funnily enough, dropping out of high school caused me to start college a year early). While I was proud that I managed to graduate from college without taking out many loans, I didn’t want to walk across the stage on graduation day. The regalia, the speeches, and the handshake all felt like worthless fluff that would take hours to take part in.

But when I told my brother that I didn’t want to go, he told me that I had to. I was going to be the first in my household to graduate from college — and it meant a lot to them. He was right. My mom cried tears of happiness, and it is one of my favorite memories.

A critic might point out that I saved money to the detriment of my education: I took more community college classes than university courses, I based where to attend not on prestige but on low tuition, and I used old textbooks. But today, I am a doctoral student at the Annenberg School for Communication at the University of Pennsylvania, which is ranked near the top of its field. In addition to a full scholarship, I also receive a living stipend and have won fellowships from the National Science Foundation and Google. Last summer, I interned with the Pew Research Center.

And no one has ever cared where I got my bachelor’s degree or questioned the quality of my undergraduate education.

Written by Alex T. Williams of Vox.com

(Source: Vox)

Looks Like Millennials are Finally Boosting the Housing Market

© Hinterhaus Productions/Getty Images
© Hinterhaus Productions/Getty Images

A greater share of U.S. millennials say they’re likely to buy a home this year, adding to evidence that first-time buyers are finally entering the real estate market and fueling a jump in sales.

A Realtor.com survey of site visitors taken in mid-June showed that about 65 percent of respondents between ages 25 and 34 said they intend to buy a home within the next three months, up from 54 percent in January, according to data released Wednesday at the National Association of Real Estate Editors conference in Miami. The share of millennials visiting Realtor.com with the goal of buying a home increased to 23 percent from 21 percent at the start of the year.

Young buyers, traditionally top drivers of housing demand, are helping to bolster the U.S. housing recovery after years of being hampered by student debt and tight credit. An improving economy, surging rents and the prospect of higher mortgage rates are luring in more homebuyers, especially older millennials starting families.

“We are in the midst of the millennials really seriously getting into the market, and that’s the difference on the existing-home side,” Jonathan Smoke, chief economist at Realtor.com, said during a panel discussion at the conference.

First-time buyers accounted for 32 percent of existing-home sales in May, matching the highest share since 2012, the National Association of Realtors reported this week. Millennials have pulled ahead of the older Generation X as the largest segment of purchasers, according to the trade group.

Marriage, Rents

Life-cycle issues such as marriages and births of children are driving millennials into the homebuying market, as are falling prices for new houses and rising rents, Smoke said.

The share of millennials looking for rentals fell to 20 percent this month from 26 percent in January, according to the survey by Realtor.com, which is operated by News Corp.’s Move Inc. unit. The survey results are based on more than 12,000 respondents from the start of the year to June 15.

The prospect of rising mortgage rates is helping to push younger buyers off the fence, Franklin Codel, head of mortgage production at Wells Fargo & Co., said on the NAREE panel. The average rate for a 30-year fixed mortgage has climbed to 4 percent after falling to as low as 3.59 percent this year, according to Freddie Mac.

In Wells Fargo surveys of potential homebuyers, 93 percent of millennials indicate they want to own a home at some point in their lives — despite some people’s beliefs that young Americans are less interested in buying properties and more willing to be lifelong renters, Codel said.

“It’s just a question of when and preparedness,” Codel said.

Student Debt

One factor limiting millennial purchases is the “tremendous amount” of student debt they’re burdened by, said Dennis Carlson, deputy chief economist at Equifax Inc.

Americans under the age of 30 had a total of $369 billion in student debt last year, up from $146 billion a decade earlier, according to data from Equifax released Wednesday.

“I don’t think it’s the only issue holding millennials back,” Carlson said at the panel, adding that unemployment and underemployment are keeping some young people from making property purchases.

First-time buyers are likely to have the most impact on the existing-home sales market because prices for new houses tend to be higher. They’re entering the new-home market from a “virtually nonexistent” level, and remain constrained by tight credit, Stuart Miller, chief executive officer of Lennar Corp., said on the homebuilder’s earnings conference call Wednesday.

“The doubling up of the millennials during the downturn will ultimately unwind and give way to household formation,” Miller said. “We’ve already seen evidence that this is beginning to happen.”

Written by Prashant Gopal and Daniel Taub of Bloomberg

(Source: Bloomberg)