Recent Grads Should Keep Tabs

The next rule says you must work at the new location for at least 39 weeks during the first 12 months.

Assuming you qualify, you can then deduct the cost of moving yourself and your belongings from location A to location B. Bear in mind that only the un-reimbursed costs associated with the actual move are deductible. If you took trips back and forth to your new location to scout out housing prospects, local bars or open a bank account, forget deducting the costs of those trips.

The good news is that moving expenses are reported on line 29 of your Form 1040, and there's no limitation on the amount you can deduct. So tally all your out-of-pocket costs and keep your receipts.

A Few More Tax Tips

Unless you're uber-ambitious and already bought an apartment, odds are good you won't be itemizing your deductions on your tax return. With that, there's little tax incentive to make charitable contributions.

So consider pushing your donations off until next year, especially if you're planning on buying that deluxe apartment in the sky next year, suggests Scharin. At least that way you'll get more of a tax benefit from your contributions.

Remind your parents that since you're in a lower tax bracket, they can gift assets to you and take advantage of your lower capital-gains tax. You're probably only paying 5% at this early point in your career, as opposed to your folks' 15% cap-gains rate. You've got to get that done before the year's end, if they want it to count for 2006

And finally, consider opening a Roth IRA. Since you're in a lower tax bracket now, you can make after-tax contributions without feeling much pain. In addition, a single person can open a Roth if his AGI is $95,000 or less. A full $4,000 contribution for the year is allowed.

So start thinking about some tax planning. While that first paycheck makes you want to get out and party, the first check you write to Uncle Sam will make you want to puke.