Tax Deductions for Teachers

Note: You can see this post in video form by clicking here

The first tax deduction that a teacher can have is small, capped at $250. This is for educator expenses. It is for the money they spend in class. The expenses include (but are not limited to): books, craft items, additional equipment for students, curriculum related DVDs, classroom decorations, awards and scholarships, newspapers and magazines.

If you are married to another teacher, you can take a total deduction of $ 500.

This deduction is taken on Form 1040 so no matter whether you take a standard deduction or an itemized deduction, you will get this educators expense tax deduction!

You can also take tax deductions for associations and membership fees. If you pay your own pocket (or out of salary), union dues, alumni associations, or parent teacher groups, those expenses are tax deductible.

These deductions may be taken only if you itemize your deductions on Schedule A. These fall into the “Job expenses and miscellaneous deductions” category.

This one applies to everyone, not just teachers. Donations to charities are tax deductible. This includes donations to the school. Donations can include the purchase of library books, materials for the classroom, or simply giving a monetary donation to the school to help fund an improvement project. These donations must come from the pocket of the teacher and be given to the school. Donations are tax deductible in Schedule A.

Teachers can also deduct the cost of training or continuing education. The deduction falls under the Lifetime Learning Credit on Form 8863. Teachers usually are required to take courses to stay current in their field and will take continuing education courses to satisfy those requirements or to earn higher designations. The credit is 20% of the cost of their studies, limited to $ 2,000 per year. Costs include (but are not limited to) tuition, course registration, lab fees, materials and supplies, textbooks and tuition.

Investing in a retirement plan is tax deductible as well. These plans include the 403b plan, 457 plan, and IRAs. If you are in a 25% tax bracket, every $100 you invest will only feel like $75 less dollars from your paychecks.

As you can see, by investing $100 this teacher’s take home pay was $75 less. But, the teacher was able to protect $100 from being taxed. In this example, with a 25% tax rate, that means $25 more in total in the teacher’s combined take home pay & retirement account. The higher your tax rate, the more attractive this becomes from a tax savings standpoint. That doesn’t even mention the benefits of saving additional amounts for your retirement. Click the link if you would like to read more on retirement plans for teachers.

Note: I apologize for the above example, it looks like a table on my website editor but on the actual page there is no table structure. I am working to figure out how to fix this, in the mean time I hope I have still been able to illustrate the point.

Teachers may also include expenses such as travel related to their employment.  An example is that this will cover your expenses during a trip to a teacher’s convention.

EDIT: Costs here include The cost of parking, tolls, taxis and public transport if you are required to travel to attend seminars, meetings, or training courses (if you need to stay away overnight you can also claim for the cost of all meals and your accommodation).

Deducting the cost of using your car for work includes travel to pick up supplies for teaching, to attend meetings, take training courses, go to conferences, on excursions or cultural events as part of your teaching obligations. Also if you are traveling between 2 places of work (to claim for car costs it is usually best to keep a diary record of the number of miles you travel during the year for work purposes and then we can calculate the amount of total miles you can take on your tax deduction for the year). 2 places of work could mean from school to private tutoring and it also includes between the school where you teach and the school where you take continuing education classes.

But unfortunately, you cannot deduct travel from home to school and vice versa.

The last is if you do a little tutoring outside of your regular occupation. If you are paid directly by the student instead of by the school, you are considered self-employed in this instance. You can deduct the cost of traveling to meet students, the cost of supplies, and all fees that may be incurred. These are made on Schedule C, which is the self-employment section. You also have the opportunity to take half of the self-employment tax deduction Form 1040

These tax savings may not be enormous, but you may find you have several hundred to several thousand extra dollars a year instead of it being in the hands of Uncle Sam.

Disclaimer

This is for informational purposes only and should not be misconstrued as tax advice; consult a tax advisor for advice on specific circumstances.

Like what you saw? Share it!

• 

Tags: Tax Deductions for Teachers, Teacher Retirement, teacher tax deductions