Thank goodness for teachers! If you are a teacher, as this school year draws to a close, you might have your thoughts more on what you will do during your well-deserved vacation than on taxes, but saving on taxes is really a year-round project. So before you close the books and lock your classroom door, here are five things you should know.
- Keep receipts for classroom materials you buy. The classroom budget is never enough, so this summer, as you begin to acquire supplies you’ll need for the upcoming school year, keep track of the receipts for things such as classroom supplies, materials, books, computer equipment, software, other equipment, and supplementary materials that you pay from your own pocket. Although the Educator Expense Deduction worth a $250 tax deduction even if you don’t itemize was only extended through 2014, you can still deduct your expenses as an employee business expense if you itemize your tax deductions. Also, make sure you keep track of your receipts in case Congress extends the Educator Expense Deduction again as they have done in the past.
- Keep track of mileage. Many teachers have duties that extend far beyond the classroom. You may coach a sport or lead after-school activities away from your school, do home schooling or regularly call on students, or drive from school to school. No matter the activity, the miles can really add up. You can deduct 57.5 cents a mile for all business miles driven if you itemize your deductions.
- Deduct other expenses you incur for teaching. If you pay union dues, buy professional books related to your teaching activities, or have any other expenses that are directly related to teaching, keep track of them so you can claim them as an employee business expense on your tax return.
- Don’t forget continuing education expenses. If you take college or vocational classes, the Lifetime Learning Credit allows you to take a tax credit of 20% of tuition and fees. The tax credit is worth up to $2,000 per tax return, and you don’t have to itemize your deductions to claim this credit. Or you can claim an itemized deduction for the expenses you pay for your work-related education, if it is needed to maintain or improve your job skills or your employer requires you to obtain the education to keep your job.
- Claim a home office deduction if you qualify. If a portion of your home is used regularly and exclusively for activities in connection with your teaching, you may be able to take a home office deduction if your home office is for the convenience of your employer. Many teachers won’t qualify if they have space at school that they could use for business activities such as grading papers. Others fail the test because they don’t have a specific place in their home that is used exclusively for business activities. If you tutor children in your home office or do classes over the internet, those activities might qualify you for the tax deduction.