Taxes: the good, the bad, and the ugly.
While we don’t want to pay them, we must, and if we don’t, well then, we will be worse off than we started. It is important to be smart when it comes to your income taxes because there are many credits and deductions available.
It is helpful to speak with financial and tax advisors from National Educational Services that can work with you to ensure you are taking advantage of all the options available.
Tax Perks of Being a Teacher
While teachers do have to pay income taxes, there are some special credits and deductions that are made especially for educators. Let’s look at some of the tax benefits available for all teachers!
The Educator Expense Deduction
This specific deduction allows teachers to be reimbursed for up to $250 of classroom expenses, such as planning materials, in-class supplies, and any other item that is paid for out of pocket to be used in the classroom. One of the good things about this above the line deduction is that it means even if you do not itemize and take the standard deduction, you are still able to take part in this deduction.
In addition to this, if your spouse is also an educator, you can deduct up to $500 total and split up the deduction, depending on how much each of you spends.
Unreimbursed Employee Deductions
Items that fall into this category are items that you would take on your itemized deductions sheet. This would be the perfect deduction to talk to your tax advisor about. Some items that you would want to consider for this deduction are listed below:
Books and newspapers.
For personal or professional use.
If you use your car for school purposes, possibly from school to school, or for field trips, that mileage can be deducted. It is very important to note that your commute cannot be included in your deduction of miles. Regardless of how far your commute to work is each day, the miles, unfortunately, cannot be deducted.
Also, if you participate in any side work where you will receive 1099 instead of a W2, you can open the door to mileage deductions for that specific job (again, it is important to talk to a tax advisor for this).
Student Loan Interest
Teachers can do an above-the-line deduction for the interest on their loans. Additionally, parents that are paying loans for their children can deduct the interest as well.
Education Credits and Deductions
Professors and other teachers that want to renew their teaching license and/or freshen up their skills can take advantage of the lifelong learning credit.
There is also a tuition and fee deduction available. Those interested in this deduction should talk to their tax advisor to learn more.
It is easy to look right past credits and deductions that you as teachers can take advantage of.
Be informed and benefit from what you can, because who wants to pay more taxes than necessary? Speak with an educational consultant from National Educational Services.