10 Tax Tips for Teachers

It's that time of year again, when we begin collecting our receipts and documents from 2012 in anticipation (or in dread) of filing our taxes. As educators, there are some additional deductions that may be available if you itemize deductions. Who qualifies? If you are a teacher, instructor, counselor, principal or aide for grades K-12, you will qualify if you work at least 900 hours during the school year (homeschool parents unfortunately do not qualify). We've pulled together ten tips from tax experts.

Although this post provides general information about tax laws, please consult your tax professional for advice about your particular situation. The views expressed in this post are not necessarily those of AnsMar Publishers or Excel Math. We hope to give you some tips and places to look for additional deductions as you get your taxes ready this year.

1. If you pay property taxes, only deduct those taxes you paid in 2012. Some cities and tax authorities bill you a year behind, but that doesn't matter. You can deduct only those property taxes you or the holder of your escrow account actually paid in the year 2012.  
2. If you itemize, you can deduct up to $250 of classroom expenses that weren't reimbursed. Keep your receipts (or hunt down your credit card statements) for out-of-pocket classroom supplies you purchased in 2012. My husband teaches middle school and  purchases paper, Jolly Rancher treats (one per student each Friday that they earn Preferred Technology Time), and other supplies for his classroom each year. We keep our receipts, and it's amazing how quickly small purchases add up. It definitely helps to include that deduction on our taxes in the years we itemize. If you and your spouse both teach, you can each claim up to $250, but you can't claim the same materials, so keep separate receipts. Read more on the TurboTax blog.
3. Don't confuse your escrow amount for the taxes you've paid. If your mortgage lender sets aside money each month in an escrow account to pay for property taxes, don't simply multiply the total by 12. Use the official statement from the lender, listing actual taxes paid. (Often the escrow account covers other expenses and may even pad the escrow amount to make sure all fees and taxes are covered.)
4. Think twice about claiming the home-office deduction. It's a complex calculation that often doesn't amount to much. What's more, if you make a profit when you sell your home, this deduction must be recaptured. It can also trigger an audit. Bottom line: claim it only if you feel it's worth it.
5. Some job-related expenses may be deductible, but only if you itemize your deductions on Schedule A and only if that item or service is common and accepted in your line of work and is appropriate and helpful to your job. Your unreimbursed business expenses must total more than 2 percent of your adjusted gross income (AGI), and they only count if your employer doesn't reimburse you for them. Commuting to work, for example, is not covered. Read more.
6. If you use tax software to prepare your taxes, you may be able to deduct the amount of the software you purchased in 2012. You must have itemized your deductions, and be sure to keep the receipt.
7. Be cautious about claiming energy tax credits. Tax credits for installing energy-efficient windows and appliances were greatly reduced for 2012. If you're claiming a credit, follow the instructions carefully, as the forms can be complex.
8. You may notice additional notes on your W2 form this year. Not only your retirement contributions take out of your paycheck, but also any payments to healthcare and medical savings accounts may show up on your W2 form for 2012.
9. Save your receipts. Not only for your tax software purchases, but home office expenses, educator expenses, home maintenance and repairs, manufacturer's certifications for energy tax credits, and lender statements for property taxes paid.
10. A portion of your vehicle registration fee in California may be deductible. You won't be able to deduct the entire amount you paid the DMV, but save your payment receipt to see if a portion of the fees you paid in 2012 may be deductible. This only applies if you itemize your taxes and use Schedule A. If you do not have your renewal notice to find the vehicle license fee you paid, try the online fee calculator. For additional California tax information contact the Franchise Tax Board at 1-800-338-0505 or www.ftb.ca.gov.

If you have job-related education expenses, your textbooks and tuition may be deductible if  you itemize your deductions on Schedule A and your deductions are more than the 2% of adjusted gross income (AGI) threshold for miscellaneous deductions. There are lots of restrictions, however (you cannot use the education to meet the minimal requirements of your job or to change careers), so read carefully before taking this deduction. Find out more at H & R Block.com

This information is provided for informational and education purposes only and should not be construed as professional tax advice. Although it is accurate and reliable to the best of our ability, there is no guarantee of its accuracy in your situation. Tax laws change often. For information regarding your tax deductions, be sure to contact your tax consultant.

Start saving those receipts now for your 2013 expenses so you have a complete record of items to deduct on next year's taxes. Be sure to consult a professional for current tax laws, and visit the IRS websitse at http://www.irs.gov/ for the latest federal tax forms and publications plus free e-filing instructions.

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