Friday, July 17, 2009

Tax Tips for Teachers

Summer break is—unfortunately—winding down for students and teachers alike. While teachers all over the country will soon start planning their lessons, this is also the prime time to get your tax files in order. Teachers are in a great position to reduce their tax burden, but it takes time, effort and some thought.

Like anyone else, the best way for teachers to save money on their taxes is to get educated and get organized. If you know what tax breaks you are entitled to, you can actually claim them. And if you have all your tax documentation organized, you’ll be able to prove that you are entitled to each credit, deduction and exemption.

Teachers in particular have a great way to save money on their taxes: the Educator Expenses Deduction. The IRS recognizes that teachers often spend their own money on classroom supplies. Therefore, this deduction is good for up to $250 every year ($500 if your spouse is also a teacher and you file jointly).

While you do not have to itemize deductions to get this deduction, you do have to be organized. Too many teachers keep sloppy records, then can not find their receipts. To help you get organized, here is what I recommend. Create a file labeled “Classroom Expenses”. Keep the file handy so it is easier to properly file receipts than to throw them on the counter. You can go a step further and attach your receipts to a piece of paper with the purpose of the expense written in. You probably will not remember that you spent $5.89 on pencils for your classroom 9 months from now and some receipts are a little difficult to read. This extra step can save you a lot of squinting at receipt tape come tax season.

If you get your system in order now, you will be all set to file your receipts when you go shopping for supplies next month.

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