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Teachers, tax time is approaching. Do you have your teacher tax deductions figured out yet? We know teachers are busy (understatement of the year), therefore you might be too busy to think about doing your taxes. That is why the Teach Starter teaching team sat together and created this guide about teacher tax deductions! Find out everything you need to know about work-related expenses that Australian teachers for example can claim on their tax returns!

Before we start digging into teacher tax deductions, you’ll need to ensure your work-related deductions qualify as such.

Always check if your expense fits these 3 criteria:

  • You spent the money yourself, and you weren’t reimbursed for it.
  • The expense directly relates to earning your income (if the expense was for both work and private purposes, you only claim a deduction for the work-related part).
  • You have receipts to prove it. There is one exception here — the Australian Taxation Office (ATO) doesn’t require a receipt for small expenses of $10 or less, up to $200, although you will need a record of the purchase, such as a note in your diary.

You may be surprised by some of the deductions you’re missing when it comes to taxes — or maybe you just aren’t sure what is what? Here are some common deductions that you might qualify for.

1. Working From Home Expenses

Have you spent time teaching from home? There are several methods you can use to work out any home office expenses to see if you qualify. The methods you can use depend on your circumstances, but you must meet the record-keeping requirements and working criteria to use each method. You can only take this deduction if you had to work from home to fulfill your duties, so checking emails on the weekend won’t count, and even taking calls from parents from your couch will not qualify.

Due to COVID-19, the ATO had introduced a temporary shortcut method that simplified how you calculated a deduction for working-from-home expenses, but it was only available from 1 March 2020 to 30 June 2022. If you used it last year, you may want to check with the ATO’s latest guidelines before you file to ensure you’re following the latest rules!

2. Cost of Managing Tax Affairs

You may be able to claim a deduction for expenses you incur in managing your own tax affairs, such as the cost to lodge through a registered agent. You generally incur the fees in the year you pay them, so remember to keep your receipt for the following financial year.

3. Personal Protective Equipment During COVID-19

Due to the COVID-19 pandemic, you may be able to claim a deduction for the cost of buying a face mask and other PPE to wear at work if:

  • your employment duties require you and other employees to be at your place of work
  • the equipment is not provided to you by your employer, and
  • you need to wear a mask (this is likely to be the case where your duties bring you in close contact with other people, including clients, customers or work colleagues)

Make sure you keep receipts for things like sanitizer and masks!

4. Professional Education

Keeping up with the latest in educational trends is an important part of serving your students, and the ATO recognizes this. You may be able to claim the cost of teacher professional development activities such as attending seminars, conferences or training courses to maintain or increase the knowledge, capabilities or skills you need to earn your income in your current employment.

You may also claim your Teacher Registration fee renewal, as well as any First Aid course you might take.

5. Books, Periodicals and Digital Information

You may be able to claim a deduction for books, periodicals and digital information you use as part of earning your employment income if you incur the expense.

  • Books and periodicals may include library subscriptions, academic journals, technical journals and reference books.
  • Digital information services may include online subscriptions, electronic material, such as e-books or e-journals and other digital materials you buy. That includes your subscription to Teach Starter!

6. Costs for Excursions

If you have to pay a portion of an excursion and your school doesn’t reimburse you, that likely qualifies as a work-related expense.

7. Uniforms

Although you can’t claim what the ATO calls conventional clothing — the clothes you could wear anywhere, including school — on your taxes, they do allow a tax deduction if you are required to purchase a uniform to teach in your school and don’t receive reimbursement.

8. Travel Expenses

Have you ever had to travel between schools at the request of your admin? Perhaps you were sent to another building to monitor exams? That’s the sort of travel that typically qualifies as a work-related expense!

It’s important to note, however, that you cannot use regular travel to and from work as a deduction. This is true even if you’re a casual relief teacher who only drives to a school on occasion.

9. Classroom Supplies

We know teachers spend out-of-pocket on everything from storybooks to prizes for student rewards. Many of these can be claimed on your tax, but there are some rules to keep in mind. Just as it is with any of the other listed expenses, these items cannot be things your school has reimbursed you for, and they must be used for your work. If you take home some supplies at the end of term and end up using them for art and craft with your own child, for example, the amount claimed will need to be apportioned between work and personal use.

What Can You Claim on Taxes?

Tax incentives are often divided into two categories: tax deductions and tax credits. As you look into programs that may apply to you, it’s a good idea to understand the distinctions in how tax breaks function.

In a nutshell, a tax credit reduces your taxable income dollar for dollar. A tax deduction, often known as a tax write-off, offers a lesser advantage by allowing you to deduct a specific amount from your taxable income.

Another thing to keep in mind about tax deductions is that they are only useful if you itemize your deductions, which only makes sense for persons who have a lot of deductible costs.

Read Also: How Long do You Have to Keep Bank Records for Tax Purposes?

The deadline for filing federal income tax returns for the 2023 tax year was April 15, 2024. If you received a tax extension or are filing late, here are some of the most popular tax advantages, as well as links to other helpful resources.

1. Child tax credit

The child tax credit, or CTC, is a tax break for families with children below the age of 17. To qualify, you have to meet certain income requirements. The 2023 child tax credit (taxes filed in 2024) could get you up to $2,000 per child, with $1,600 of the credit being potentially refundable.

2. Child and dependent care credit

The child and dependent care credit, or CDCC, is meant to cover a percentage of daycare and similar costs for a child under 13, a spouse or parent unable to care for themselves, or another dependent so you can work. Generally, it’s up to 35% of $3,000 of expenses for one dependent or $6,000 for two or more dependents.

3. American opportunity tax credit

The American Opportunity Tax Credit, sometimes shortened to AOC, lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees — but not living expenses or transportation — plus 25% of the next $2,000, for a total of $2,500.

4. Lifetime learning credit

The lifetime learning credit lets you claim 20% of the first $10,000 you paid toward tuition and fees, for a maximum of $2,000. Like the American opportunity tax credit, the lifetime learning credit doesn’t count living expenses or transportation as eligible expenses. You can claim books or supplies needed for coursework.

5. Student loan interest deduction

The student loan interest deduction lets borrowers write off up to $2,500 from their taxable income if they paid interest on their student loans.

6. Adoption credit

The adoption credit is a nonrefundable tax break that helps taxpayers cover a certain amount of qualified adoption costs per child. The credit begins to incrementally decrease at certain income levels and completely phases out once your modified adjusted gross income (MAGI) exceeds the given threshold for that tax year. For 2023 (taxes filed in 2024), the credit maxes out at $15,950. The credit is phased out at MAGI of $279,230 or more.

7. Earned income tax credit

The earned income tax credit (EITC) is a refundable tax break for low-income taxpayers with and without children. For 2023 (taxes filed in 2024), the credit ranges from $600 to $7,430, depending on how many kids you have, your marital status and how much you made.

8. Charitable donation deduction

If you itemize, you may be able to write off the value of qualifying charitable gifts — whether they’re in cash or property, such as clothes or a car — from your taxable income. Per the IRS, you can generally deduct up to 60% of your adjusted gross income.

9. Medical expenses deduction

In general, you can write off qualified, unreimbursed medical expenses that are more than 7.5% of your adjusted gross income for the tax year.

10. Deduction for state and local taxes

You may deduct up to $10,000 ($5,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes through a tax break known as the SALT deduction.

11. Mortgage interest deduction

The mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay.

12. Gambling loss deduction

Gambling losses and expenses are deductible only to the extent of gambling winnings. So, spending $100 on lottery tickets isn’t deductible — unless you win, and report, at least $100, too. You can’t write off more than the amount you win.

13. IRA contributions deduction

You may be able to deduct contributions to a traditional IRA, though how much you can deduct depends on whether you or your spouse is covered by a retirement plan at work and how much you make.

14. 401(k) contributions deduction

The IRS doesn’t tax what you divert directly from your paycheck into a traditional 401(k). In 2023, you could contribute a maximum of $22,500 ($30,000 if 50 or older). In 2024, that limit is $23,000 ($30,500 for those 50 and above).

These retirement accounts are usually sponsored by employers, although self-employed people can open their own 401(k)s.

15. Saver’s credit

The saver’s credit runs 10% to 50% of up to $2,000 ($4,000 if filing jointly) in contributions to an IRA, 401(k), 403(b) or certain other retirement plans. The percentage depends on your filing status and income.

16. Health savings account contributions deduction

Contributions to HSAs are tax-deductible, and the withdrawals are tax-free, too, as long as you use them for qualified medical expenses.

17. Self-employment expenses deduction

There are many valuable self-employment tax write-offs for freelancers, contractors and other self-employed people.

18. Home office deduction

If you use part of your home regularly and exclusively for business-related activity, the IRS lets you write off certain home office deductions for associated rent, utilities, real estate taxes, repairs, maintenance and other related expenses.

19. Educator expenses deduction

If you’re a schoolteacher or other eligible educator, you can deduct up to $300 spent on classroom supplies. Spouses who are both educators and file jointly get a deduction of $300 each, making them eligible to claim up to $600 on their return.

20. Solar tax credit

The solar tax credit, also known as the “residential clean energy credit,” can get you up to 30% of the installation cost of solar energy systems, including solar water heaters and solar panels.

21. Energy efficient home improvement tax credit

The energy efficient home improvement tax credit, revamped under the Inflation Reduction Act, allows homeowners who purchased qualifying home upgrades, such as energy-efficient windows, doors, and heat pumps, to recoup up to $3,200 on those investments when they file their tax returns.

22. Electric vehicle tax credit

The nonrefundable EV tax credit ranges from $3,750 to $7,500 for tax year 2023. Taxpayers can also get a credit of up to $4,000 for used cars. Eligibility depends on a number of rules, including income, price of the vehicle and whether the car meets IRS manufacturing guidelines for qualified EVs.

Keeping a good record of your income and deductible expenses in a spreadsheet throughout the year can make filing taxes a lot quicker and easier.

“Preparing and organizing everything for your taxes can seem like a daunting task, but a lot of people come across the same common mistakes,” Fan says. “Don’t forget to always include all sources of income, make sure you are looking for and including all possible deductions, and understand the difference between a deduction and a credit.”

Some common mistakes people make include:

  • Not listing all income
  • Not accounting for all possible deductions
  • Not taking advantage of contributions to retirement accounts to increase tax-deductible contributions

If you are filing taxes with several deductions, start by gathering all the appropriate paperwork, such as Form 1098, Mortgage Interest Statement, for mortgage interest deductions. For other deductions, which are based on expenses or contributions, keep accurate records.

“If you itemize your deductions, then keep track of qualified medical expenses, charitable contributions made, or any other deductions which can be itemized,” says Fan. “If you are likely to take the standard deduction, then record keeping will not be as important.”

What are Tax Deductions?

A tax deduction or tax write-off lowers your taxable income and thus reduces your tax liability. You subtract the amount of the tax deduction from your income, making your taxable income lower. The lower your taxable income, the lower your tax bill.

The IRS allows taxpayers to lower their taxable income by choosing either the standard deduction or itemized deductions. Before that, you can also make certain adjustments to your gross income by taking above-the-line deductions in order to arrive at what’s called your adjusted gross income.

Above-the-line deductions

Contributions to a retirement account or health savings account and student loan interest payments are referred to as “above-the-line” deductions, but it may be easier to think of them as “adjustments” to your income.

These deductions are subtracted from your gross income to determine your adjusted gross income, or AGI. If you qualify, you can take them regardless of whether you itemize or take the standard deduction. Your AGI is important because it is the starting point for calculating your tax bill and also the basis on which you might qualify for many deductions and credits.

Below-the-line deductions

Below-the-line deductions, on the other hand, are qualified expenses that are subtracted from your adjusted gross income to help determine your taxable income. The IRS lets you take either the standard deduction or itemize. There are dozens of itemized deductions available to taxpayers, and all of them have different rules. Examples of itemized deductions include deductions for unreimbursed medical expenses, charitable donations, and mortgage interest. Whether you choose to itemize or take the standard deduction depends largely on which route will save you more money.

Generally, there are two ways to claim tax deductions: Take the standard deduction or itemize deductions. You can’t do both.

The standard deduction is a flat-dollar, no-questions-asked reduction in your adjusted gross income. The amount you qualify for depends on your filing status. People 65 or older, or who are blind, get a bigger standard deduction.

Itemized deductions let you cut your taxable income by taking any of the hundreds of available tax deductions you qualify for. The more you can deduct, the less you’ll pay in taxes.

The standard deduction has gone up significantly in recent years, so you might find that it’s the better option for you now even if you’ve itemized in the past. Your tax software or tax preparer can run your return both ways to see which method produces a lower tax bill.

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