Read these tips from NEA Member Benefits before you start working on your taxes this year. Make sure you claim your educator deductions so you can get back as much money as possible.
The tax reform of 2017 kept the $250 above-the-line deduction for classroom supplies, and it’s still available for the 2019 tax year (the year for which taxes are due on April 15, 2020). The $250 deduction is particularly advantageous because it is above the line on Schedule A, which means you don’t have to itemize to take it and it reduces your overall adjusted gross income (AGI).
This becomes even more important under the most recent tax reform, which virtually doubled the standard deduction, setting the threshold even higher for choosing to itemize. Legislation in 2015 indexed the amount to inflation—though it is unchanged at $250 for 2019—and allows professional development expenses to be included in the deduction. If both spouses filing jointly are educators, each can claim the deduction, for a total of $500. Read more
Legislation passed late in 2015 made many “tax extenders” semi-permanent, but there are still a few esoteric items that keep everyone on tenterhooks when, as once again this year, Congress fails to pass the tax bill by the end of the year. The new Congress is likely to make them retroactive once they finally do pass the bill in 2019.
In addition, 2018 is the first tax year that most of the new provisions of last year’s tax reform apply, so there are a lot of changes. Read more
Maybe you didn’t withhold enough, forgot to pay estimated taxes for a side gig or you made another kind of honest mistake, and now you have a big, looming tax bill coming your way. This happens to many Americans, and, in certain cases, they will struggle to settle up on what they owe.
The consequences can grow quite costly: If you can’t pay taxes owed by the original filing due date, you’ll be subject to both interest and late-payment penalties, according to the IRS. The IRS advises taxpayers in this situation to file on time even if they can’t pay the entire balance. And it’s best to pay that balance as soon as possible to avoid additional charges. Specifically, the additional charges could amount to penalties of 5% of the tax due for every month, or fraction of month, that the return is overdue, according to Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more