If you are a teacher, you may receive a Form W-2, Wage and Tax Statement , from the educational institution employing you. This form reports your income from wages, prizes or awards. Payments that you receive for providing services as a tutor, in addition to your regular job, may be considered income from self-employment and are reportable on Schedule C, Profit or Loss from Business . Examples include tutoring high school students and college students after school or providing music lessons to any individual (voice, piano, drums, guitar, etc) on the weekends. If you are self-employed and your net earnings are $400 or more, you must pay self-employment tax on the income you report on Schedule C. In addition, you may need to make estimated payments to cover the amount of self-employment tax or income tax associated with the income you report on Schedule C.
You may be able to reduce your taxes by deducting expenses for tuition incurred in pursuing graduate school or other additional education. If the education is part of your state school board's certification renewal process, it may be deductible. However, if the education is needed to meet the minimum educational requirements to qualify you for a particular position, or if the education will qualify you for a new trade or business, it is not deductible. Changing from an elementary school teacher to a secondary school teacher or changing the subject you teach, from biology to art, for example, is not a change to a new business. Classroom teachers that become guidance counselors or school administrators are also not considered to have changed their trade or business. Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. This is true even if you must get additional education to be certified in another state. Any additional education you need is qualifying work-related education. You may still be able to obtain a benefit from educational expenses that do not qualify for a work-related education deduction if you qualify for the American Opportunity Credit, the Lifetime Learning Credit, or the student loan interest deduction.
You may be able to deduct the out-of-pocket cost for supplies as a miscellaneous itemized deduction if you itemize your deductions.
Other expenses you may be able to deduct as itemized deductions are:
- Subscriptions to professional publications or magazines
- Professional dues
- Union dues
- Fees paid to renew your teaching certificate
- Expenses incurred when lecturing, writing or publishing for which you receive no additional compensation other than your regular salary. Note: These expenses may be for research, incidental travel and publication costs. They must be ordinary and necessary expenses for activities related to, and expected for, your position.
- Clothing required for work that is not appropriate for everyday wear, such as an art teacher's smock or a dance teacher's jazz shoes
- Allowable car expenses incurred when taking mentally handicapped students on an excursion
- Cost of materials used for a class play or a class party
You should keep receipts to substantiate all expenses.