Guide to Tax Deductions for Online Teachers

Transitioning to online teaching can present you with various opportunities, especially when it comes to lowering your tax liability. If you’re an online teacher, it’s important to learn about the tax deductions available to you.

As a teacher, you’re eligible for certain tax deductions, whether you work online or in person. A popular deduction among teachers is the educator expense deduction. In 2022, the maximum deduction is $300. With the new online school model, teachers can educate online, making traveling and teaching abroad much more accessible. Expat teachers can claim various deductions, including the foreign earned income exclusion (FEIE), reducing their tax liability to the IRS. If you want to further your own education while teaching online, you may be able to claim the lifetime learning credit. An experienced tax accountant can help you understand your deductions and credits as you teach online.

At US Tax Help, we’re here to make tax season easier for teachers. To learn more about the tax accountants at US Tax Help, call us today at (541) 362-9127.

What Are Common Tax Deductions Available to Online Teachers?

As a teacher, your responsibilities haven’t decreased just because you’re teaching online. In fact, digital teaching can be even more challenging than in-person teaching, especially when dealing with active children. Because your job is already hard enough, you should learn about the potential tax deductions available to you. Although you may be working online now, that doesn’t mean certain teacher tax perks don’t apply to you.

The main tax deduction available to online teachers is the educator expense deduction. If you used your own money to purchase supplies for your students, you might be able to deduct the cost from your annual tax return. Traditionally, this tax deduction referred to supplies purchased for a classroom. Although there has been a significant shift towards online education in the last several years, that doesn’t mean teachers don’t reach into their own pockets regularly to purchase supplies that will better their students’ learning experience.

Books, computer equipment, software, and other schooling supplies are tax deductible. In 2022, the maximum amount you can claim for the educator expense deduction is $300. An experienced tax accountant can help you claim the education expense deduction on your taxes so that you can lower your taxable income accordingly.

Because you now work from home, you might think you’re eligible for the home office deduction. Unfortunately, this deduction remains exclusive to business owners working from home, not teachers working a W-2 job. If you have any questions about this, don’t hesitate to speak with a tax CPA for clarification.

Are There Tax Deductions for Online Teachers Living Abroad?

If you’ve recently begun teaching online rather than in person, what’s stopping you from traveling the world? When a computer is your classroom, you can teach virtually anywhere. If you choose to take up residency in another country as an online teacher, several valuable deductions may be available to you.

Suppose you decide to live abroad and teach at a foreign school online. In that case, you may be eligible for certain deductions. A popular benefit claimed by expat educators teaching abroad is the foreign earned income exclusion (FEIE).

The FEIE allows expat teachers living and teaching abroad, whether online or in-person, to eliminate a certain amount of their foreign income from their American tax returns. This deduction is only available to Americans who take residency in a foreign country, not educators who choose to teach at a foreign school online while remaining in America.

In 2022, the FEIE limit is $112,000. That means you can deduct up to $112,000 of your foreign income from your American taxes. In most cases, expat teachers living and teaching abroad will not have a significant tax liability to the United States after claiming the FEIE. Ask a tax accountant for expatriates to learn more about the FEIE and other deductions like the foreign housing exclusion. Teaching online in a foreign country not only presents you with amazing opportunities to explore and learn, but also to claim advantageous tax deductions.

Are There Tax Benefits of Continuing Your Education While Teaching Online?

If you start teaching online, you may find yourself with a bit more time on your hands. You no longer have to commute to work every day or keep up with your classroom. Instead, you may have some time to focus on yourself and further your own education. If you choose, you may be able to claim a tax credit along the way.

The lifetime learning credit is available to eligible educators who wish to further their learning and improve their abilities as a teacher. Ask a tax CPA if you qualify for the lifetime learning credit. The following are a few of the eligibility requirements for this credit:

• You must be enrolled at an eligible institution
• You must be taking courses to get a degree or improve your job skills
• You must be enrolled for at least one academic period during the tax year
• Your modified gross adjusted income cannot be above $69,000 if you are filing independently
• Your modified gross adjusted income cannot be above $138,000 if you are filing jointly

The lifetime learning credit is worth 20% of the first $10,000 of qualified education expenses or a maximum of $2,000 per return. For online teachers wishing to further their education, the lifetime learning credit can make doing much more affordable. If you have extra time to focus on yourself and become a better teacher, you can take advantage of the opportunity and claim the lifetime learning credit on your annual tax return.

We Can Help Online Teachers with Their Taxes

If you want to learn about the tax deductions and credits available to you as an online teacher, ask our tax CPAs. To learn more about the foreign tax accountants at US Tax Help, call us today at (541) 362-9127.