Summer is coming to a close and the back-to-school advertising blitz is underway. Hidden in some of those school expenses are tax deductions you can take advantage of. Here are some ways you can save:
- Watch for tax deductions on the supply list. Often schools send a list of requested supplies for the school year. Some of the items on the list are clearly for personal use (such as an eraser or a ruler) while other items on the list are often for school use and classroom use (such as 24 pencils or paper towels). Keep track of these non-cash classroom/school donations for possible charitable deductions.
- Donate funds versus taking the raffle ticket. Raffles, subscription drives and silent auctions are fun ways schools raise money. To maximize your ability to deduct your donations, forgo the possible prize. Then the entire donation is clearly deductible. Remember to ask for a receipt when making the donation.
- Don't forget your out-of-pocket expenses for your volunteer activities. Perhaps you donate your time at school functions, donate books to the school library, or help assist the teaching staff. Your out-of-pocket expenses and your mileage should be tracked for charitable deduction purposes.
- Teachers, save your out-of-pocket expenses. A recent survey found that 94 percent of teachers spend their own money on classroom supplies — some as much as $1,000 per school year. Teachers are allowed to deduct $250 on their tax return even if they claim the standard deduction.
- Use checks, not cash. If you usually provide donations to the school in the form of cash (like providing additional money to help other kids go on field trips) make those donations in the form of a check. The check will serve to help prove your donation.
Bonus Savings Tip: When you get the school supply list, compare prices from online retailers to local brick-and-morter stores. You might be able to save some money — especially if you are buying for multiple kids. If you don't have time to wait for them to ship, see if a local retailer will match the price.
Finally, don't forget to review state rules for educational expenses. There are often credits available for out-of-pocket school expenses and other educational expenses.
As always, feel free to pass this Tip along to friends, and reach out if you need help with your personal tax and finance situation.
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