Teachers Face Tax Hikes Without Proper Paperwork

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(UNDATED) - The IRS is warning teachers they risk an extra 20-percent on their tax bills if their schools don’t file the proper paperwork.

Some schools give teachers a choice between getting paid during the school year, or spreading out their checks through the whole year.

Under a 143-billion-dollar package of business tax breaks passed three years ago, if they choose the 12-month option, the IRS now considers that deferred compensation, which could raise teachers' tax bills.

Spokeswoman Jodie Reynolds says schools must file paperwork explaining the payment plan. As long as that's done, there's no penalty.

Reynolds says there's also no penalty for teachers who don't get paid during the summer or don't get a choice.

The rules won't take effect till next school year, giving school districts time to get their documentation in order, and teachers time to double-check it's been done.

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