Yeast can remain active for months when stored in the refrigerator or freezer, but testing it before you bake helps you avoid a flat loaf. The testing process is called proofing, and you can use proofed dry yeast in your recipe so no ingredients are wasted.
Yeast needs warm liquid and a sugar to feed on to activate. Use ½ cup of the liquid from your recipe to test the yeast, or just use ½ cup of water for a smaller test batch. Using a thermometer, make sure the liquid is between 110 to 115 degrees Fahrenheit; any warmer may kill the yeast, while cooler water may not activate it. Stir in 1 teaspoon of sugar and 2¼ teaspoons of yeast for every ½ cup of water, or use the amount of sugar and yeast specified in the recipe. If the mixture becomes foamy after 10 minutes, your yeast is good. Mix in the rest of the ingredients and continue baking.
References and ResourcesUniversity of Kentucky College of Agriculture: The Art of Baking Bread
Pillsbury: Secrets for Baking With Yeast