As students return to school, some educators may find that the materials that they are given may not be enough to properly engage or teach their students. There are many places to go for supplies that enhance the learning experience for students, but it can be frustrating to have to pay for these teaching supplies out of pocket. Fortunately, some of these expenses can be written off as an educator expense tax deduction. Up to $250 of books, computer equipment, software, supplies and other materials used in the classroom can be deducted every year. To do so, one must be an eligible educator such as a teacher, counselor, aide, or principal.
Educators must be teaching from kindergarten through 12th grade and work at least 900 hours during the school year in order to take this deduction. The tax deduction is an “above the line deduction” meaning that it does not have to be itemized. On IRS Form 1040, the deduction can be claimed on line 23 and on line 16 for IRS Form 1040A. The deduction has to exceed interest on U.S. savings bonds excluded from income due to higher education expenses, tax-free withdrawals from a Coverdell Education Savings Account, or any distribution from a qualified tuition program that was excluded from income. On joint returns where both taxpayers are educators each claiming the deduction, the limit is raised to $500 total. Congress votes yearly to extend this deduction and it was just extended to cover tax year 2013.
If an educator’s expenses were over $250, they can always try to itemize their deductions. The only caveat is that the itemized deductions will only qualify for those amounts which exceed 2% of their adjusted gross income. So, if 2% of the AGI is $1,000, and total itemized deductions come to $1,400, only $400 can be deducted. Also, one cannot take the deduction for the same expense twice, so either it is taken above the line or it is itemized, not both.
No matter what is decided, it is extremely important to begin saving receipts from these expenses. Record-keeping rules apply to educator expenses as they do to the rest of deductions taken. Contacting a tax professional can help to ease stress and ensure that all tax-related questions are answered.