Back to school season is in full swing, and if you are a teacher or educator then you may qualify for valuable deductions. Specifically, through the Educator Expense Deduction, the IRS allows qualifying teachers and educators to deduct up $250 worth of un-reimbursed teaching expenses. Some examples of expenses that could be included are books, art supplies, paper, crayons, software, etc.
Who Qualifies?
According to the IRS, in order to qualify for the deduction a taxpayer must be an individual who worked 900 hours or more teaching kindergarten through 12th grade in a school that provides elementary or secondary education. The deduction is also available to other taxpayers working in the education field including counselors, principals, aides, etc.
Married Educators
If you and your significant other both work in the education field, then you can each claim the deduction for a maximum of $500. Just remember, the individual limit is $250. Therefore if your spouse spends $400 on classroom supplies and you only spend $50, then the most you can deduct is $300 (your spouse’s $250 limit + your $50).
Think Outside the Box
In addition to supplies for inside the classroom you can also deduct a handful of other related expenses including gas spent on field trips, subscriptions to academic journals, and even fees paid in union dues.
Above-the-Line
This is an above-the-line deduction, meaning that you can take advantage of it even if you do not itemize your return. They are also generally more advantageous than below-the-line deductions. First, they are subtracted from a taxpayer's gross income, rather than adjusted gross income (AGI). Second, above-the-line deductions are not subject to income-sensitive phaseouts or limitations. Certain below-the-line deductions, by contrast, are phased out for wealthy taxpayers and/or may be taken only if they exceed a certain percentage of AGI.
Don’t Spend too Much Now
This is probably the best piece of advice any one can give a new teacher. It may be exciting to find out you can deduct up to $250 worth of expenses, but remember that it is a yearly maximum. If you overspend at the beginning of school season, you may find yourself having to budget tightly come spring.
Keep All Receipts
It is of the utmost importance to keep all receipts from purchases you want to deduct. Without your receipts, you will have no way to prove to the IRS that you made the purchase if you were ever audited. In addition, you might want to keep a list of each expense with a running total. That way you know how much of your allowed deduction you have spent so far.
Local Tax Incentives
Although you are limited to a $250 deduction by the Federal government, dozens of state and local governments also offer incentives for teachers and educators. Be sure to speak with a local professional, or check with your state’s revenue department to see if any other benefits are available.
The Tax Lady
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