New Tax Law Provides $250 Deduction for Educators

by Kathleen Alape Carpenter - Editor

Qualifying educators can deduct up to $250 in out-of-pocket expenditures

A new tax deduction is available to teachers, instructors, counselors, principals and aides who work at least 900 hours during a school year in public and private elementary and secondary schools.

Qualifying educators may subtract up to $250 of qualified expenses when figuring their adjusted gross income (AGI). In the past, educators could take such expenses only as miscellaneous itemized deductions, which must be reduced by two percent of the AGI. The new law allows the deduction from the AGI, making it unnecessary to itemize deductions in order to benefit from the new law.

According to the Internal Revenue Service, teachers should save their receipts for purchases of books and classroom supplies.

"Many teachers dip into their own pockets when funds for classroom supplies run out before the school year does," said IRS Commissioner Charles O. Rossotti. "A new law gives them a tax break this year and next, and we want them to have the records they'll need to claim it on their returns."

The IRS suggests that educators keep records of qualifying expenses in a folder or envelope with a label such as "Educator Expenses Deduction," noting the date, amount and purpose of each purchase. This will help prevent a missed deduction at tax time.

An IRS release notes, "Educators who excluded education savings bond interest or payments from qualified tuition programs, or made tax-free withdrawals from an education savings account, will be able to claim the new deduction only to the extent their qualified expenses exceed the tax-free amounts."

Additional information about the new tax law can be found in IRS Publication 3991, Highlights of the Job Creation and Worker Assistance Act of 2002, available on the IRS Web site at http://www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

Recent Discussion Concerning this Tax Law

Note:
If you would like to answer a question posted here, ask a question, or add a comment, you can do so in Letters to the Editor at postletter.html

Post: Will you claim the new $250 tax deduction?
Posted by Kathleen

Just wondering...will you be taking advantage of the new tax law allowing you to claim (without having to itemize) $250 of out-of-pocket expenditures for the classroom?

Do you spend more or less than $250 each year?

Do you have any opinions about the new law?

Posted by Kare/Can
Why wouldn't anyone claim that, I wonder. We can't claim anything here in Canada, though I keep looking to find a way. If any Canadian has ideas, let me know. I spend so much each year. Even my computer at home is purchased because I need it for school stuff and the expensive ink cartridges and so on. If we run a business out of our home we can write off the space we use for our office and a percentage of electricity and heat, etc. but not if it is needed to do our teaching job. $250 isn't much compared to what most of us spend, but at least it is a start.

Posted by Rita/KY
I hadn't heard about this new law, but it sounds good to me.
I usually spend at least $250, probably more, a year on my classroom.

Posted by neansai
I spend at least ten times that much, not including the $750-$1,000 per course for the 4 graduate classes that I took this year. I itemize, so I can deduct part of my expenses anyway. I will double-check about this one with my accountant, for sure.

Do you have to keep a receipt?
Posted by banjophil
When I need a new $2 marker, a $3 widget, or a smelly candle, I just go to Wal-Mart and get one, but I never save my receipts. Will the IRS just take my word for it, or am I just out of luck this year?

Can you claim it if you just take the standard deduction?
Posted by jme

Posted by Bob/VA
Links to IRS pages that explain the change

http://www.irs.gov/pub/irs-news/at-02-73.pdf
http://www.irs.gov/pub/irs-pdf/p3991.pdf

Every little bit helps

Re: Married teachers filing jointly
Posted by Froggie
My husband and I are both teachers and we file a joint return.
Does anyone know if we can EACH take the $250 deduction or is it just $250 for the both of us?