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The Best Tax Tips for Teachers

May 3, 2016

It’s National Teacher’s Day today! In recognition of teachers and their work, here are some deductions for educators that can help save tax dollars. The biggest tax deduction available to teachers is the educator expense deduction. Eligible teachers can deduct up to $250, and $500 if married filing jointly (if both spouses are educators).

Deductible Expenses

Using the educator expense deduction, teachers can deduct qualified expenses, including those for:

  • Books
  • School supplies
  • Computer equipment, including related software and services
  • Other equipment and supplementary materials used in the classroom

Teachers of health and physical education can deduct qualified expenses related to athletics.

Who is Eligible?

The eligibility for the educator expense deduction is simple. To qualify, you are required to meet both the following criteria:

  1. You are a teacher, instructor, counselor, principal, or aide at kindergarten through grade 12.
  2. You worked at least 900 hours during the school year in a state-certified school that provides elementary or secondary education.

If you were reimbursed for your expenses, then you cannot claim those expenses on your return.

Claiming the Deduction

Teachers can claim this deduction whether they itemize or not. They can claim it on Form 1040 or Form 1040A, but not on Form 1040EZ.

If you itemize, you can exceed the $250 per teacher limit. That’s because you can deduct expenses that were not reimbursed and that exceed 2 percent of your adjusted gross income.

Figuring the Deduction

Educators can determine their total educator expense deduction by first examining:

  • Distributions from a qualified tuition program that you excluded from income.
  • Expenses that remain reimbursed and are not reported on box 1 of Form W2.
  • Tax-free withdrawals from Coverdell education savings accounts.
  • Interest on U.S. savings bonds that that you excluded from income because you used the money to pay for higher education expenses.

The amount that remains after subtracting the above items can be deducted on your return. For more information on the educator expense deduction, review IRS Publication 529 (2015).

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