Back To School: Tax Tips For Teachers

tax tips for teachers

Summer is coming to a close, and the school year is quickly approaching.  While teachers are excitedly awaiting the return of their students to the classroom, there are a few things that can cause anxiety.  One of these things is having to spend money out of pocket to ensure their students have the best tools available for successful learning.  Below we go over some tips to get money back into the pockets of our prized educators, starting with the Educator Expense Tax Deduction:

What is the Educator Expense Tax Deduction?

The primary tax break for teachers is the Educator Expense Deduction.  The Educator Expense Deduction allows eligible educators to deduct up to $250 worth of qualified expenses from their income. If two teachers who are married file a joint return, they can take a deduction of up to $250 apiece, for a maximum of $500.

Teachers can claim the Educator Expense deduction whether they take the standard deduction or itemize their tax deductions.

Am I Eligible for the Educator Expense Tax Deduction?

Teachers may be eligible for the Educator Expense Deduction if certain criteria is met.  You must:

  • Work as a teacher, instructor, principal, counselor or classroom aide
  • Work with students in kindergarten through grade 12
  • Complete at least 900 hours of work during the school year
  • Be employed by a school that provides elementary or secondary education as determined by state law

Individuals who work at pre-schools, homeschool their own children, or are employed by a college or graduate school unfortunately do not qualify for this deduction.

What are Considered Eligible Purchases?

The following items are considered to be eligible purchases under the Educator Expense Tax Deduction:

  • Books
  • School supplies
  • Computer equipment & software
  • Athletic equipment for PE teachers
  • Generally, any purchased item that is appropriate for and helpful to the students and classroom

You can deduct classroom expenses only if you have not received reimbursement for them.  If a school, teacher union or someone else paid you back for the money you spent on classroom materials, you can’t deduct it.

Reducing Your Educator Expense Deduction

Under certain circumstances, you may have to reduce your Educator Expense Deduction.  According to the IRS, you must subtract the following from your deduction:

  • Interest on US savings bonds that you were able to receive tax-free because you used the money to pay for higher education expenses.
  • Tax-free withdrawals from Coverdell education savings accounts
  • Distributions from 529 plans that you didn’t report as income

Keeping Track of Expenses

While a general rule of thumb for anyone, keeping records of your expenses as a teacher is particularly important.  Consider recording all eligible purchases in an appointment book/planner, and save your receipts in a separate file

Have An Experienced Raleigh CPA on Your Side

Get peace of mind before hitting the classroom with a diligent, experienced CPA. We take extra precaution to protect our clients’ information, providing an additional layer of security in the fight against identity theft. To minimize your risk of identity theft and maximize your refund, submit our online contact form or call our Raleigh accounting firm today at 919-420-0092.