I’m a big fan of teachers, not just because my grandmother and one of my aunts were teachers, but because I had great instructors from elementary through college.
So celebrating National Teacher Day is the least I can do. That and remind teachers and others who help educate us that there’s a tax break specifically for them.
Tax reward for teachers: Most teachers go beyond lesson plans and working weekends to get ready to make the learning experience one that resonates. In fact, a lot of teachers spend their own money to help make their classroom presentations effective.
In recognition of this extra cash outlay, the Internal Revenue Code now has a permanent provision that allows elementary and secondary school teachers, as well as certain other educators, to claim an above-the-line deduction for their out-of-pocket expenses.
This tax break previously was part of the tax extenders, a group of temporary tax laws that had to be renewed periodically or they would expire. The tax break for teachers was added to the extenders list in 2002 and was renewed six times as an extender.
But in December 2015, the educators’ expenses income adjustment became a permanent part of the tax code thanks to the Protecting Americans From Tax Hikes (PATH) Act.
In addition, the law change also expanded the deduction to cover professional development expenditures and indexed the $250 maximum amount for inflation.
These enhancements mean that qualifying educators can now count on the deduction each year and potentially get more from it than before.
Here are the educators’ expenses tax break’s highlights.
$250 and maybe more
As noted earlier, teachers and other educators can deduct up to $250 they spend during the tax year on classroom supplies. If inflation warrants, the $250 amount will increase each tax year. For 2017, though, low inflation kept it at the $250 level.
What if both you and your spouse are teachers? Good news. Couples who share education careers and file jointly could get a double tax break. Each education-employed spouse is allowed a claim of up to $250 of qualified expenses. But that limit applies separately.
That means your jointly filed 1040 could include a $500 deduction if you each spent $250 on your separate classrooms’ supplies. But if one of you spent less and the other more, you can’t combine your costs.
So if you spent $350 on school supplies and your husband or wife spent $150 on his or her classroom, you can deduct only $400 on your return — $250 for you and $150 for him or her — not your combined $500 in out-of-pocket education expenses.
No itemizing necessary
Don’t itemize? No problem. There’s no need to mess with Schedule A, since you don’t have to itemize to claim this tax break. You enter your allowable education expense total directly on Form 1040 or Form 1040A.
This tax filing entry, officially known as an adjustment to income, helps reduce your tax bill by knocking dollars off your overall income. Less income to tax generally means a lower tax bill.
However, the Internal Revenue Service still recommends that educators who take this tax break hang onto to all receipts and other documentation to substantiate their qualified expenses just in case the tax agency later has some questions about the claim.
Teachers’ education costs count
With the expansion of the tax break, educators now can count their expenses for their own professional development when claiming this deduction. Classes that count, according to the law, are those courses that relate to “the curriculum in which the educator provides instruction or to the students for which the educator provides instruction.”
Note that these are extra courses to enhance teacher skills. Costs educators incur to meet the minimum requirements of their current jobs or to qualify for a new profession may not be deductible.
I know I keep typing “teacher,” but the tax break is available to more than just the women and men who lead classroom work. The IRS says you can take the deduction if, for the tax year, you were employed at a state-approved public or private school system and held one of a number of positions.
Your position can be with any class from kindergarten through grade 12 as long as you work at least 900 hours during the school year. This applies to teachers, as well as an “instructor, counselor, principal, or aide” in a public or private elementary or secondary school who meets the hourly requirement.
If you home school your kid, though, you’re out of tax deduction luck. As noted in the first paragraph of this section, the tax law specifically states that home instruction costs don’t count toward the educator expenses deduction.
Eligible classroom expenses
In addition to including professional development programs as part of educator expenses, this tax break covers a variety of other classroom costs.
The official guidelines are pretty broad. You can count unreimbursed costs for books, supplies, computer equipment (including software and services) and other equipment and supplementary materials used in the classroom.
The IRS also applies its ordinary and necessary rule here. To be considered ordinary, an item purchased for your classroom must be something that is common and accepted in the education profession. A necessary expense is one that is helpful and appropriate, but it doesn’t have to be required to be considered necessary.
So buying a DVD of Emma Stone’s “Easy A” movie to give your English literature students a modern take on and keep them engaged in your classroom discussions of Nathaniel Hawthorne’s masterwork historical novel “The Scarlet Letter” likely would meet tax deduction muster.
But buying a new DVD player and 50-inch HD television to watch the movie instead of using older but still working school supplied equipment probably will prompt some IRS questions.
Every tax saving amount helps: Now I realize that $250 in annual classroom expenses is not that much. A lot of teachers spend lots more.
But every little bit helps. So keep track of your out-of-pocket costs and claim them on your 2017 return. This tax year could be the last one for which you can claim the educators expenses if it is one of the vague deductions that the Trump Administration vows to end in its promised/threatened rewrite of the tax code.
And oh yeah. Here’s one more thing I can do for teachers today. As a reward for reading to the end of this assignment post, here are some better-than-an-apple freebies for America’s educators.