Deducting Educator Expenses
With the 2017 Tax Cuts and Jobs Act came a massive increase in the standard deduction. In 2019 and 2020, Forbes magazine estimates that over 90% of taxpayers will take the standard deduction rather than itemize on Schedule A. That’s good news for most taxpayers because it simplifies most tax returns and lowers their taxable income. There is additional good news for educators because they can still deduct certain expenses regardless of whether they itemize or take the standard deduction. That’s because educator expenses are considered “above the line” deductions. That means they are deductible even if you do not itemize.
The IRS allows educators to deduct up to $250 in un-reimbursed classroom expenses. Married educators can each take a $250 deduction, further reducing their tax liability. Qualified expenses may include professional development course fees, books, computer equipment, and supplies associated with classroom teaching. Most educators will easily exceed these expenses in a given school year. And while the likelihood of an audit is low, it is important to keep your receipts if you plan to take the deduction.
But who qualifies as an educator? The IRS defines educators as those who work 900 hours or more during the school year in a K-12 school as a teacher, counselor, principal, or aide. The deduction applies to private as well as public school educators. Unfortunately, most substitute teachers will not meet the 900 threshold unless they have a long-term position. Also, pre-school teachers do not qualify for this deduction.
What about educators who have more than $250 in expenses? Unfortunately, the deduction for unreimbursed business expenses was eliminated in 2018 with the new tax laws. While teachers can still take the $250 deduction mentioned above, expenses exceeding that threshold are no longer deductible (until 2026 when the law expires).
For most teachers, the $250 deduction hardly offsets their out-of-pocket expenses. Some estimates suggest teachers spend as much as $2000 per year in classroom expenses.[4] Nevertheless, the deduction is a small acknowledgement of the financial sacrifices that teachers make for the benefit of our children’s future.
If you need help with your taxes, go to a qualified professional who can navigate these complicated issues. Your tax advisor should help you take all of the deductions permitted by law, and help you plan for more tax savings the following year.
The author, Bryan Corcoran, Esq, is a retired Marine Judge Advocate. He earned his J.D. and Masters in Taxation from the University of Akron in 1997. He is currently a Tax Analysts for Heritage Income Tax. The views expressed in this paper are his own, and are not intended as a substitute for professional tax planning or legal advice.
Rae, David. “The Standard Deduction is Rising for 2020, Here is What You Need to Know” Forbes, Dec 18, 2019.
26 USC Sec 62(d)(1)
Berger, Rod. “Out of Pocket, Out of Luck: When Funding Fails Teachers” Forbes, May 17, 2018.