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Tax Tips for Teachers: Deducting Out-of-Pocket Classroom Expenses

Updated for Tax Year 2019


OVERVIEW

When it comes to making sure students have the tools for successful learning, school teachers commonly dip into their own pockets to pay for classroom materials. Fortunately, the Educator Expense Tax Deduction can offer teachers some financial relief.


Teacher and students

The Educator Expense Tax Deduction

The primary tax break for teachers is the Educator Expense Deduction.  To qualify for the Educator Expense Deduction for a given year, you must meet two criteria:

  • You worked as a teacher, instructor, counselor, principal or aide for students in kindergarten through 12th grade.
  • You worked at least 900 hours at a school certified by a state to provide elementary or secondary education. This applies to public, private and religious schools.

The first requirement prevents college or other post-secondary teachers from claiming the deduction, while the second means homeschooling parents can't take it.

Qualifying educator expenses

Items eligible for the Educator Expense Deduction include such things as:

  • books,
  • school supplies,
  • computer equipment and software,
  • athletic equipment for physical education teachers, and
  • generally, any purchased item that is appropriate for and helpful to the students and classroom.

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

Keeping track of expenses

Keeping good records of all your classroom expenses is key to claiming your tax deductible educator expenses.

  • Save your receipts in a separate file.
  • Consider recording all eligible purchases in an appointment book or planner.
  • Try using special colors or codes so that you can find them easily.

Claiming tax deductions

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

  • A teacher can deduct a maximum of $250.
  • Two married teachers filing a joint return can take a deduction of up to $250 apiece, for a maximum of $500.

For federal taxes for tax years through 2017,

  • Your potential deduction isn't necessarily limited to $250 per teacher—so don't stop keeping track at $250. That's because your expenses in excess of $250 can count as "unreimbursed employee expenses."
  • If you itemize, you can deduct unreimbursed job expenses that exceed 2% of your adjusted gross income.
  • These include not just educator expenses, but also outside-the-classroom costs you paid from your own pocket, such as travel, investment costs, and union dues.
  • Some states (California for example) continue to provide this tax deduction after 2017.

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

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