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What is the Educator Expense Tax Deduction?

Updated for Tax Year 2017


OVERVIEW

The Educator Expense Tax Deduction allows teachers and certain academic administrators to deduct a portion of the costs of technology, supplies, and certain training. Here’s what teachers need to know about taking the Educator Expense Deduction on their tax returns.


 

The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change next year for your 2018 taxes, but won’t impact you this year. Learn more about tax reform here.

The Educator Expense Tax Deduction

Teacher helping high school students

Have you spent money this year stocking up on crayons, books and other supplies for your classroom? Have you taken classes to improve your teaching skills that were not paid for by your employer? If you’re an eligible educator, the Internal Revenue Service (IRS) may let you deduct some of these expenses from your taxes this year.

The Educator Expense Deduction allows eligible educators to deduct up to $250 worth of qualified expenses from their income. Qualified expenses include purchases such as:

  • Books and classroom supplies
  • Technology and computer software used in the classroom during the process of teaching students

You also may be eligible to claim the Educator Expense Deduction Credit for professional development courses related to teaching that were not reimbursed by your school or by another source.

Who is Eligible?

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

  • Work as a teacher, instructor, counselor, principal 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

An educator who worked in a first-grade classroom at a public school and met the hours requirement would likely qualify for the deduction. Similarly, a guidance counselor who purchased materials to work with students could also be eligible.

  • However, individuals working at pre-schools, homeschooling their own children, or who are employed by a college or graduate school would not qualify for this deduction.

The IRS has special qualifications for married couples where both people work as educators.

  • If two teachers are married and filing taxes jointly, they are eligible to deduct a total of up to $500, with no more than $250 in expenses for each person.

How Does the Educator Expense Work?

In order to take the Educator Expense Deduction, teachers should begin by determining eligibility. Once you have verified that you meet the minimum hours and that you work in a qualifying school, look at your expenses over the last year that qualify for this deduction. There are a few factors that influence how much you can deduct:

  • You can’t deduct expenses reimbursed by your school, covered by a grant or another source.
  • Expenses can only be deducted when they exceed tax-free withdrawals from your Coverdell Education Savings Account, distributions from state tuition programs that you don’t report as income, and interest on savings bonds that don’t need to be reported if you paid higher education expenses.
  • Qualified expenses in excess of the Educator Expense limits may be deductible as itemized deductions instead.

For more detailed information on the Educator Expense Deduction, look to IRS publication 529. Remember, with TurboTax, we’ll ask you simple questions and fill out all the right forms for you to maximize your tax deductions.

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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