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Educator Expenses – Costs teachers can and can’t deduct on their tax returns

As teachers head back for a new school year, they often pay for various classroom expenses for which they don’t receive reimbursement. Fortunately, teachers may be able to deduct these expenses on their tax returns.

For 2019, qualifying educators can deduct some of their unreimbursed out-of-pocket classroom costs under the educator expense deduction. This is an “above-the-line” deduction, which means you don’t have to itemize your deductions in order to deduct these costs.

What’s Eligible?

Here are some details about the educator expense deduction:

  • For 2019, educators can deduct up to $250 of ordinary and necessary trade or business expenses that they weren’t reimbursed for. The deduction can increase to $500 if each spouse is an eligible educator and they a married filing joint tax return; however, these taxpayers cannot deduct more than $250 each.
  • Qualified expenses are the amounts teachers paid out-of-pocket during the calendar year.
  • Examples of expenses that educators can deduct include books, supplies, computer equipment (including software), other materials used in the classroom, and professional development courses taken by the educator.
  • To be eligible, the teacher must teach Kindergarten through 12th grade, instructors, counselors, principals or aides. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law. CAUTION:  If you begin your teaching career in September, you likely would not be able to claim the deduction in that tax year because you would not reach 900 hours by December 31; you would, however, become eligible in the following tax year.

What is Ineligible?

Teachers or professors may see advertisements for job-related courses in out-of-town or exotic locations. You may have wondered whether traveling to these courses is tax-deductible on teachers’ tax returns. The bad news is that for tax years 2018–2025, it isn’t, because these costs are considered employee business expenses versus specifically educator expenses.

Prior to 2018, employee business expenses could be claimed as a miscellaneous deduction if you itemized on your tax return. However, under the Tax Cuts and Jobs Act, miscellaneous itemized deductions are no longer deductible by individuals for tax years 2018–2025.  The good news is the educator “above-the-line” tax break is not affected by this tax law change.

Planning for year-end

Educators should keep this information in mind when making purchases throughout the year. Plan on filing receipts when paying for eligible expenses and note the date, amount and purpose of each purchase.   Contact your Wegner CPAs tax professional if you have any questions on this unique deduction.

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