November 6, 2018|
School is back in swing and as you can imagine teachers spend a lot of time setting up for the new school year. We all know a few teachers and it has been a common practice for these professionals to spend their own money paying for classroom supplies. While teachers understand that they typically will not be reimbursed for these out of pocket expenditures, they should be aware of a special tax break available to them that covers many of these expenses.
While this special tax deduction has been around since 2002 when Congress created the “Educator Expense Deduction”, it has often been overlooked and underutilized. It gives our educators a little something back without being time-consuming or requiring them to get an expertise in tax law.
The tax break gives each teacher a deduction of up to $250 for qualified expenses. The deduction is seen as an “above-the-line” deduction, meaning you do not have to itemize to get it. This is particularly important considering the recent changes to the tax law. The Tax Cuts and Jobs Act (TCJA) has suspended miscellaneous itemized deductions subject to 2% of adjusted gross income (AGI) until 2025, removing a potential deduction for those teachers whose deductions exceeded 2% of their AGI and did itemize.
Qualified educators include elementary and secondary teachers as well as counselors and principals. Qualified expenditures included classroom supplies, equipment and software as well as books and supplemental materials.
For joint filers where both the taxpayer and spouse are educators, they qualify for up to $500.00 but not more than $250 each.
Contact Faw Casson to discuss additional rules associated with this deduction or any other changes created by the TCJA.