Monday we began our discussion on above the line deductions with Health Savings Accounts, Tuesday we discussed Moving Expenses, and Wednesday we talked about the Tuition and Fees Deduction. Today we are going to discuss Educator Expenses
Being a teacher is hard work. The long hours and the little pay that you receive can be a little frustrating. I have a hard time dealing with my 14 year old son. I couldn’t imagine having to deal with 30 of him all day, five days a week. Not to mention all of the money that you pay out of your pocket to pay for supplies. You have to truly love your job as an educator; if you don’t it will drive you crazy. Fortunately the IRS offers teachers and other eligible educators a little break on their taxes; I emphases the word “little.” A qualified educator can deduct $250.00 as an above the line deduction. If your spouse is also a qualified educator, they can deduct $250.00 as well. If you are married filing jointly and both of you are educators, you can deduct $500.00 maximum.
The Internal Revenue Service defines a qualified teacher as a teacher, aide, instructor, counselor, or principle, and worked in a school at least 900 hours during the school year. You must be an educator for K-12.
The items that you can deduct are pretty broad. The IRS uses the term “ordinary and necessary” expenses. These expenses include, but are not limited to:
· Supplies
· Materials
· Books
· Software
There are circumstances that could limit your deduction. The IRS states that when an educator uses tax-favored funds to pay for his or her education, those amounts must be subtracted from the total the teacher claims under the education expenses.
The good news is that the American Taxpayer Relief Act of 2012 extended this deduction for 2012.
If your expenses are more than $250.00 (which I am sure they are), you may be able to deduct the rest on Schedule A as an Miscellaneous Itemized Deduction.
For more information visit www.smalleynco.com
If you have any questions you can email Craig W. Smalley E.A.
Author of the books: It Starts With an Idea – Tax Tips for Small Businesses available on Nook and Kindle, The Ultimate Real Estate Investor Tax Guide, available on Nook and Kindle, The Complete Guide to the New Tax Law – American Taxpayer Relief Act of 2012 available on Nook and Kindle, Everything You Wanted to Know about the IRS – Audits, Appeals and Collections available on Nook and Kindle, Tax Avoidance is Legal! The Complete Guide to Individual Income Tax available on Nook and Kindle, The Complete Guide to the Affordable Care Act’s Tax Provisions available on Nook and Kindle, The Complete Guide to Retirement Plans for Small Businesses available on Nook and Kindle, and The Complete Guide to Estate, Gift and Trust Taxation, available on Nook and Kindle
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