Teacher Spending Earns a Tax Break

Amidst the flurry of back-to-school shopping and sales, it’s easy to lose track of spending. For teachers and other educators, it is especially important to put those receipts somewhere safe, because they may lower their 2005 taxes.

According to the Internal Revenue Service (IRS), up to $250 of qualified expenses may be deducted when figuring the adjusted gross income (AGI) for 2005 of any individual working at least 900 hours during the school year as a teacher, instructor, counselor, principal or aide in a public or private elementary or secondary school. The deduction is available whether or not the taxpayer itemizes deductions on Schedule A. Spouses filing jointly can also take the deduction, even if one spouse is not an educator. If both spouses are educators, they can both take the deduction allowing them to deduct up to $500.

“Many of our teachers help the kids,” Suzette Ortiz, a chorus teacher at Creative Arts High School in Camden, New Jersey told the Courier-Post. “We’re pouring out money left and right, but I don’t even think twice about it. These kids are like my own kids.” She estimates she has spent $2,000 out of her own pocket on supplies for her classroom and students.

She isn’t the only one. In Salt Lake City, Utah, North Star Elementary kindergarten teacher Becky Moffat and her family schedule summer vacations around back-to-school sales where she spends between $500 and $1,000 on folders, books and other classroom supplies and necessities according to the Salt Lake Tribune. Another Becky, last name Francis, who teaches fourth-grade at Southpointe School in Miami Beach, Folrida shops for bulletin boards, stickers, pencils and posters.

“Some years I’ve spent as much as $1,000,” Francis told the Miami Herald. “But I try to spend as little money as possible.”

Unfortunately, the deduction will expire at the end of 2005.

“Some principals allow money for [supplies] out of the budget, usually through a purchase order,” Robin Behrman, assistant principal at Bob Graham Educational Center in Miami, Florida told the Miami Herald. “But you’ll find that the majority of teachers buy extra things. The average teacher probably spends $500 per year out of pocket for classrooms.”

The deduction only applies to spending that is not reimbursed or otherwise paid for by the school, school district or other educational entity. The IRS suggests educators keep records of qualifying expenses noting the date, amount and purpose of each purpose along with the receipt.

More information about the Educator Expense Deduction is available online from Topic 458 or through the IRS Tele-Tax system toll-free at 1-800-829-4477 and listen to Topic 458.

You may like these other stories...

Koskinen warns filing season could be most complicated yetImplementation of the Foreign Account Tax Compliance Act and the Affordable Care Act, combined with a tight budget and the possibility of Congress passing a late...
Accounting group pushes back against retirement age scrutinyMichael Rapoport of the Wall Street Journal reported that the American Institute of CPAs (AICPA) on Monday pushed back against federal regulators who are again...
There's still time to take advantage of last-minute, tax-saving moves for dependency exemptions. For 2014, there are bigger dependency exemptions, as well as rules that, in some cases, are dauntingly complex.The 2014...

Already a member? log in here.

Upcoming CPE Webinars

Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.