Teacher Spending Earns a Tax Break | AccountingWEB

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.

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