A look at some tax breaks educators can claim beyond Teacher Appreciation Day and Week
Tuesday, May 03, 2022
Today, Tuesday, May 3, 2022, is annual National Teacher Appreciation Day. It's actually part of a full week focusing on saying thanks to the men and women who are dedicated to educating young (and older) people.
And it got President Joe Biden's official acknowledgement, which isn't a surprise since First Lady Dr. Jill Biden is a community college educator.
The teaching profession has always been challenging. I personally saw how much time, effort, and love my grandmother put into being a first-grade teacher. She did that labor of love for almost six decades. I also have an aunt who taught at high school and university levels.
I saw the joy they shared when their students did well. I also saw the grief they felt when things didn't work out as planned or hoped. I also saw the grief they got from parents, both those too involved, as well not interested at all, in their children's education. Things have only intensified these days.
So today and this week, and actually throughout the year, take time to recognize the dedication of educators and support them any way you can. Teaching is a hard job, one that's been especially difficult during the COVID-19 pandemic.
What teachers want: The National Education Association asked educators what would make them feel appreciated for their work. Some of the answers —
- Hugs from students.
- Appropriate living wages.
- More resources.
- Investment in schools.
- Forgiven student loan debt.
You can hear these and more teachers' wishes at this NEA YouTube video, which really is more of an audio tape.
Teaching the teachers: The teacher who said she'd like the federal government to forgive the loan she obtained so she could be certified to teach hit home for me.
I remember my mother and aunts talking about their mom, my Mam-ma, spending weeks away from them for several summers so she could get her master's degree.
Part of the reason for the extended adult learning was because she loved education, both from the giving and receiving sides.
Knowing my mom and aunts, she also probably enjoyed letting my grandfather wrangle the girls on his own for a few weeks, giving her a personal break. Heck, knowing my Mam-ma, I wouldn't put it past her to actually finish up her studies sooner than they knew, and then use the added college classes as a pretext for some personal time.
But her advanced degree also meant she was eligible for a larger salary. Yes, we've always underpaid our teachers and made them work harder to get every extra penny.
Teachers' debt, too: I don't know how my grandparents paid for Mam-ma's master's. I'm sure it was a financial stretch for that West Texas family that lived on an oil filed worker's and elementary school teacher's salaries.
Nowadays, the cost of higher education means that students usually go into debt, and that burden is getting a lot of attention in Washington, D.C., and across the country. The Biden Administration has taken several steps during the coronavirus pandemic to let student debtors delay paying both principal and interest payments. The latest payment moratorium is scheduled to end on Aug. 31.
In addition, White House staff now are exploring the possibility of at least some targeted student loan forgiveness. This, of course, is sparking furious debate on Capitol Hill and beyond.
You can read more about Biden's loan relief activity so far, and what's possibly on the horizon in this analysis by the American Action Forum. A recent National Public Radio (NPR) On Point program panel also examined the federal government's role in causing and fixing the $1.7 trillion student debt crisis.
While all this loan forgiveness is being hashed out, here's a quick lesson on current, albeit admittedly small, tax help for teachers. The relief includes a tax credit, and a couple of tax deductions.
Lifetime Learning Credit (LLC): When teachers become students again, they might be able to qualify for the Lifetime Learning Credit. There are two key words in this tax break's name.
First, the first word to note is the first one in its name — lifetime. This means it's not just for young students who've yet to complete their educations. It's also available to individuals who want or need added classes to help them advance their existing careers.
Then there's the last word in the tax break's name — credit. This makes it a dollar-for-dollar offset of any tax you owe. For LLC claims, that's calculated as 20 percent of the first $10,000 of qualified education expenses. If you're not a math teacher, that's a maximum of $2,000 per return.
Note that while the LLC as a credit can help reduce or zero out your tax liability, it's not refundable, so you won't get any excess back as refund. Still, lowering or erasing a tax bill earns an A in my personal tax class.
And there's no limit on the number of years you can claim the credit. So if you want to stretch out your professional degree courses like my Mam-ma maybe did, go for it.
The Taxpayer Certainty and Disaster Tax Relief Act of 2020 increased the LLC's income limitations, expanding eligibility to more individuals. If this could help you or a teacher in your life, check out the Internal Revenue Service's Lifetime Learning Credit web page. It has an interactive tool to help you determine if you qualify.
Student loan interest deduction: If you do have student loan, regardless of whether you're a teacher or in some other field, you might be able to claim some of the interest you pay each year as a tax deduction. It's part of the group of write-offs still referred to (at least by me) as above-the-line deductions that are available without itemizing. If you meet the income guidelines, you can claim up to $2,500 of that interest on your tax return.
Educators' expenses deduction: Like the student interest tax break, the tax breaks for educators' out-of-pocket classroom expenses also is an above-the-line deduction that doesn't require filing a Schedule A.
It's been available since 2002, when it was created as a temporary $250 tax break that had to be periodically renewed. In 2015, Congress decided to make it a permanent part of the tax code.
That 2015 law also allowed for potential annual inflation increases in the $250 deduction amount, which officially for tax-computing purposes an adjustment that can lower your income. For the most part since then, inflation has been low and the deduction stayed at $250. But this year, that's changed. For the 2022 tax year, eligible educators can claim up to $300 of their personal payments for material to help them educate students.
Yes, even with the $50 boost, that doesn't come close to covering most teachers' out-of-pocket classroom costs. Still, in tough financial times, any tax break is welcome.
Thank you, teachers. A special day and week are not nearly enough to show how much we appreciate what you do for our kiddos.
Similarly, the federal tax benefits are pretty paltry. But until they're improved and more are added, be sure to claim as many of them and as much as you can. You deserve at least that … and all the deals and freebies available to teachers this week.
You also might find these items of interest:
- No tax on latest group of forgiven student loans
- COVID PPE counts toward teachers' expenses tax deduction
- Students with debt, corporate taxpayers, and tax preparers could be affected by Biden's budget proposal
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