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Teachers' out-of-pocket classroom costs worth $300 tax break

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Teachers and other eligible educators, stop before filing your tax returns and make sure you claim the tax break for your out-of-pocket classroom expenses. (Photo Unsplash+ in collaboration with Getty Images)

Our neighborhood schools this week welcomed students back from summer break.

Teachers and other school staff already had been in the classrooms, getting ready for the youngsters' return. Those educators also likely spent some of their own money on the 2023-24 school year preparations.

There's a bit of good tax news for those school employees. They can claim a tax break for their out-of-pocket educational expenses.

$300 is still the limit: Unfortunately, the tax break officially known as the educator expenses income adjustment is not that much.

This write-off has been available since 2002. When it was created, it was a temporary $250 tax break that had to be periodically renewed, or extended.

In 2015, teachers and other eligible school staff no longer had to worry whether they might lose this tax break. That year, the Protecting Americans from Tax Hikes, or PATH, Act, made the teachers' expenses (and more) deduction a permanent part of the tax code.

The PATH Act also allowed for potential annual inflation increases in the deduction amount. However, low inflation back then kept the tax break stuck at its $250 per qualifying educator level until 2022. That's when it was bumped up by $50.

For 2023 taxes, the educator expenses deduction cap remains at $300. Eligible educators can claim up to that amount of qualifying expenses when they file their 2023 federal tax returns next year.

Where two teachers are married, they can claim a possible $600 on their joint tax return.

Note, however, for the wedded educators, the $300 per person limit still applies. So if one teacher spent $400 and the equally educational spouse spent $200, the couple can only claim $500. That's $300 for the bigger spender, $200 for the more frugal husband or wife.

Still not enough: Even with the $50 increase, the $300 isn't going to cover all the money that teachers willingly spend to enhance their students' learning experiences.

My eLearning World, a publication focused on educators, reports that nationwide, teachers spent 2.7 times more on classroom expenses than what they can deduct.

The online publication reports that during the 2022-2023 school year, the typical teacher spent an average of $820.14 out of pocket on school supplies.

That's the largest per-teacher amount ever, according to My eLearning World's data. Overall, it reports that teachers across the United States last year spent an estimated $3 billion on essential items to help their students.

Tax definition of educator: This tax break is popularly referred to as the teachers' expenses deduction. The Internal Revenue Service, however, uses a broader definition of educator.

Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during the school year.

Both public and private school educators qualify. However, home-school teachers are not eligible to claim the educators' deduction.

Itemizing not necessary: One of the more-welcome features of the educator expenses tax break is the ease of claiming it.

As mentioned earlier, it is one of two-dozen adjustments to income still usually referred to by tax practitioners as above-the-line deductions. These are listed on the second page of Form 1040's Schedule 1, as shown on the highlighted excerpt below.

IRS Form 1040 Schedule 1 2022 tax year excerpt
You can find more tax form posts at the ol' blog's special Tax Forms 2023 page.

There are no percentages of adjusted gross income to calculate. Just claim your classroom-related costs up $300 and attach Schedule 1 to your Form 1040 when you file.

But what if you do still itemize other deductible expenses? That's OK. Regardless of whether you itemize or take the standard deduction, you still can claim any above-the-line deductions, like the educators' out-of-pocket costs, for which you qualify.

And if you're a teacher or other qualifying educator who got an extension to file your 2022 return, don't forget to claim that year's eligible out-of-pocket classroom costs on that return due by Oct. 16. As noted earlier in this post, the $300 limit first took effect last year.

Expensed that count toward the deduction: So just what counts toward your Schedule 1 educator expense claim?

The usual school items — books, supplies, and other materials used in the classroom — are among the qualifying costs. So are unreimbursed costs of instructional equipment, including computer hardware, software, and services.

And even though we're no longer in a COVID-19 emergency, cases of the illness ticked up this summer. That's a bit disconcerting as schools reopen, since it's no secret that groups of youngsters are living petri dishes for all types of transmissible illnesses.

Health-conscious educators still can buy and claim toward the educator expense deduction a variety of coronavirus protective items designed to stop the spread of the disease. They'll also protect against similar ailments, like the common cold, taking hold in the classroom.

This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint, or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers, and other items recommended by the Centers for Disease Control and Prevention.

Again, the IRS reminds teachers and their eligible colleagues that home schooling costs don't count. Neither do nonathletic supplies for courses in health or physical education.

Teachers' own education costs count, too: Another welcome addition to the allowable educators' expense list is the cost of professional development courses. As long as they are related to the curriculum they teach or the students they teach, those costs count toward the $300 tax break.

But, notes the IRS, don't overlook another tax break here that might be more beneficial.

Educators' personal continuing education expenses can be claimed as part of the Lifetime Learning Credit. Here you can claim up to 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, a substantial increased from the $300 out-of-pocket deduction.

Even better, the Lifetime Learning Credit is, as its name says, a tax credit. This makes it a dollar-for-dollar offset of any tax you owe. More on this credit is in IRS Publication 970, Tax Benefits for Education.

And while claiming the educators' expense is not as intensive as itemizing, you still need to keep good records of your qualifying expenses. This means receipts, cancelled checks, and other documentation of your eligible purchases.

That will help ensure that you get the full benefit of the $300 educator expenses claim. And while it's not that much relatively speaking, taxpayers long ago learned the lesson that every tax break helps.

You also might find these items of interest:

 

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