Don't Mess With Taxes

Photo by Yan Krukau

Some classes have already started. Others, like those in my local suburban Austin school district, begin next week. And most will be underway by the end of August.

So, families are hitting the stores, especially in places with back-to-school tax holidays, picking up the supplies that will help their youngsters succeed this semester. But parents and guardians aren’t alone.

Teachers also regularly spend their own money to make sure that their students have a positive educational experience.

If you’re one of those educators who’s shelling out your own money for classroom supplies, save those receipts. You can use them to claim the educator expenses tax deduction when you file your tax return next year.

$915 out-of-pocket average: A CouponBirds survey conducted this summer found that an overwhelming majority of teachers surveyed — 93 percent overall — dip into their own pockets to help improve their students’ learning.

The majority of these educators — 77 percent —believe their classrooms and the students within them would suffer without the teachers’ personal spending.

And they spend a substantial amount. The survey found that the average expenditure by United States’ teachers is approximately $915 per year per teacher.

Click image to see full infographic data.

 
Teacher expenditures breakdown: Where does that money go? Educators invest in a variety of items to enrich the educational experience of their students.

They include —

• School Supplies = 97%
• Classroom Décor = 76%
• Educational Aids (Books, Games, etc.) = 67%
• Snacks = 44%
• Cleaning Supplies = 36%
• First Aid Supplies = 31%

Spending levels nationwide: Teachers all across the country spend their own hard-earned cash on school supplies. But some spend more than others.

The survey found that teachers in Texas, Pennsylvania, and Arizona spend the most out of pocket on classroom materials.

The query also revealed that more than a quarter of teacher, 26 percent, have taken on a second job, gig work, or summer job to offset their main teaching income and associated expenses.

Limit on educators’ expenses: The Internal Revenue Code can help offset some of those out-of-pocket expenses.

Qualifying educators (more on this in a minute) can deduct up to $300 of certain trade or business expenses that weren't reimbursed. If two married educators are filing a joint return, the limit rises to $600.

Note, however, that the $300 applies to each spouse separately. 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.

But at least that’s something. So, if you spend some of your own money on classroom supplies, be sure to claim them next filing season.

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

Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide. These individuals must work for at least 900 hours during the school year in a facility that provides elementary or secondary education as determined under state law.

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

Deductible expenses: 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 situation, we all know that groups of youngsters tend to be walking, talking petri dishes for all types of transmissible illnesses.

So, the IRS allows health-conscious educators to buy and claim a variety of coronavirus protective items and claim those costs toward the educator expense deduction. The added bonus is much of those products also protect against similar ailments, like the common cold, that routinely spread throughout schools.

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.

And if you’re an educator who works to improve your educational skills, the cost of professional development courses is an allowable educators' deduction expense. Just make sure the courses are related to the curriculum or students you teach.

Itemizing not necessary: So, how do you claim your allowable educator expenses? The good news is that it is one of easiest tax breaks to claim.

Educator expenses are one of two-dozen adjustments to income that are still referred to collectively 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.

You can find more tax form posts at the ol' blog's special Tax Forms 2024 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, too. Regardless of whether you itemize or take the standard deduction, you still can claim any above-the-line deduction, like the educators' out-of-pocket costs, for which you qualify.

And while you don’t have to submit your expense receipts when you claim your out-of-pocket educator expenses, it’s a good idea, as with all tax deduction and credit claims, to keep good records of your qualifying purchases. 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. Yes, it’s not that much tax relief relatively speaking. But educators (and all savvy taxpayers) long ago learned the lesson that every tax break helps.

You also might find these items of interest:

• A quick lesson on two educational tax credits
• 7 financial gifts, some with tax benefits, for graduates
• Teachers deserve more than the current paltry tax deduction for classroom costs

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