Educator Expense Deduction

Because many schools are underfunded and teachers often spend their own funds for their classroom, Congress passed a special tax deduction available to eligible educators. If you are an eligible educator, the educator expense deduction allows you to deduct up to $250 ($500 if married filing joint and both spouses are educators, but not more than $250 each) of any unreimbursed expenses you paid or incurred for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials that you use in the classroom.

Unlike most unreimbursed employee expenses that you can deduct only if you itemize your deductions, and are only deductible if all of your miscellaneous itemized deductions exceed 2% of your adjusted gross income (AGI), the educator expense deduction is available even if you take the standard deduction and deductible from the first dollar, with no AGI floor.

Who is eligible?

You are an eligible educator if, for the tax year, you meet the following requirements:

• You are a kindergarten through grade 12:
  • teacher
  • instructor
  • counselor
  • principal, or
  • aide, and
• You work at least 900 hours during a school year in a school that provides elementary or secondary education, as determined under state law.

What expenses qualify?

You can deduct any ordinary and necessary expenses for books, supplies, equipment (including computer equipment, related software, and services), and other supplementary materials you used in your classroom. For courses in health and physical education, expenses for supplies are qualified expenses only if they are related to athletics.

You may not deduct for home schooling or for nonathletic supplies for courses in health or physical education.

Tax Tip: Be sure to save the receipts for your purchases of books and classroom supplies. The IRS suggests that educators keep records of qualifying expenses in a folder or envelope with a label such as, “Educator Expense Deduction,” recording the date, amount, and purpose of each purchase. This will help prevent a missed deduction at tax time.

 Limitations on amount of deduction

Qualified expenses are deductible only to the extent the amount of such expenses exceeds the following amounts for the tax year:

• The interest on qualified U.S. savings bonds that you excluded from income because you paid qualified higher education expenses,
• Any distribution from a qualified tuition program that you excluded from income, or
• Any tax-free withdrawals from your Coverdell Education Savings Account.

 How to report the deduction

The educator expense deduction is for expenses paid or incurred during the tax year. The deduction is claimed on either line 23 of Form 1040 (PDF) or line 16 of Form 1040A (PDF).

If your expenses for your classroom exceed the $250 cap on the educator expense deduction, you are entitled to treat the excess an employee business expense and may be able to deduct the amounts if you itemize your deductions.

For additional information regarding educator expense deductions see IRS Publication 529, Miscellaneous Deductions, and IRS Publication 17, Your Federal Income Tax for Individuals.

Source: Internal Revenue Service
Last reviewed: February 11, 2015