(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here)
My grandpa worked as a high school biology teacher for forty years, and one of his great pearls of wisdom to his three kids was to never go into teaching. Considering that two of them teach, and the third is married to a teacher, the advice may have missed the mark by a bit.
I took the higher road: writing dreary articles about tax and accounting. Not at all like teaching.
With the constant refrain that teachers are underpaid, our intrepid government leaders have added a special Educator Expense Deduction. This special deduction allows eligible educators to deduct up to $250 of out-of-pocket classroom expenses (per taxpayer. $500 if filing jointly and you’re both teachers).
Unlike most deductions, the Educator Expense Deduction is what us tax accountants call “above the line,” which is just fancy talk for items that you can deduct without itemizing deductions on Schedule A. Being “above the line” is a pretty neat feature, since it means you can deduct it pretty much no matter what. Other deductions, such as Charitable Contributions and Home Interest Deductions, can only be deducted once you hit a certain threshold.
To take this deduction, all you need to do is be an educator, defined as a teacher, instructor, counselor, principal, or aide, who works for in a kindergarten through 12th grade school for at least 900 hours during the school year.
Sorry college instructors, you’re out of luck.
Oh, and you have to have actually spent the money. You only get to deduct up to $250 if you spent that amount on some legitimate classroom items. And, unfortunately for home schoolers, home schooling expenses do not count.
If you have more than $250 of expenses, you can still potentially deduct them, just not as an Educator Expense Deduction. They would be listed on the Schedule A as an Unreimbursed Employee Expense, which wouldn’t be deductible unless you spend a significant amount. I’ll be addressing those in a later post.
The Educator Expense Deduction is a nice feature, but it’s hardly a game changer. Here’s an example: the average K-12 teacher salary is about $56,000 nationwide. With a salary of 56k, most teachers are likely in the 15% tax bracket. That means if that teacher spent $250 on supplies, they’d save about $40 on taxes. While I guess netting only $210 on supplies is better than $250, we’re not exactly moving teachers up to the lap of luxury.
Ironically, a teacher married to someone with a better paying job would both be better able to afford classroom supplies and be in a higher tax bracket, giving the Educator Expense Deduction a bigger return on taxes.
On that note, I’ll leave you with another pearl of wisdom from my late-grandfather: You can marry more in a minute than you can make in a lifetime.
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Picture by Nick Amoscato