TEACHER TAX BREAKS
Oklahoma educators can qualify for $250 tax deduction for school supplies
Jen Linstrom, CPA, is a tax senior at Arledge and Associates, PC, an Edmond-based accounting firm. It's back-to-school time. Are there any tax benefits for teachers?
Not just teachers, but all eligible educators qualify for an above- the- line deduction of up to $250 per taxpayer. “Abovethe-line” means that you can take this deduction even if you don't itemize on your tax return. If both taxpayers on a married filing joint return are eligible educators, each can take a deduction of up to $250 for a maximum total of $500 per return.
Besides teachers, who else qualifies as an eligible educator?
Eligible educators also include instructors, counselors, principals and aides of kindergarten through 12th grade students. To qualify, educators are required to work a minimum of 900 hours during the school year in a public or private primary or secondary school. Currently, there is no deduction available for homeschool or preschool educators.
What expenses qualify for the deduction?
All unreimbursed expenses that are considered “ordinary and necessary” to fulfill your role as an educator are eligible for the deduction. The terms "ordinary and necessary" are subject to interpretation, so the rule of thumb is to ask yourself, would a reasonable person expect an educator to spend money on this? Examples of these types of expenses are books, equipment, supplies, computer software and classroom furniture. For health and physical education classes, expenses for supplies only include athletic equipment. Unreimbursed professional development expenses also qualify for this deduction if the expense is paid for courses directly related to the curriculum in which you teach. Don't forget to keep your receipts and it is recommended to take note of what was purchased, when and how the expense is related to instruction.
Are there any other tax savings for educators?
Although not limited to educators, the Lifetime Learning Credit may be beneficial to those who itemize their deductions and have eligible education expenses. The Lifetime Learning Credit is available for education expenses paid on behalf of those attending classes to earn further credentials, a degree or to simply improve job skills. These classes must be taken at a qualified educational institution which includes colleges, universities and trade schools.