The Internal Revenue Service is advising
teachers to save receipts for purchases of books and
classroom supplies that they have purchased on their
own. These out-of-pocket expenses may lower their taxes,
thanks to a recent change in the law.
The new law gives teachers who pay
for classroom supplies out of their own pockets a tax
break this year and next. The new deduction is available
to eligible educators in both public and private elementary
and secondary schools. They must work at least 900 hours
during a school year as a teacher, instructor, counselor,
principal or aide.
Taxpayers may subtract up to $250
of qualified expenses when figuring their adjusted gross
income (AGI). They will not need to itemize deductions
to get this benefit. Prior to the change in the law,
educators could take such expenses only as miscellaneous
itemized deductions, which must be reduced by 2 percent
of the AGI.
Educators who excluded education
savings bond interest or payment from qualified tuition
programs, or made tax-free withdrawals from an educational
savings account, will be able to claim the new deduction
only to the extent their qualified expenses exceed the
tax-free amounts.
The IRS suggests that educators
keep records of qualifying expenses in a folder or envelope
with a label such as “Educator Expenses Deduction,”
noting the date, amount and purpose of each purchase.
This will help prevent a missed deduction at tax time.
Details on this and other new tax
law changes are in IRS
Publication 3991, Highlights of the Job Creation
and Worker Assistance Act of 2002,
(153K PDF) available on the IRS
website or by calling 1-800-TAX-FORM (1-800-829-3676).
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