Tax Deduction for Educator Expense
The educator expense deduction is the primary tax break for teachers. Here are some criteria to qualify for this deduction in a year:
You were a teacher, counsellor, instructor, or assistance to students from kindergarten to the 12th grade.
Your work hour was not less than 900 hours in a certified school which provided secondary or elemental education.
Your funds went to educator expenses that qualify
College and post-secondary school tutors cannot claim this deduction going by the first requirement, and the second rule prevents homeschooling parents from taking such.
Educator Expense that Qualifies
Here are sample items that qualify for educator expense deduction:
School supplies
Books
Computer accessories like webcam and headphone
Any item you got to help students in the class.
As long as there is no reimbursement for the expense, one can deduct classroom expenses. As a result, you cannot remove funds paid back by teachers' unions, schools, PTA, etc.
How to Claim Tax Deduction
Teachers can claim a deduction for educator expenses no matter their filing route – standard deduction or itemized deduction. As a result:
The maximum any teacher get to deduct is $250
Two couples (teachers) filing a joint return can take the deduction of up to $250 each, capped at $500
Concerning federal taxes for tax years after 2017
The deduction might not be limited to $250 for each teacher. All expenses above $250 might be classified as unreimbursed employee expenses.
People that itemize can deduct "Job expenses and some miscellaneous deductions." This deduction needs to be above 2% of the AGI. Alongside school-related employee expenses that were not reimbursed, it is possible to include union dues, fees for tax preparations and other costs to cross the 2% threshold.
A couple of states like California keep providing such tax deductions after 2017. As a result, you might have some savings on your state taxes even if you don't get your federal taxes.
How to Reduce Your Deduction for Educator Expense
Based on some circumstances, one might need to reduce the deduction for educator expenses. Going by Uncle Sam's ruling, you need to remove the following from your deduction:
All interest that you got from US savings bonds which you got tax free since you use the funds for payment of higher education expenses
529 plans distributions that were not reported as taxable income
All withdrawals from Coverdell education accounts were not taxes.
Job-Related Tutor Expenses for Some States
For teachers who had a virtual class during the COVID-19 pandemic, can they deduct home office expenses? At the federal level, writing off this deduction is not possible. For teachers living in any of the seven states, you are lucky. With these states (New York, Alabama, California, Arkansas, Pennsylvania, Hawaii and Minnesota), there is a deduction on the state income tax returns.
Such deduction is available on state taxes and classified as miscellaneous itemized deductions, provided you rise above the limit for the standard deduction.
Tracking Expenses
An accurate record of your entire classroom expenses will help when it's time to claim your expenses for educator expenses.
Schedule C: Private Tutor and Pandemic teachers
Teachers who offer tutoring as a side job and private teachers who work with students virtually are self-employed. As a result, they can deduct ordinary and necessary expenses on Schedule C.
For teachers that provide entire tutors, contact a tax professional to know if you are classified as self-employed, the tax implications, and possible deductions you qualify for.
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