Educator Expenses Deduction

What is the 'Educator Expenses Deduction'

The educator expenses deduction is an adjusted gross income deduction for teachers and other education professionals for up to $250 in out-of-pocket expenses. It used to be that schools supplied students with everything they needed to gain a kindergarten through grade 12 education, including costs to compete in athletics or participate in after-school groups.

That’s no longer the case. Cuts in educational funding now make it necessary for students and teachers to pitch in on everything from tissues for the classroom to gas money for sports’ teams travel.

BREAKING DOWN 'Educator Expenses Deduction'

Any teacher, instructor, counselor, principal or aide who worked at least 900 hours during the school year can qualify for the educator expenses deduction, for up to $250 in out-of-pocket expenses purchased on an annual basis. For health courses and physical education, expenses for supplies are deductible only if they are related to athletics. Money spent on professional development also qualifies as a deductible expense. Deductions related to home schooling are not allowed.

Originally part of the American Taxpayer Relief Act, the deduction is indexed inflation, so it doesn’t lose its value over time. Even better is that this deduction comes “right off the top” of your gross income; and is not part of itemization. Considering recent changes to the tax structure that nearly doubled the standard deduction for many people, thus eliminating the need to itemize, this is an important issue.

Those whose expenses exceed $250 may be able to treat the amount over as unreimbursed employee expenses. However, because the money spent must exceed 2 percent of a person’s adjusted gross income (AGI), it may not be deductible at all or make sense to take it.

However, you can’t claim the same expense as an educator deduction as the IRS does not allow the deduction of the same expense twice.