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Deducting out-of-pocket classroom-related expenses of elementary or secondary school teachers (.pdf)
Deducting out-of-pocket classroom-related expenses of elementary or
secondary school teachers
Dear Reader:
School teachers such as yourself often pay for classroom materials
out of their own pockets. If you qualify as an “eligible educator,”
you will be allowed a “classroom expense deduction” of up to $250
for expenses you pay in connection with books, certain supplies,
computer equipment (including related software and services), other
equipment, and supplementary materials you use in the classroom.
(Additional requirements, discussed further below, must also be
satisfied.)
The classroom expense deduction is allowed whether or not you
itemize deductions. Without this special break, you could get a
deduction only if you itemized, by treating the expenses as
unreimbursed employee business expenses. However, unreimbursed
expenses are among the “miscellaneous itemized deductions” that are
deductible only to the extent your total “miscellaneous itemized
deductions” exceed 2% of your adjusted gross income (AGI). (The
2%-of-AGI limit means that a teacher earning, say, $45,000, would
get no deduction unless total miscellaneous itemized deductions
exceed $900.)
An “eligible educator” is an individual who is a kindergarten
through 12th grade teacher, instructor, counselor, principal, or
aide in a school for at least 900 hours during a school year, and a
school is any school which provides elementary education or
secondary education (kindergarten through 12th grade), as determined
under state law.
To be deductible—under both the classroom expense deduction rule and
the unreimbursed employee business expense rule—expenses must be
“ordinary and necessary expenses” that you pay in connection with
doing your job as a teacher. This means that the expenses must be
customary and usual for teachers in your type of school located in
your area, and must be appropriate or helpful (but not necessarily
essential) to doing your job properly. In other words, if you're a
public elementary school teacher, and if it's not out of the
ordinary for public elementary school teachers in your area to buy
books, supplies and materials for their classes, and if the things
you actually buy are useful and helpful in performing your job as a
teacher, the expenses pass this “ordinary and necessary” test.
In addition, the expenses must not be reimbursable. This means that
if you have a right or expectation of reimbursement from your
employer for these expenses, you can't deduct them.
For example, say that you're a 3rd grade teacher in a public
elementary school who qualifies as an eligible educator. You spend
$200 on chalk, crayons, paints, paper and various other supplies for
use by your pupils in the classroom. You can't get reimbursed by
your school, and many public elementary school teachers in your area
pay for these types of supplies for their pupils out of their own
pockets. You're entitled to deduct that $200 under the classroom
expense deduction rule. If you spent $400 instead of $200, you could
deduct $250 of the $400 under the classroom expense deduction rule.
But the remaining $150 could only be deducted as an unreimbursed
employee business expense. And note that if you took your pupils to
a local museum and spent $56 in the museum cafeteria for snacks for
them, you couldn't deduct the $56 under the classroom expense
deduction rule, because you spent that money for an activity outside
the classroom, rather than for classroom books, supplies or
materials.
In order to claim a deduction for classroom expenses—either under
the classroom expense deduction rule or the unreimbursed employee
business expense rule—you must be able to prove that you paid the
expenses, when you paid them, and what the expenses were for.
Receipts for the items purchased showing the date and amount of the
purchase, and identifying the specific items purchased, will usually
do the trick. A note on the receipt (or in some “classroom expense”
log) indicating the classroom activities for which the items will be
used is also helpful. Make these notes (or keep up the log entries)
at or near the time you make the purchase. If your purchase includes
both items you're buying for your classroom and items for your (or
your family's) personal use, you should identify the classroom items
on the receipt. And if the classroom items can be used for both
classroom and personal purposes—for example, children's books when
you yourself have children, or general purpose computer software—you
should be able to prove that you bought those items for classroom
use. Photographs of the items in the classroom would be helpful in
this regard.
In addition to these requirements, the up-to-$250 classroom expense
deduction is subject to one further limitation: the deduction is
allowed for expenses only to the extent the amount of those expenses
exceeds the sum of the following amounts that are excluded from
gross income for the tax year:
-
redemption proceeds from U.S. savings bonds redeemed to pay for
qualified higher education expenses;
-
certain amounts distributed from so-called “qualified tuition
programs” (also called “529 plans”) for the financing of
qualified higher education expenses; and
-
certain amounts distributed from Coverdell education savings
accounts for qualified education expenses.
However, what this rule means in practice is not entirely clear.