Teachers should save receipts for tax deduction As the new school year begins, the Internal Revenue Service advises teachers and other educators to save their receipts for purchases of books and classroom supplies. These out-of-pocket expenses may lower their taxes, thanks to a law change enacted earlier this year.
"Many teachers dip into their own pockets when funds for classroom supplies run out before the school year does," said IRS Commissioner Charles O. Rossotti. "A new law gives them a tax break this year and next, and we want them to have the records they'll need to claim it on their returns."
The new deduction is available to eligible educators in both public and private elementary and secondary schools. Eligible educators must work at least 900 hours during a school year as a teacher, instructor, counselor, principal, or aide.
Eligible 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 two percent of AGI.
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," available on the IRS Web site at www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).