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Increasing financial support can help K-12 schools implement proven reforms such as hiring and retaining excellent teachers, reducing class sizes, and expanding the availability of high-quality early education. So it’s problematic that some states have headed sharply in the opposite direction over the last decade.
Through 2017, any educator expenses, including union dues, in excess of the $250 threshold could have qualified as “unreimbursed employee expenses.” New tax reforms have changed that. Now, for tax years 2018 through 2025, educators can no longer deduct union dues. If you are an educator, request a tax preparation quote today to get started with a tax professional experienced in teacher tax deductions. Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. This is true even if you must get additional education to be certified in another state. Any additional education you need is qualifying work-related education.
The Senate proposed doubling the deduction limit to $500, while the House of Representatives wanted to eliminate the deduction altogether. In the final bill, however, the two agreed to keep the deduction as it was.
Those Involved In Educating Deserve All Eligible Teacher Tax Deductions!
You must work at least 900 hours per school year to be considered eligible, so substitute teachers, summer-school or part-time instructors may not qualify. The deduction is not extended to parents who homeschool their children. For married couples filing jointly, if both spouses are eligible educators, each may deduct up to $250 in qualifying expenses, for a total of up to $500. The TCJA has made significant changes to tax deductions that may be available to you as an educator.
- If you itemize, you can deduct “Job expenses and certain miscellaneous deductions.” This category of deductions must exceed 2% of your adjusted gross income.
- Some states continue to provide this tax deduction after 2017 so, even though you might not get a break on your federal taxes, you might save some money on your state taxes.
- Unreimbursed business expenses — such as a computer for your classroom, classroom furniture or activities for students — are also deductible.
- Learn more about other tax deductions you might qualify to claim on your tax return.
- Hawaii and Indiana were excluded from the total state funding analysis because the necessary data to make a valid comparison are not available.
You will be asked about these expenses during the eFile.com tax interview before we will help you report them on the proper form—you don’t have to worry about exactly where to enter these deductions. Evidence suggests that smaller class sizes can boost achievement, especially in the early grades and for low-income students. Yet small class sizes are difficult to sustain when schools cut spending and enrollment rises. Local school districts typically struggle to make up for major state funding cuts on their own, so the cuts have led to job losses, which deepened the recession and slowed the economy’s recovery. They also have impeded important state education reform initiatives at a time when producing workers with high-level technical and analytical skills is increasingly important to the country’s prosperity.
Fortunately, a special tax break allows the educators of our nation to deduct some of those expenses. And under the Tax Cuts and Jobs Act , understanding this deduction is especially important. If you’re a preschool teacher, you can deduct supplies that exceed 2 percent of your adjusted gross income. Travel for field trips, educational activities and to meet with students or their parents is deductible at the standard mileage deduction rate — 56.5 cents per mile as of 2013. If you have to pay to maintain your license or you attend continuing education classes, you can also deduct the costs of these classes as well as any supplies you need for them. Unreimbursed business expenses — such as a computer for your classroom, classroom furniture or activities for students — are also deductible. For those filing 2017 taxes, if you have over $250 of classroom expenses, or you do not qualify for the educator deduction for any reason, you may still qualify for a tax break.
While Wisconsin appeared among the 12 deepest-cutting states in our 2016 paper, that state has been providing school districts with an increasingly large amount of general funding outside of the state formula. Including this non-formula general aid, Wisconsin’s cuts since are not in the top 12.
In the other 29 states for which we have data, local funding rose, but those increases usually did not make up for cuts in state support. Public investment in K-12 schools — crucial for communities to thrive and the U.S. economy to offer broad opportunity — has declined dramatically in a number of states over the last decade. Worse, some of the deepest-cutting states have also cut income tax rates, weakening their main revenue source for supporting schools. Learn how teachers can save by reading Pasquesi Sheppard’s teacher tax deduction list.
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Many provisions of the tax code have income caps and phase-outs and other wrinkles that may affect your actual tax liability. Be sure to work with a tax advisor orreliable tax softwarethat clearly addresses your situation, especially if you are in the higher income brackets. And keeping receipts or a careful log is critical for the classroom supplies deduction and other tax benefits.
It’s crucial to stay up to date on these changes, but it can be tough to do it all yourself. If you have any questions or need help finalizing your teacher tax deduction list for the coming tax year, contact our Chicago-area office today.
The second ensures that homeschooling parents are unable to qualify for the Educator Expense Deduction. The reason these two criteria exist is to make certain primary and secondary education professionals can take advantage of this tax break.
Can Teachers Deduct Union Dues?
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Budget cuts make it more difficult to extend instructional opportunities because extending learning time generally adds costs. States and localities use capital spending to build new schools, renovate and expand facilities, and equip schools with more modern technologies. In most states, capital spending fell sharply after the recession hit, as did the non-capital school funding discussed in this paper. Beyond raising local revenues, school districts have few options for preserving investments in education. Some localities could divert funds from other services to shore up school budgets, but this could impair other critical services, like police and fire protection.
Recruiting, developing, and retaining high-quality teachers are therefore essential to improving student achievement. Teacher salaries make up a large share of public education spending, so funding cuts inevitably restrict districts’ ability to expand teaching staffs and supplement wages.
Teachers and eligible educators who spend their own money on classroom supplies are eligible for a tax break called the educator expense deduction. While this is not a tax deduction credit, it is an above-the-line deduction of up to $250 for classroom expenses paid during the tax year.
Specifically, you need to be a K–12 teacher, instructor, counselor, principal or aide for at least 900 hours during the school year. Despite the fact that educators have had to work at home during the pandemic, there has been no change in eligibility for the home office deduction. The 2017 tax reform eliminated educator expenses beyond the $250 above-the-line deduction, which had been used to cover some home-office expenses. As yet, there has been no legislation providing tax relief for home use during COVID.
What Is The Educator Expense Tax Deduction?
That said, teachers used to be able to include unreimbursed work-related expenses that exceeded $250 as an itemized deduction, as long as those expenses exceeded 2% of their adjusted gross income. The new tax law suspended that option between Jan. 1, 2018, and Dec. 31, 2025. This deduction is called an “above-the-line” deduction, meaning it reduces your AGI instead of your taxable income.
These cuts include the automatic, across-the-board cuts known as sequestration, as well as other cuts also resulting from the 2011 Budget Control Act. Indiana was excluded because changes in its education formulas between fiscal years 2008 and 2017 prevent meaningful comparisons across years. Hawaii does not distinguish between state and local funding, as it contains just one school district. Indiana shifted a large share of school funding in 2009 from local governments to the state; that shift is the primary reason why it’s not possible to accurately compare state funding in 2008 to funding in recent years. In Wisconsin in 2013, the Census Bureau began treating revenue from Wisconsin’s School Levy Tax Credit property tax relief program as revenue from state sources rather than as local property taxes. To create an apples-to-apples comparison across years, we included the School Levy Tax Credit as a state revenue source in years prior to fiscal year 2013. In Iowa, a 1-cent local option sales tax for school infrastructure, known as the Secure and Advanced Vision for Education tax, became a statewide sales tax in 2009.
Report those expenses on line 21 of Schedule A as miscellaneous deductions. The deduction is shown as an adjustment to income, which means you don’t need to itemize deductions to take the benefit. You can deduct the cost of books, equipment, computers, software, supplies or other items purchased for use in classroom instruction and which are considered necessary and ordinary in your field of instruction. If you were reimbursed for part of your expenditures, you can only claim the deduction for unreimbursed costs. The educator deduction is not a teacher tax credit, which means that it reduces your taxable income, rather than being subtracted from your tax liability. This differs from a credit, which is a dollar-for-dollar reduction of taxes owed.
State income tax laws sometimes offer additional deductions to teachers, but most preschool teachers have been left out of these laws as well. Texas, for example, attempted to expand the teacher deduction on state income taxes to include preschool teachers in 2011. Other expenses that were already deductible – such as books, supplies, and other materials used in the classroom – also count toward the $250 (or $500) limit. For 2020 tax returns, the deduction is claimed on Schedule 1, Line 10, of Form 1040 or 1040-SR. The IRS will start accepting 2020 tax returns on February 12, and they are due on April 15, 2021.
In addition, education spending cuts have cost an unknown but likely significant number of private-sector jobs as school districts canceled or scaled back purchases and contracts . These job losses shrink the purchasing power of workers’ families, which in turn affects local businesses and slows recovery. State K-12 cuts slowed the economic recovery by reducing overall economic activity after the recession officially ended in mid-2009. They forced school districts to lay off teachers and other employees, reduce pay for the remaining workers, and cancel contracts with suppliers and other businesses. These steps removed consumer demand from the economy, which in turn discouraged businesses from making new investments and hiring.
If you do these things in the moment rather than waiting until the last minute, it’ll be easier to know whether the expense is eligible and how much you can claim. If you’re a teacher, chances are you’re not paid enough — and you pay out of your own pocket for some of the things you need to teach your students. This article was fact-checked by our editors and a member of the Credit Karma Tax® product specialist team, led by Senior Manager of Operations Christina Taylor. NEA, NEA Member Benefits and the NEA Member Benefits logo are registered service marks of NEA Member Benefits. If there is no additional withholding on this outside work, you want to be sure to avoid a penalty for under-withholding—i.e., when your overall tax liability exceeds the amount of tax you had withheld by certain margins.
