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Across Texas, teachers are back in the classroom, instructing K-12 students. Some educators – counselors, instructors, principals, teachers, or teacher’s aides – may have purchased classroom supplies or incurred professional development fees. If not reimbursed by the educator’s employer or another source, it may be possible to deduct specific expenses on next year’s tax returns using the educator expense deduction. A Houston CPA firm can help you better understand this deduction and provide expert assistance in planning, preparing, and filing your annual tax returns.

A Closer Look at the Educator Expense Deduction

The IRS allows specific elementary, middle, or high school personnel to claim the educator expense deduction if they paid for classroom supplies and materials out of pocket and have worked for a minimum of 900 hours during the academic year. It applies only to counselors, instructors, principals, teachers, and teacher’s aides.

According to the IRS, “they can only claim this deduction for expenses that were not reimbursed by their employer, a grant or other source.”

Eligible educators can deduct up to $250 per person – or $500 if your spouse is a qualified educator and you both file a joint tax return – of non-reimbursed trade or business expenses. The IRS advises keeping supporting documentation, such as sales receipts, before claiming this deduction (IRS, 2021).

The benefits of year-round tax planning and preparation cannot be overstated. For example, a Houston CPA firm can help you understand recent tax changes and identify which deductions you may qualify for to potentially maximize your refunds and minimize any liabilities.

What Expenses Qualify for the Deduction?

According to Topic No. 458, Educator Expense Deduction, classroom supplies, and development courses qualify for the deductible, assuming your employer did not reimburse you. You are also ineligible if you receive a grant, scholarship, or any other form of reimbursement. Other restrictions may also apply.

Per the IRS, qualifying expenses may include:

  • Books
  • Supplies
  • Professional development course fees
  • Computer equipment, software, and services
  • Supplementary materials used in the classroom
  • Health or physical education courses provided the cost was for athletic supplies

You may also qualify for expenses incurred after March 12, 2020, to help prevent the spread of COVID-19. That includes personal protective equipment (PPE), disinfectant products/equipment, and other qualifying supplies. Please consult a Houston CPA firm for assistance determining what expenses will qualify for this deduction. A Houston CPA firm can also assist you in filing out the correct forms to claim this deduction (IRS, 2021).

Hollis Lewis & Company, PLLC is a Houston CPA firm committed to providing our clients with professional and personalized tax preparation, accounting solutions, and business services.

Our certified public accountants are respected financial advisors with two conveniently located offices in Harris and Montgomery counties and more than 90 years combined experience. Please contact us today to discuss your unique accounting, business, or tax preparation needs.

Resources:

“A tip for teachers: Some educator expenses may be tax-deductible.” IRS, July 20, 2021.

“Topic No. 458 Educator Expense Deduction.” IRS, March 12, 2021.