Educator Expense Tax Deduction: Teacher Tax Deductions

Educators work hard to inspire and guide young minds, often choosing to go above and beyond the basic job description to help their students get the most out of the classroom. As an eligible educator, you are entitled to tax deductions for the unreimbursed portion of these expenses. Read on to learn more about the educator tax deduction and how it works.

Key Takeaways

• Eligible educators may deduct up to $300 ($600 if both spouses are eligible educators and file a joint return) of unreimbursed qualifying trade or business expenses.
• The educator expense tax deduction is an adjusted gross income deduction for eligible educators.
• Eligible educators work in an elementary or secondary school as determined under state law.
• Eligible educators include teachers, principals, instructors, counselors, and aides who work more than 900 hours in a tax year.
• Qualified expenses are necessary and ordinary education-related expenses and courses, books, computer equipment, and supplies such as disinfectant or PPE (personal protective equipment) to prevent the spread of coronavirus.

Table of Contents

• Who Is Eligible for Educator Expense Deduction
• Who Is Not Eligible for Educator Expense Deduction
• Qualified Educator Expense Deduction
• Limitations Of Educator Expense Deduction
• How Does the Educator Expense Work
• Use FreshBooks for Easier Tax Preparation
• Frequently Asked Questions

Who Is Eligible for Educator Expense Deduction

IRS tax law is clear about who can qualify for the educator expense deduction. You must work at a school that provides elementary or secondary education as determined under state law. 

For the tax year, kindergarten through grade 12 teachers, physical education teachers, principals, instructors, counselors, and aides all qualify if, in a tax year, they work for at least 900 hours in a school year.

Who Is Not Eligible for Educator Expense Deduction

You are not eligible for an educator expense tax deduction if you are: 

• A homeschool teacher
• A camp counselor
• A preschool or daycare teacher
• A college, trade school, or university administrator, counselor, instructor, teacher, teacher’s assistant, or professor
• Work less than 900 hours in a tax year (part-time or as a substitute teacher).

Qualified Educator Expense Deduction

Not all occurred or paid expenses qualify as classroom expenses. You must have paid for these expenses during the tax year to qualify. Also, only unreimbursed expenses qualify as teacher tax deductions.

So, what purchases qualify for the deduction? General items include:

• Expenses related to your participation in professional development courses
• Books
• Classroom supplies (pens, paper, educational posters)
• Computer equipment (including related software and services)
• Other equipment
• Supplementary materials that you use in the classroom 

For health or physical education courses, expenses for supplies are qualified expenses only if they are related to athletics.

Eligible educators can also deduct expenses for disinfectant, personal protective equipment (PPE), and other supplies necessary to prevent the spread of COVID-19.

Knowing the rules and regulations surrounding the tax deductions available to you as an educator can seem overwhelming. Learn how FreshBooks can take the pain out of tax preparation with this short video.

Limitations Of Educator Expense Deduction

There are limitations to the educator expense tax deduction. To qualify for the teacher tax write-offs, the IRS states the cost of the expenses must exceed the following amounts for the tax year:

• Any reimbursements you receive for expenses that aren’t reported to you in box 1 of your Form W-2
• Any tax-free withdrawals from your Coverdell education savings accounts
• Any distribution from a qualified state tuition program that you exclude from income
• The interest on Series EE and Series I Bonds that you exclude from income because you paid qualified higher education expenses

The maximum deduction per year is up to $300 or $600 if:

• You are filing jointly with a spouse
• Your spouse is also an eligible educator
• The total expenses do not exceed $300 per person

How Does the Educator Expense Work

Each school year, private and public school educators spend their personal money on supplies to provide a better-than-adequate education and a safe environment for students in kindergarten to grade 12. The educator expense deduction offers a way to recoup part of these expenses. It’s an adjusted gross income deduction claimed on Form 1040, Form 1040-SR, or Form 1040-NR. It is NOT part of itemized deductions claimed on Schedule A.

To validate your tax deductions, keep your receipts organized and track your unreimbursed expenses. This practice not only ensures you benefit from the educator expense deduction but also provides clarity on how savings bonds work in conjunction with your overall financial planning.

Use FreshBooks for Easier Tax Preparation 

As an educator, you work hard throughout the year for your students. Now that you know more about the qualified educator expenses, you can enjoy a little more of your money. FreshBooks can simplify tax time by tracking and categorizing your expenses. 

Ensure you are getting the most out of your tax return. FreshBooks accounting software can take the guesswork out of tax preparation and filing. Try FreshBooks free by signing up today to see how easy tax filing can be!

Navigating the rules and regulations of tax credits and deductions can seem daunting, but it doesn’t have to be. FreshBooks offers guides for many tax relief topics. Learn more about Small Business Tax Deductions and start getting the most out of your money today.

FAQs about Educator Expense Tax Deduction

FreshBooks has summarized some of the frequently asked questions about tax breaks for educators below for quick reference. Have a look!

Are teacher education expenses tax-deductible?

Yes, teacher education expenses are an adjustment to your gross income. Eligible educators can receive a deduction of up to $300 for qualifying expenses. Married spouses who file jointly can deduct up to $600 if both spouses are eligible educators and the total spent does not exceed $300 each.

Do I need receipts to claim educator expenses on taxes? 

Yes, you will need all available hard copies and digital receipts to demonstrate your expenses qualify for the educator expense deduction on your taxes. FreshBooks accounting software can track and categorize your expenses and help you simplify your tax filing process.

Is rent a deductible education expense?

Rent is not a deductible education expense. The educator expense tax deduction is only for supplies related to schooling and professional education courses. Your rent doesn’t qualify as school supplies. If you tutor out of your home or rental space, you can deduct a portion of it as a small business expense.

Can I deduct my student loan interest?

You can deduct your student loan interest up to $2500 or the actual amount of interest paid, whichever is lesser, on your federal tax returns. You claim this deduction as an adjustment to your income. You cannot deduct it as an educator expense because it is a deduction on interest paid on student loans. The educator expense deduction is claimed separately.

How much educator expenses can I claim?

You can claim up to $300 in unreimbursed eligible expenses as an adjustment to gross income reported on your federal tax return. 

Suppose you paid for the expenses using a distribution from a qualified state tuition program, tax-free withdrawals from a Coverdell education savings account, or interest on savings bonds. In that case, you can only claim the amount that exceeds these monies.

Can a teacher write off a computer? 

Yes, computer equipment, including related software, qualifies for the educator expense tax deduction. You can only deduct up to $300 in unreimbursed expenses. This means you are likely only able to deduct a small portion of the cost of the computer.

More Useful Resources

• Requirements for Tax Exemption
• How Much Do You Have to Make to File Taxes?
• Are Closing Costs Tax Deductible?
• Are Funeral Expenses Tax Deductible?
• Mileage Tax Deduction Rules
• Sales Tax Deduction
• Are Home Improvements Tax Deductible?
• SALT Tax Deduction
• Mortgage Interest Deduction
• QBI Tax Deduction

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