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Educators may deduct expenses without itemizing tax returns
Sept. 19, 2002
Federal tax law changes taking effect in 2002 provide a new deduction for some educators. Eligible educators will be able to deduct up to $250 in qualifying expenses as an adjustment to income on their federal tax return even if they do not itemize deductions on Schedule A (Form 1040). This adjustment to income will be for expenses paid or incurred during tax years beginning in 2002 or 2003.
Eligible educators include teachers, instructors, counselors, principals, or aides working at least 900 hours during the school year in a school providing elementary or secondary education, including kindergarten through grade 12 levels. Eligible expenses include unreimbursed expenses paid or incurred for such items as books, supplies, computer equipment or software, and supplementary materials.
In the past, the deduction was limited to expenses that exceeded 2 percent of adjusted gross income and it could not be included as a deduction if a taxpayer used one of the standard deduction amounts. With the new law, more educators will be able to deduct out-of-pocket expenses.
Although there are some restrictions on this new deduction, many elementary and secondary educators can now benefit by this adjustment to income that will lower their tax bill and could result in a higher refund.
Additional information regarding the new deduction for educators, including who is eligible and what expenses qualify, is available in Publication 3991, Highlights of the Job Creation and Worker Assistance Act of 2002, on the Internal Revenue Service's website at www.irs.gov or by contacting the IRS toll-free at 1-800-829-1040.