Classroom costs and tax relief: understanding the educator expense deduction

Article | August 29, 2024

Authored by Weinlander Fitzhugh

As we enter a new school year, educators often find themselves dipping into their own pockets to create a more enriching learning environment for their students. Whether it’s buying classroom supplies, educational materials, or even covering the costs of professional development, these expenses can add up quickly. Fortunately, the IRS offers some relief through the educator expense deduction. 

This guide will walk you through what you need to know to take full advantage of this deduction, ensuring that your hard-earned money is used wisely. 

Who is an eligible educator?

The educator expense deduction is intended to support those directly involved in K-12 education. Eligible educators include: 

• Teachers

• Instructors

• Counselors

• Principals

• Aides

To qualify, you must work at least 900 hours during the school year in a school that provides elementary or secondary education (K-12), as defined by state law. This means the deduction does not extend to homeschooling instructors, preschool educators, or individuals teaching in colleges or other post-secondary institutions. 

What expenses qualify?

For 2024, the maximum deduction you can claim is $300. If both you and your spouse are eligible educators and file jointly, you can each deduct up to $300, for a total of $600. While this may not cover all out-of-pocket expenses, it can certainly help reduce the burden. 

Not all classroom-related expenses are deductible, so it’s important to understand what qualifies. The IRS allows deductions for: 

• Classroom supplies like books, notebooks, pens, and crayons.

• Educational materials that enhance learning, including software and digital content.

• Industry-specific equipment needed for instruction.

• Computer equipment and cloud services used for educational purposes.

• Personal protective equipment, disinfectant, and other supplies used to prevent the spread of coronavirus. 

• Costs of professional development courses related to the curriculum you teach or the students you instruct.

However, it’s important to remember that if you use tax-advantaged funds, such as those from a Coverdell education savings account (ESA), to pay for professional development courses, this can reduce your deduction. You can only deduct expenses that exceed any tax-free withdrawals from your ESA or any distributions from state tuition programs that are not reported as income. 

Likewise, if a school or another organization reimburses you for purchases, you cannot claim those expenses. Personal expenses or items not directly related to classroom activities also do not qualify for this deduction. 

Do I have to itemize to claim the deduction?

Many taxpayers find itemizing deductions to be time-consuming and complicated, often without enough benefit to exceed the standard deduction. Fortunately, the educator expense deduction is an above-the-line deduction. This means it directly reduces your adjusted gross income (AGI), which in turn lowers your taxable income – without the need to itemize. 

How to claim the deduction

Claiming the educator expense deduction is simpler than you might think. Here’s how: 

1. Document your expenses: from classroom spending to professional development courses, save every receipt, invoice, and proof of payment. Detailed records are your best ally when tax season rolls around. 

2. Verify your eligibility: make sure you meet the IRS’s criteria. If you’re a teacher, principal, or aide working at least 900 hours in a qualifying school, you’re likely good to go. 

3. Complete your tax return: when it’s time to file, include the deduction on Schedule 1 of your Form 1040. This is where you report additional income and adjustments, and it’s where your above-the-line deduction will help lower your taxable income. 

4. Use IRS resources: Need more guidance? The IRS provides helpful resources like Topic No. 458 to clarify any questions you might have. It’s always a good idea to consult these materials to ensure you’re on the right track. 

Maximize your savings

Taking advantage of the educator expense deduction is a smart move, but it’s just one piece of the puzzle. To ensure you’re making the most of all possible deductions and credits, consult with a CPA. A professional can help you navigate the complexities of tax law, ensuring you maximize your savings and keep more of your hard-earned money. Don’t leave potential deductions on the table – contact our office for personalized advice and make sure you’re fully prepared for the next tax season.