With back-to-school sales in full swing, the Internal Revenue Service is reminding teachers and other educators to save their receipts for purchases of books and classroom supplies.
These out-of-pocket expenses may lower their 2005 taxes. The deduction is available to eligible educators in public or private elementary and/or secondary schools.
To be eligible, a person must work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide. In California, more than 300,000 teachers and other educators may qualify for the deduction. Educators may subtract up to $250 of qualified expenses when figuring their adjusted gross income (AGI) for 2005. And this deduction is available whether or not the taxpayer itemizes deductions on Schedule A.
"It is important for teachers and educators to save their receipts to help prepare their taxes," IRS spokesperson, Jesse Weller said.
The IRS suggests that educators keep records of qualifying expenses in a folder or envelope with a labeled "Educator Expense Deduction," noting the date, amount and purpose of each purchase. This will help prevent a missed deduction at tax time. Under current law, this deduction is scheduled to expire at the end of 2005. In tax year 2003, the most recent year for which figures are available, educator expense deductions totaling almost $814 million were claimed on nearly 3.3 million individual income tax returns.
"Some educators spend more than the deduction limit," Weller says, " But taking a lesson from my third grade teacher, any tax deduction is better than a poke in the eye with a sharp stick."
For more information, see Tax Topic 458 on the IRS web site at www.irs.gov or call the IRS Tele-Tax system toll-free at 1-800-829-4477 and listen to Topic 458.