Filed an Extension? You Can Still Claim the Educator Expense Deduction

Teachers and students all said goodbye to the lazy days of summer and headed back to school this fall. Are you one of the many teachers who filed a tax extension last spring, intending to file your taxes this summer, but didn’t quite get around to it? You can’t put it off much longer, because October 15 is the final tax deadline.

As you gather together your paperwork for 2011, don’t forget the educator expense tax deduction. It’s available to teachers, instructors, counselors, principals and aides for grades K-12 who work at least 900 hours during the school year. (Parents who home school their children are out of luck, since the costs for home schooling aren’t eligible for this deduction.)

If you qualify, you can claim up to $250 of your out-of-pocket expenses for classroom supplies, materials, books, computer equipment, software, other equipment, and supplementary materials, as long as you didn’t receive reimbursement. You don’t have to itemize your deductions either.

If you and your spouse are both teachers, you can double up and each claim the deduction for a combined deduction of $500. Of course, you can’t each claim a deduction for the same costs, so be sure to split the purchases between you for maximum tax savings.

Now for the fine print, which affects just a few people:

• If you teach courses in health and physical education, your expenses for those courses must be related to athletics.
• The educator expenses have to exceed any interest on US savings bonds that were used to pay education expenses and excluded from income.
• The expenses must exceed any tax-free distributions from a 529 plan or other tuition program that you excluded from income, including any tax-free withdrawals from your Coverdell Education Savings Account.

Congress decided a few years ago to give teachers a break temporarily. Though Congress extended the deduction each time it was set to expire, it wasn’t extended this year, so as things stand now there is no educator deduction for 2012. But it wouldn’t hurt to hang onto your receipts for 2012 just in case Congress acts to reinstate it later this year.