If you are a teacher that spends a lot of money out of pocket for classroom needs you may get a break come tax time. The Internal Revenue Service has increased the deduction limit for the total amount of money teachers spend on school supplies. Since 2002 the maximum deductible amount for classroom expenses was $250. It has now been raised to $300.
This means that teachers can spend a little more money on their students before it starts to eat into their personal bottom line.
For example: If you are a math teacher and you spend $500 on posters, calculators, and books for your classroom in 2022, you can deduct up to $300 of those expenses on your tax returns.
According to the IRS, this is the first time they have raised the limit but will do so in the future in order to keep up with inflation.
“For tax years 2002 through 2021, the limit was $250 per year. The limit will rise in $50 increments in future years based on inflation adjustments,” the IRS said.
Almost anyone who works in education and directly with students is eligible to take this deduction. That includes K-12 teachers, principals, aides, and counselors. Educators who are married and filing jointly are also eligible for the deduction but it is still just $300 per person for a total of $600.
Qualified expenses include the obvious items like books, pencils, paper, and other materials typically used in the classroom. Electronics and software may qualify too if they are used in the service of students. Since the pandemic cleaning supplies and other items that mitigate the spread of COVID-19 have also been deductible.
People who plan to take advantage of this deduction should keep their receipts and other documentation. Tax preparation services especially the online ones will often let you file without showing or uploading the receipts, but in the event of an IRS audit, the teacher would be expected to be able to produce them. The IRS recently received $80 billion in new funding which many suspect they will use to hire more people in order to audit tax returns more closely.
The deduction is meant to help teachers help offset the cost of buying supplies for their teachers. Teachers often complain about the amount of money they spend out of pocket. Most schools have a reimbursement program, but few cover the full cost of classroom supplies. One survey from June of 2021 found that teachers spent and average of $750 of their own money.
Read the the full IRS announcement here. (Internal Revenue Service)