Education Matters US

Tuesday, August 30, 2005

By Anita Szoke
Source: Peoria Journal Star

Out-of-pocket expenses can lower taxes

PEORIA – Teachers, save those back-to-school receipts.
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.

The out-of-pocket expenses can lower their 2005 taxes, said IRS spokeswoman Sue Hales.

The deduction is available to eligible educators in public or private elementary or secondary schools, she said. To be eligible, a person must work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide.

Educators may subtract up to $250 of qualified expenses when figuring their adjusted gross income for 2005. This deduction is available whether or not the taxpayer itemizes deductions on Schedule A.

“Every little bit helps,” Hales said.

The IRS suggests educators keep records of qualifying expenses in a folder or envelope with a label such as “educator expense deduction,” noting the date, amount and purpose of each purchase. This will help prevent a missed deduction at tax time, Hales said.

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 nearly $814 million were claimed on 3.3 million individual income tax returns.

For more information, call the IRS Tele-Tax system toll-free at (800) 829-4477 and listen to Topic 458.