taxes

Back To School 2014 - Expired Educator Expenses and Unreimbursed Employee Expense

Taxes

When my son was in kindergarten, you could find me in his classroom every Friday morning. Like many of my friends, I was a classroom mom since funding cuts meant that there were no teacher’s aides at school.

Each child in kindergarten had a cubby where they stashed their belongings, including school supplies dutifully labeled with Sharpie markers. There was one cubby that was almost always empty. That cubby belonged to a sweet little boy whose mom couldn’t afford to stock it with crayons, pencils and school scissors that the other kids – like mine – were fortunate enough to have. Yet, that same little boy was always prepared at his desk, crayons, pencils and school scissors at the ready. I finally figured out what was happening: his kindergarten teacher slipped supplies onto his desk every morning. None of the other kids noticed, which is how it should be.

Over the year, I also discovered new books in the reading nook, refilled soap pumps at the sink, fresh paints in the art center and even a stash of clean underwear – just in case. They were, after all, kindergarteners.

Those supplies weren’t being topped up by the school. They were paid for out of pocket by the teacher. When I asked one day if I could help out, she shook her head. “But,” I pushed, “This is your money.” She looked at me and said, simply, “These are my kids.” And they were.

With many schools struggling to keep the lights on, teachers often find themselves dipping into their own pockets to buy books and supplies for “their” kids.

For the 2013 tax year, the IRS offered teachers and other eligible educators a little bit of a break. Under the rules, if you were an eligible educator, you could deduct up to $250 of any unreimbursed expenses paid or incurred for books, supplies, computer equipment, other equipment, and supplementary materials used in the classroom; those expenses must have been paid or incurred during the 2013 tax year. If your spouse had qualified out of pocket educator expenses and you file jointly, you could claim up to $500. Report the deduction on either line 23 of the federal form 1040 or line 16 of form 1040A – it’s available even to those eligible educators who did not itemize in 2013. For purposes of the deduction, eligible educators were defined as teachers, instructors, counselors, principals or aides for kindergarten through grade 12 who put in at least 900 hours during the school year in a school that provides elementary or secondary education, as determined under state law.

It was a nice break for educators but one that Congress didn’t see fit to renew. The educator expense deduction expired after December 31, 2013. That means that you may claim it on your tax year 2013 tax return (if you’re still on extension) but you may not claim it on your 2014 tax return (assuming that Congress doesn’t renew it retroactively).

Without the educator expense deduction, teachers and other school employees still have one more bite at the apple in 2014: those taxpayers who itemize may claim unreimbursed employee expenses above the $250 limit on a Schedule A, subject to the 2% rule. The 2% rule means that you can only deduct expenses which are in excess of 2% of your adjusted gross income (AGI).

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