Below is the second post which provides tips on tax deductions for pre-kindergarten teachers from financial consultant, Steven Daar. Please read through to fully understand the “teacher expense deduction”, and what pre-kindergarten teachers can/cannot deduct. (And if you think it’s unfair, there’s a call to action at the bottom!)
The Teacher Expense Deduction:
This deduction is one I believe pre-kindergarten teachers get the short end of the stick. The IRS allows educators to deduct $250 each year for money spent on teacher or classroom supplies and materials. However, this deduction is only provided for K-12 teachers and not pre-school teachers.
What pre-kindergarten teachers are allowed to do is this: if they itemize their deductions on Schedule A of their tax form (rather than taking the standard deduction), they may deduct expenses that are in excess of 2% of their adjusted gross salary. For example: if your adjusted gross salary is $25,000, you can only claim a deduction on your expenses that exceed $500. If you spent $700 on classroom materials, you could then deduct $200.
This is inherently unfair as pre-kindergarten teachers have out of pocket classroom expenses just as K-12 teachers do, but K-12 teachers get a deduction on the first $250 they spend but pre-K teachers only get a tax break if they spend more than 2% of their salary on classroom materials, which is hard to do! Not only that, but the K-12 teachers get the deduction on the Form 1040 rather than on Schedule A. Translation: No matter whether you itemize or take the standard deduction, expenses reported on the Form 1040 are granted a tax deduction. This means the K-12 teachers get the tax break no matter what while pre-K teachers needs to both:
A) Spend over 2% of their salary on classroom expenses and
B) Take itemized deductions over the standard deduction on their taxes
I do have some good news on this though! There is currently a bill in Congress that extends the Teacher Expense deduction through 2017 AND offers it to pre-K teachers in addition to K-12 teachers. It is the Teacher Tax Deduction Enhancement Act of 2011. The bill is currently in a House of Representatives committee. I suggest you write or email your senators & district’s congressperson to help get this bill passed and allow our pre-K teachers to take what is probably the most useful teacher deduction. (Visit this site writerep.house.gov/writerep/welcome.shtml as one method of contacting your representative.)
As mentioned in the post Pre-K teacher tax deductions – in order to accurately be able to take these deductions, you need to keep your receipts for job-related expenses. When it comes time to fill out your taxes, either bring the receipts to your accountant/tax preparer. Or if you prepare your own tax forms, use the receipts to add up the amount of money you spent on job-related expenses.
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Steven Daar is a graduate from the University of Illinois in Urbana – Champaign’s Business School with a degree in Finance. Steven Daar has put together many articles for teachers at his website teachersretirementhelp.com.