Educators, Don't Forget to Claim This Adjustment to Your Income

If you are a teacher teaching right from kindergarten through great 12, or if you are an instructor, principal, counselor or aide working in a school for at least 900 hours during a school year, you are eligible educator according to IRS. In that case, you can deduct an amount up to $250 towards certain costs as an adjustment to your gross income. If you are filing jointly and both you and your spouse are eligible educators, you can claim maximum $500. However, neither spouse can claim more than $250 towards his or her qualified expenditure.

What constitutes qualified expenditure?

According to IRS, it includes ordinary and necessary costs paid in connection with the education. Here is a list of such costs for your ready reference -

Books or subscriptions - These include technical books, professional textbooks, professional publications, publication journals, newspapers, magazines and journals.

Teaching aids - They can be films, slides and other materials.

Education costs - These can include books, papers, writing materials, hotel/motel expenses, expenses towards professional development.

Tools and supplies - These can include camera, films, classroom supplies, locks, lockers, supplies, postage, stationery, tape recorders, tapes, flashlight, briefcase and other classroom supplies.

Cost towards uniforms - These can include expenses on dry cleaning, lab coats, sports clothing, goggles, school logo items, T shirts, hats, special use items.

Auto costs - These can include costs towards meetings at other schools, transport of students and transportation during training.

Miscellaneous costs - including costs for computer usage, professional license, cell phone, field trips etc.

Remember, an ordinary expenditure which is common and excepted in your educational field can be qualified as expense eligible for deduction. They have a common logic - costs which are helpful and appropriate for your profession as an educator.

There are certain costs specifically disqualified by IRS such as expenditure for home schooling, expenses for non athletic supplies for courses in health or physical education.

You need to reduce the qualified expenses by the following amounts -
Tax free distribution of interest under an education savings bond program.
Tax free distribution of earnings from a qualified due SH and program.
Tax for the distribution of earnings from a Coverdell education savings account (ESA).
Any reimbursement you receive towards these expenses and not reported on your form W-2.By filling your tax return, this deduction can be claimed on line 23 on form 1040 or line 16 on form 1040A.

If your cost of a particular item is more than $250, there is one more method to claim it. Suppose it is $1000, you can claim $250 as educator expenses under this category and the balance $750 can be claimed as a miscellaneous itemized deduction.

There are all sorts of financial decisions you take in your life. You make gifts to your children; you make investments and acquire real estate. Do you really know the tax implications of these decisions, which can save you thousands of dollars?