Teacher’s Expense Deduction Extended Through 2007

Tax Tips

If you’re a teacher, we have good news for you!  On December 20, 2006 President Bush signed the Tax Relief and Health Care Act of 2006 which extends various deductions and credits that expired on December 31, 2005.

For the past couple of years, you have had a special provision allowing a deduction up to $250 of books and classroom supplies without itemizing deductions. It’s been around for a couple of years and is now extended through 2007.

The deduction is available if you are an eligible educator in a public or private elementary or secondary school. To be eligible, you must work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide.

Qualified expenses are unreimbursed expenses you paid or incurred for books, supplies, computer equipment (including related software and services) and supplementary materials that you use in the classroom. For courses in health and physical education, expenses for supplies are qualified expenses only if they are related to athletics.

If your classroom expenses were more than $250, you can deduct the amount over $250 on your Schedule A, under Miscellaneous Deductions, subject to a 2% Adjusted Gross Income limitation.

For more information on this deduction, check out the IRS’ Teacher’s Should Save Receipts

The following deductions and credits were also extended through 2007:

  • Deductions
    o Sales tax deduction
    o Higher education expenses (tuition and fees deduction)
    o Qualified leasehold improvements ("fast write-off" deductions)
    o New contributions to Archer medical savings accounts (Archer MSA)
  • Credits
    o DC first-time homebuyer credit
    o Work opportunity tax credit (WOTC)
    o Welfare-to-work tax credit (WWTC)
    o Indian employment tax credit
    o Increasing research activity credit

Comments (3) Leave your comment

  1. It’s nice to know that the IRS is hilnepg people that are struggling in their respective tax returns with the help of giving people a Tax Return Extension.

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