Changes to the Educator Out-of-Pocket Expense Deduction

Back to School News for Educators: Increase in the Out-of-Pocket Expense Deduction

Changes to the Educator Out-of-Pocket Expense Deduction

The new school year is just around the corner – and it’s time to consider changes to the tax law that will affect educators. The IRS has increased the deduction for eligible out-of-pocket educator expenses from $250 to $300 for the tax year 2022.

Who is eligible for the deduction?
A qualified educator includes anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during the school year. Both public and private school educators qualify. If married and filing a joint return – and both are qualified educators – each spouse is qualified for a $300 deduction.

What is deductible?

• Books, supplies, and other materials used in the classroom.
• Equipment, including computer equipment, software, and services.
• Protective items to stop the spread of COVID-19 disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint, or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention.
• Professional development courses related to the curriculum they teach, or the students they teach. But the IRS cautions that, for these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit.

As with all deductions and credits, it is important to keep good records, including receipts, cancelled checks and other documentation.

This is the first increase of the educator expense deduction in 20 years, and the IRS has plans to increase the limit by $50 increments in future years, based on inflation adjustments. Wishing all educators a terrific 2022-2023 school year!

Please contact your Herbein + Company, Inc. tax consultant if you have questions regarding this article at the form below.

Article Contributed by Adam Dopkowski.