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Tax Tip of the Week
For the week of
April 22, 2002

New law gives teachers a new tax deduction

The recent economic stimulus package passed by Congress and signed into law by President Bush gives teachers a new tax break. Teachers who spend their own money to buy supplemental classroom supplies can write off up to $250 in expenses as an "above-the line" tax deduction.

Keep your receipts. The deduction applies to amounts spent for books, supplies, equipment, and supplementary materials used in your classroom. In order to write off your expenses, you'll need to keep receipts that back up your deduction.

To qualify for this new deduction, you must be an elementary or secondary school teacher, instructor, counselor, or principal. In addition, you must work at least 900 hours during the school year.

You don't have to itemize to take this break. Under prior law, you could write off legitimate teaching expenses only as an itemized deduction and only to the extent that your total miscellaneous deductions exceeded 2% of your adjusted gross income.

This new above-the-line deduction lets you write off up to $250 of qualified expenses even if you use the standard deduction on your tax return. In other words, you don't have to itemize deductions to receive this tax break.

Keep in mind that this new tax break is temporary. The new deduction only applies to amounts spent in 2002 and 2003.

For details about this new law and for your other tax planning needs, call us. We are here to see that you pay no more tax than the law requires.


Prior Tax TipsClick here to view previous tax tips.

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