Expenses

Deductible Expenses
A common mistake made by teachers is not keeping track of out-of-pocket expenses, including mileage deductions. How often have you purchased supplies for your classroom which were not reimbursed? Some of the most common deductible expenses include:

• Union dues, fees, benefit assessments
• Copies
• Computer supplies for the classroom
• Books for the classroom
• Research materials
• Supplies; pens, pencils, markers (for class)
• Teaching aids; pointers, transparencies, models, etc.
• Software
• Education expenses for maintaining or improving required skills
• Convention attendance expenses
• Education expenses to meet the minimum requirements of a job
• Certain education expenses to meet the requirements of a new job
• The cost and upkeep of a uniform including cleaning, if required for the job and not common attire
• All job hunting expenses, if in the same trade or business
• Unreimbursed expenses for:
  • tuition, books, laboratory fees
  • dues paid to professional societies
  • fees paid for professional journals

Also remember mileage, meals, and travel expenses. Mileage can be deducted whenever you go to or from your place of work from a non-home location or to another job.

Unfortunately, these expenses for salaried teachers are considered itemized deductions allowable only in excess of 2% of your income when combined with other expenses, but if you are treated as a self-employed contractor you may deduct 100% of such costs as business expenses.

Tip: The ability for qualified educators to directly deduct from income up to $250 for out-of-pocket purchases of classroom materials (without itemizing) expires in 2007 unless Congress extends this date. What can you do since these expenses are now subject to a 2% of income threshold as a misc. itemized deduction? Donate! Collect your receipts, fill out a non-cash donation form and have your school acknowledge you donated the items to the school. While it does not bring back the “direct” deduction, it reclassifies your expense as a charitable donation and avoids the 2% misc. deduction income threshold rule.

Tip: How can you tell whether you are considered an employee or self-employed? If you receive a W-2 they consider you an employee. If you receive a 1099 you are being viewed as a contractor (self-employed).

Non-deductible Expenses

• Commuting expenses (from home to school and back)
• Travel as education expenses
• Job hunting expenses, if it is for a first job
• Job hunting travel expenses, if personal activities predominate
• Job hunting expenses in a new career field
• Foreign convention attendance, unless directly related to current job performance and "reasonable in location"

Tip: Technical manuals and books with permanent value are considered capital expenditures that must be depreciated over their useful life, not fully deductible in the year purchased.