| Teachers
Should Save Receipts for New Tax Deduction
The
Internal Revenue Service recently advised teachers to save their
receipts for purchases of books and classroom supplies. These
out-of-pocket expenses may lower their taxes, thanks to a recent
change in the law.
“Many
teachers dip into their own pockets when funds for classroom supplies
run out before the school year does,” said IRS Commissioner Charles
O. Rossotti. “A new law gives them a tax break this year and next,
and we want them to have the records they’ll need to claim it
on their returns.”
The new deduction is available to eligible educators in both public
and private elementary and secondary schools. They must work at
least 900 hours during a school year as a teacher, instructor,
counselor, principal or aide.
Taxpayers may subtract up to $250 of qualified expenses when figuring
their adjusted gross income (AGI). They will not need to itemize
deductions to get this benefit. Prior to the change in the law,
educators could take such expenses only as miscellaneous itemized
deductions, which must be reduced by two percent of AGI.
Educators who excluded education savings bond interest or payments
from qualified tuition programs, or made tax-free withdrawals
from an education savings account, will be able to claim the new
deduction only to the extent their qualified expenses exceed the
tax-free amounts.
The IRS suggests that educators keep records of qualifying expenses
in a folder or envelope with a label such as “Educator Expenses
Deduction,” noting the date, amount and purpose of each purchase.
This will help prevent a missed deduction at tax time.
Details on this and other new tax law changes are in IRS Publication
3991, “Highlights of the Job Creation and Worker Assistance Act
of 2002,” available on the IRS Web site at www.irs.gov or by calling
1-800-TAX-FORM (1-800-829-3676).#
Education
Update, Inc., P.O. Box 20005, New York, NY 10001.
Tel: (212) 481-5519. Fax: (212) 481-3919.Email: ednews1@aol.com.
All material is copyrighted and may not be printed without express
consent of the publisher. © 2002.
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