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New Teacher Deduction

Elementary and secondary school teachers and personnel often find themselves paying school-related expenses out of their own pockets. While this unfortunate situation may not change anytime soon, a 2002 tax law change provides a bit of relief. You can now deduct up to $250 of unreimbursed expenditures for books; most supplies; computer hardware, software, and services; other equipment; and supplementary materials used in the classroom. This is something to keep in mind as the beginning of the next school year rapidly approaches.

The new deduction is “above-the-line.” So you need not itemize to claim the write-off. It is available for any qualifying expenses paid in 2002 and 2003 (up to the $250 per year limit).

You are generally eligible if you are a Kindergarten though grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during school periods falling within 2002. For 2003, the same 900-hour rule will apply. If you incur school-related expenses in excess of the $250 limit, you may be entitled to an additional write-off if you itemize.

The IRS suggests that you set up a folder or envelope to keep receipts for your unreimbursed school-related expenses. On each receipt, note the date, amount, and purpose of the school-related expense item. That way, you’ll have all the necessary documentation on hand at tax return time.