Taxpayer asks:
I called the IRS they couldn’t help me and told me to call our local office since they do not know our state laws. I did. They couldn’t give me live help on the phone unless I was a business and to have my SS number ready.
TurboTax gave me a “I think so” and then put me on hold. They came back and said “well it looks like you qualify”.
We live in Texas where homeschooling is legally considered a private school. We homeschool year round. I am the teacher and my husband the principle, teacher, aide, substitute etc…..
I simply want to know can I take the Educators expense deduction?
Taxgirl says:
The deduction that you’re referring to is the Educator Expense deduction found on your federal form 1040 at line 23.
It’s an “above the line” deduction which means that you can take the deduction even if you don’t itemize. The deduction had expired but was extended under the most recent tax deal.
The value of the deduction is up to $250 for expenses for books, supplies, computer equipment, other equipment, and supplementary materials used in the classroom which are paid for by an “eligible educator.” The deduction of an eligible educator for this purpose is found at 26 USC §62(d):
(1) Eligible educator
(A) In general. For purposes of subsection (a)(2)(D), the term “eligible educator” means, with respect to any taxable year, an individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.
(B) School
The term “school” means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law.
In some states, such as Texas, home schools are considered private schools by case law and statute. That analysis is enough for some folks who interpret that piece of the Tax Code to include private schools and thus, qualify for the deduction.
I happen to think differently. You have to look beyond the definition of “eligible educator” and look at the bigger picture.
The deduction is found at 26 USC §62 which is where you find statutory adjustments to income. The subsection that defines “eligible educator” refers back to another subsection of the Code. And here’s where context matters. That subsection, (a)(2), deals with “Certain trade and business deductions of employees.” Specifically, in the paragraph just above, the Tax Code says:
“[T]he deductions allowed by part VI (section 161 and following) which consist of expenses paid or incurred by the taxpayer, in connection with the performance by him of services as an employee, under a reimbursement or other expense allowance arrangement with his employer.”
What this all means is that that the deduction is intended to reimburse paid employees for out of pocket expenses. We get a little more clarity when you look at the original purpose of this special deduction which was to allow teachers who might not itemize the ability to claim the deduction above the line instead of taking it as an unreimbursed job expense on Schedule A. The IRS notes as much at Topic 458 when it refers to the deduction as “otherwise deductible as a trade or business expense.”
All of that statutory interpretation notwithstanding, the IRS also offers a simple “no” at Publication 17:
Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. (emphasis added)
I hope that helps!
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
