Continue to probe to learn if the taxpayer or spouse received reimbursement that would reduce the amount of their educator expenses. For example, ask:
Educator expenses are reduced by any of these applicable reimbursements.
Evelyn managed to work 1000 hours as an educator during the tax year while completing graduate studies. She spent $200 to buy qualified school supplies for her students. She covered $400 of her own educational expenses from her Coverdell ESA. She cannot take the deduction for educator expenses.
Educator expenses are reported in the Income section of Form 1040. Don’t forget to reduce the total educator expenses by any reimbursements, nontaxable savings bond interest, or nontaxable distributions from an ESA or QTP.