Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Adjustments to Income Workout

Educator Expenses

Case Study 3: Determining the Deduction

Bob teaches elementary school. His wife Janet teaches high school chemistry. Here is how a volunteer helped them determine if they can take the deduction for educator expenses.

Sample Interview
VOLUNTEER SAYS   JANET & BOB RESPOND
 
You've already mentioned that you both work full-time as teachers, so you may be able to deduct some of the money you spent on qualified educator expenses. Can you tell me how much you spent, or did you bring your receipts? Janet: Yes, all teachers keep careful records of their expenses. Here are my receipts and here are Bob's.
 
Can you tell me what you purchased? Janet, maybe you could go first. Janet: Sure. Three receipts are for quick reference cards for my chemistry students. And two are for special reagents the department doesn't stock.
 
Your receipts add up to $382. Now, we can count only the first $250 of educator expenses, but because you are married and filing jointly, we can count up to $250 for Bob. Bob, tell me about your expenses. Bob: These four receipts are for art supplies—paint and brushes, as you can see—and these two are for special papers and sculpting clay.
 
Yours total $263. Now, did either of you receive any reimbursement that is not shown on Form W-2? Janet: No, we paid these expenses out of our own pockets.

Bob: Wait, now that I think about it, I got reimbursed $50 for the clay.
 
That would bring your total down to $213. Janet: Can't we apply some of my excess expense to Bob and bring his total up to $250?
 
No, I'm sorry, each person's expenses have to stand alone. Janet: Okay.
 
Did you redeem U.S. series EE or I Savings Bonds during the tax year? Janet: No, we didn't. What if we had?
 
We would complete a form to see what percentage of the tax-free interest should be applied as a reimbursement. One more thing: did you receive distributions from a qualified tuition program or a Coverdell education savings account? Bob: No, neither of those.
 
Okay, we can claim $213 for Bob and the maximum $250 for Janet. That gives you a total of $463 on your joint return as a deduction for educator expenses. Any questions before we go on? Janet: No, I think we understand.
 
[On the intake and interview sheet, indicate that the taxpayers are entitled to the educator expense adjustment.]