Teachers get a (tax) break

Historically, teachers have been allowed an “above the line” deduction (with an annual cap of $250) for various school supplies. However, starting in 2016, in addition to allowing teachers a deduction for school supplies, the PATH Act allows teachers to also deduct (subject to the overall annual cap of $250) amounts paid for certain professional development courses. Such courses must be related to:

  • The curriculum in which the teacher provides instruction, or
  • The students for which the teacher provides instruction.

Before this change, a teacher’s unreimbursed expenses for professional development were classified as miscellaneous itemized deductions subject to the 2 percent threshold which, many times, caused the teacher to get little or no tax benefit from the expenditure.
Starting in 2016, teachers should be aware of this change and retain documentation of unreimbursed costs they incur for professional development courses.

Source: Don Farmer, CPA