IRS to allow educator expense deduction for 2006 tax return

According to a December 22, 2006 article on the IRS website, educators will again be allowed to deduct up to $250 in out-of-pocket classroom expenses. The article explains the Tax Relief and Health Care Act of 2006 just signed into law by President Bush. HOWEVER, the article also says that the IRS will not be able to process returns that claim these deductions until February!

If you're like me (I like to get a refund each year), I file our federal tax returns as soon as I get my W-2's. This year, though, I'll wait just a little longer so that my wife can claim her $250 deduction.

From the article:

• Educators must file Form 1040 in order to take the deduction for up to $250 of out-of-pocket classroom expenses. It cannot be claimed on Form 1040A.
  
• The deduction for educator expenses will be claimed on Form 1040, line 23, “Archer MSA Deduction.” Enter "E" on the dotted line to the left of that line entry if claiming educator expenses, or "B" if claiming both an Archer MSA deduction and the deduction for educator expenses on Form 1040. If entering "B," taxpayers must attach a breakdown showing the amounts claimed for each deduction.

The IRS has a PDF that explains the instructions above.

Hope I haven't bored you too much with this post, but I know from experience how much teachers spend on their classrooms each year, and I want all eligible teachers to be aware of this very recent change. This deduction was claimed on 3.5 million returns last year.