As the new school year begins, students and parents focus on back-to-school shopping for supplies, backpacks, and clothing. However, teachers, counselors, and other educators are also spending their own money on classroom materials, often without reimbursement. The good news? Eligible educators can claim tax deductions for these expenses, with expanded opportunities starting in 2026 under the One Big Beautiful Bill Act (OBBBA). Here’s how to take advantage of these tax benefits.
Current Above-the-Line Deduction for Educators
Educators can reduce their taxable income by claiming an above-the-line deduction for unreimbursed classroom expenses. This deduction doesn’t require itemizing and lowers your adjusted gross income (AGI), potentially boosting other tax breaks affected by AGI limits.
Who Qualifies?
You’re eligible if you:
- Work as a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide.
- Log at least 900 hours per school year in a state-recognized elementary or secondary school.
Deduction Details
For 2025, you can deduct up to $300 in qualified, unreimbursed expenses. For joint filers where both spouses are eligible educators, the limit is $600, but each spouse is capped at $300. This amount is adjusted periodically for inflation, though increases aren’t guaranteed annually.
Qualifying Expenses
Eligible costs include:
- Books and classroom supplies.
- Computer equipment, including software.
- Other classroom materials.
- Professional development courses.
- For health and physical education courses, supplies related to athletics.
New Itemized Deduction Under the OBBBA
The OBBBA permanently suspends the Tax Cuts and Jobs Act’s (TCJA) elimination of miscellaneous itemized deductions subject to the 2% AGI floor, which had previously included unreimbursed educator expenses. Starting January 1, 2026, a new miscellaneous itemized deduction for educator expenses will be available, in addition to the $300 above-the-line deduction.
Expanded Eligibility and Expenses
This new deduction broadens eligibility to include interscholastic sports administrators and coaches. Qualifying expenses are also more inclusive—for example, health and physical education supplies don’t need to be athletics-related. Unlike the above-the-line deduction, this one has no specific dollar cap and isn’t subject to the 2% AGI floor.
Itemizing vs. Standard Deduction
To claim the new deduction, you must itemize your deductions. With the OBBBA making the TCJA’s higher standard deductions permanent, itemizing only makes sense if your total itemized deductions exceed the standard deduction for your filing status. Evaluate whether itemizing or taking the standard deduction will save you more on taxes.
Tips for Tracking Expenses
To maximize your deductions:
- Save all receipts for classroom-related purchases.
- Record the date, amount, and purpose of each expense.
- Ensure expenses meet the IRS’s eligibility criteria for either deduction.
Have questions about educator deductions or other tax-saving opportunities? Consult a tax professional for personalized guidance.