Each state has its own requirements for both teacher certification and renewals. Generally, renewing your teaching credential involves taking continuing education classes as well as paying a fee to the state licensing board or department of education. The good news is that both expenses are tax-deductible, subject to a few rules and restrictions. The IRS doesn't make this easy.
Business Expense Deductions
The IRS lets you deduct any business-related expense that is not reimbursed by your school or other employer. As long as your certificate is required to get or maintain your job, the full cost is deductible. The caveat is that you can only deduct the amount that is greater than 2 percent of your adjusted gross income, and you must itemize your deductions on Schedule A of Form 1040. If you have other unreimbursed expenses, you may meet the threshold, but generally the cost of the renewal itself won't meet the minimum. You'll need to include your other job-related expenses such as classroom supplies, union dues, and continuing education courses to have a chance of surpassing the 2 percent threshold.
If renewing your teaching certificate requires continuing educational credits, you can deduct the cost of the courses as education credits, or as business deductions, depending on where you took the classes and whether you itemize your deductions. This can also help you meet that 2 percent minimum. If you take courses at a college or university, you may qualify for the Lifetime Learning Credit of up to $2,000 per tax year or Tuition and Fees Deduction of up to $4,000 per return. These amounts are not subject to the two percent minimum. Courses that are not eligible for those credits can still be claimed as unreimbursed business expense, because the education is required to maintain your current job. You may not deduct the cost of courses designed to qualify you either for a new job or a promotion that requires additional skills.
Which Deductions to Take
Unfortunately, the IRS simply doesn't allow you to take both an education credit and a business deduction for the same course. Choose the method that saves you more. Using tax prep software makes comparing deductions fairly simple. The software prompts you for details about your expenses and can help you determine the most advantageous way to take the deductions.
Which Forms to File
To deduction unreimbursed business expenses you'll need to file Form 1040 and Schedule A. Keep in mind that unless the total of itemized deductions exceeds the standard deduction for your filing status—currently $5,800 for single taxpayers and $11,600 for married filing jointly—you won't get any benefit from itemizing. The Tuition and Fees deduction is an adjustment to income on line 34 of Form 1040. You'll need to fill in Form 8917. For the Lifetime Learning Credit, use Form 8863. The amount of the credit is subtracted directly off your tax liability, rather than as a deduction from taxable income, saving you even more money.
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