Author Topic: Deductions for Teachers - Business Expenses or Charitable Donations?  (Read 1000 times)

lchu

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(edited slightly for clarity regarding the type of school my wife works for -- a US city-government funded, not-for-profit school or "public" school)

Looking for some thoughts from the Moustache community on how to optimize our taxes this year when it comes to some expenditures that are associated with my wife's job as a public school music teacher in the US.

My wife is a music teacher in a not-for-profit, government-funded US public school and often fills the gaps in her work budget by purchasing items for her students to use from her own pocket- things like reeds, valve oil, mouthpieces, minor repair parts, etc.  These unreimbursed expenses total around $3-4K - well beyond the $250 Educator Expense deduction, but just shy of the "beyond 2% of your AGI" needed to deduct unreimbursed business expenses.

As I've been researching for this year's taxes, I stumbled on several articles recommending that parents who donate school supplies should ask the teacher to sign a letter acknowledging the receipt of those items so the donation can be deducted on their taxes.  And that made me start thinking...

We are technically donating newly purchased items to my wife's school-- would we be able to deduct these items as a charitable contributions? My wife (or an administrator at her school) would be able to provide a letter acknowledging the donation of the supplies and we have kept the receipts to document their market value.

Another possibility - She also teaches private music lessons (received a 1099 as an independent contractor from a local music store for 1.5K of income), so I assume that it's possible to claim some of these as business expenses on Schedule C and offset some of her income that way.

What potential liabilities am I missing?  Are there any rules in place that prevent my wife (or her spouse) from deducting a charitable donation to her public school of employment?  Or can anyone think of a better way or strategy for making these expenditures work for us instead of against us?

(Hope it goes without saying that I'm not looking for advice that says we should stop this spending outright-- my wife truly looks as this as our charitable spending for the year and the numbers you're seeing are an agreed-on, budgeted amount for that purpose.)
« Last Edit: March 11, 2017, 10:28:32 AM by lchu »

Livingthedream55

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Re: Deductions for Teachers - Business Expenses or Charitable Donations?
« Reply #1 on: March 09, 2017, 12:56:50 PM »
A public school is not a 501(c)(3) so it's not a charitable donation.



Goldielocks

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Re: Deductions for Teachers - Business Expenses or Charitable Donations?
« Reply #2 on: March 09, 2017, 04:51:12 PM »
Next year give to your PTA and have them buy the supplies and give you a receipt?  Our PAC here is a charity.

lchu

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Re: Deductions for Teachers - Business Expenses or Charitable Donations?
« Reply #3 on: March 11, 2017, 10:24:17 AM »
A public school is not a 501(c)(3) so it's not a charitable donation.

I was looking at TurboTax's guidelines when I posted this last month -- https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Are-Contributions-to-School-District-Programs-Tax-Deductible-/INF14346.html

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The IRS allows you to claim a deduction for the donations you make to qualified organizations. These organizations include more than just charities and will include any school district program that does not operate for profit and is solely supported by state and local governments.

I ended up calling TurboTax's consultation hotline and the guidance I received was that as long as I had both the receipts (to demonstrate market value) of the purchase and a receipt showing the date and value of the donated items, and that the items were not donated specifically for my wife's use, it would not likely create an issue.


Next year give to your PTA and have them buy the supplies and give you a receipt?  Our PAC here is a charity.

We tried that in the past -- unfortunately, the PTA didn't follow through (they decided that students would benefit more from a pizza party and spent the funds that way)...

Livingthedream55

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Re: Deductions for Teachers - Business Expenses or Charitable Donations?
« Reply #4 on: March 16, 2017, 12:29:15 PM »
A public school is not a 501(c)(3) so it's not a charitable donation.

I was looking at TurboTax's guidelines when I posted this last month -- https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Are-Contributions-to-School-District-Programs-Tax-Deductible-/INF14346.html

Quote
The IRS allows you to claim a deduction for the donations you make to qualified organizations. These organizations include more than just charities and will include any school district program that does not operate for profit and is solely supported by state and local governments.

I ended up calling TurboTax's consultation hotline and the guidance I received was that as long as I had both the receipts (to demonstrate market value) of the purchase and a receipt showing the date and value of the donated items, and that the items were not donated specifically for my wife's use, it would not likely create an issue.


Next year give to your PTA and have them buy the supplies and give you a receipt?  Our PAC here is a charity.

We tried that in the past -- unfortunately, the PTA didn't follow through (they decided that students would benefit more from a pizza party and spent the funds that way)...
Hmmmm - I never realized that - thanks for the info!



Tiger Stache

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Re: Deductions for Teachers - Business Expenses or Charitable Donations?
« Reply #5 on: March 22, 2017, 11:44:43 AM »
my wife's a teacher and we just do the $250 deduction and are done with it.