The IRS on Friday issued IR-2004-124, reminding elementary and secondary school teachers, counselors, principals and teacher’s aides that the Working Families Tax Relief Act of 2004 retroactively reinstated the $250 educator expense deduction, which had expired at the end of last year, for expenses incurred anytime in 2004 (and applies to 2005 expenses as well). The $250 expenses are taken as an adjustment to AGI and thus reduce a teacher’s tax liability even if they do not itemize their deductions.
Tax Act Retroactively Reinstates $250 Teacher Deduction
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