As mentioned earlier, starting in 2002 there is a new deduction of up to $250 for un-reimbursed classroom expenses for qualified educators. This deduction can be taken whether or not you itemize deductions on your tax return.

Prior to 2002 these expenses could only be taken as a miscellaneous itemized deduction when the total miscellaneous expenses exceeded 2% of your adjusted gross income.

Who is Eligible?
To be eligible for the deduction you must meet the following requirements;

1. You are a teacher, instructor, counselor, principal or aide in grades kindergarten through 12th grade.

2. You work at least 900 hours during the school year in a state qualified elementary or secondary school.

What Expenses are Eligible?
The following un-reimbursed expenses are eligible for the deduction.

To qualify the expenses must also be more than the following items if you excluded them from your income:

• any interest on qualified U.S. savings bonds that were used to pay for higher education expenses
• any distribution from a qualified tuition program
• any tax-free withdrawals from an Education IRA (Coverdell education savings account).