Teachers who pay for classroom supplies out of their own pocket can take a deduction on their tax return.  The first $250 of expenses are deductible

on the front side of Form 1040.  Expenses beyond $250 can be claimed as itemized deductions if the total of the expenses exceeds 2% of the taxpayer’s income.

But as a taxpayer learned in Tax Court on Monday, not every classroom expense qualifies for a deduction.  Candy, for example….

The taxpayer, a teacher in the Los Angeles school system, tried deducting candy that she purchased as classroom incentives for students.  She also tried deducting the cost of a U.S. savings bond.  The IRS said “no” to both deductions, and the Tax Court agreed.  From the Court ruling:

There is no evidence that the school required the purchase of the candy or the savings bond for petitioner’s students.  These expenses were not necessary to petitioner’s job; and no matter how well intentioned, gifts to students are not deductible as business expenses.  Petitioner also produced receipts for purchases of several audio players and testified that they “related” to her fifth grade classes.  However, petitioner did not explain how the purchase of the audio players for her students was related to the classes she was teaching, whether they were used in the classroom….

The candy wasn’t the only thing the IRS and the Tax Court took issue with.  The teacher also unsuccessfully tried to deduct, among other things:  the cost of a Mediterranean cruise, and a number of other items that were deemed to be personal expenses.  She was hit with detention in the form of more taxes owed, plus accuracy related penalties.

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”