Tax Topics for NC Educators Each year many NCAE members ask how to deduct the dues they pay to NCAE/NEA and the local on their tax return, as well as how to calculate the deductible amount. Association dues paid by educators to NEA and your local associations are fully includable with other types of deductions as miscellaneous itemized deductions. The tax deduction for association dues paid by educators to NCAE is required to be reduced by an amount calculated each year related to NCAE’s political activities. Even though these political activities are a vital function of NCAE for its members, the tax laws require the dues tax deduction be reduced for professional associations that engage in lobbying activities on behalf of its members. NCAE’s external auditors have calculated that for 2013, the tax deduction claimed for NCAE dues paid by educators must be reduced by 10 percent. The miscellaneous itemized deductions for NEA, NCAE and local association dues are added to other miscellaneous itemized deductions and shown as itemized deductions on Schedule A of the tax return. The total of these miscellaneous itemized deductions are tax deductible to the extent they exceed 2 percent of your adjusted gross income. Please be aware that NCAE/NEA/Local dues are collected from paychecks or from your checking account or credit card (EFT) based on the school year, but for IRS tax deduction purposes, the amount that was deducted from your paycheck, checking account, credit card or paid by check during the calendar year of 2013 (irrespective of which school year it
applies) is figured into the tax deduction on your 2013 tax return. Contributions to the North Carolina Foundation for Public School Children (the NCAE Foundation) are fully tax deductible as charitable contributions if you itemize your deductions. $250 Out-of Pocket Classroom Expenses Are Tax Deductible Under the IRS rules, if you are an eligible educator, you can deduct up to $250 of any unreimbursed expenses paid or incurred for books, supplies, computer equipment, other equipment, and supplementary materials used in the classroom; these expenses must be paid or incurred during the tax year. If your spouse has qualified out-of-pocket educator expenses and you file jointly, you can claim up to $500. The best part? This is an above-the-line deduction, meaning that you can take the deduction even if you do not itemize. Of course, if you itemize, you can also claim job-related expenses above the $250 limit on a Schedule A, subject to the 2 percent rule (the 2 percent rule means that you can only deduct expenses which are in excess of 2 percent of your adjusted gross income). But no double-dipping! You can’t claim the same expense in both places. The same rules for record-keeping apply to educator expenses as with most deductions, so keep excellent receipts. Eligible educators are defined as teachers, instructors, counselors, principals or aides for kindergarten through grade 12. To be eligible, you must work at least 900 hours a school year in a school that provides elementary or secondary education, as determined under state law. Please consult your professional tax advisor to see how this information affects your personal tax situation. Tom Herbert, NCAE Business Office manager
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that eliminate the rights of teachers who were in the process of earning career status. The lawsuit was filed in Wake County Superior Court on December 17, 2013. The State recently filed a motion to dismiss the lawsuit, and NCAE attorneys are preparing to respond to the motion.
NCAE Takes Legal Action Against State for Career Status and Voucher Laws
Voucher Litigation On December 11, 2013, 25 plaintiffs filed suit against the State of North Carolina to challenge the voucher law passed by the General Assembly last session. If implemented, the voucher program will divert $10 million dollars from public schools by using taxpayer dollars to send students to private schools. There is no evidence to support that private schools provide a better education than traditional public schools. NCAE believes that the voucher program is bad policy and that it violates a North Carolina constitutional provision requiring that state school funds be faithfully appropriated and used exclusively for establishing and maintaining a uniform system of free public schools. Accordingly, the plaintiffs have filed a motion for a preliminary injunction to stop the program before it starts. For additional information on NCAE’s career status and voucher lawsuits, visit http:// www.ncae.org/whats-new/north-carolinians-challenge-unconstitutional-voucher-legislation/ and http://www.ncae.org/whats-new/ncae-files-lawsuit-against-career-status-law/ or contact NCAE Legal at 1-855-ASK-NCAE. Check the NCAE Web site, www.ncae.org, for additional updates as the cases progress in court.
Published on Jan 31, 2014