For much too long, Congress engaged in an annual ritual of waiting until the last minute to extend some four dozen tax benefits that have to be renewed virtually every year, including many that NEA members have come to rely on.
In the waning days of 2015, however, Congress surprisingly came together on a compromise tax bill that made many of these deductions and credits permanent, retroactive to the beginning of the 2015 tax year.
The tax extender bill passed in the final days of 2014 covered only the 2014 tax year retroactively. The new legislation, in principle, extends the benefits indefinitely, starting with the 2015 tax year. This includes both the $250 above-the-line deduction for classroom supplies and the tuition and fees deduction—both of special interest to educators.
The $250 deduction is particularly advantageous because it is an above-the-line deduction on Schedule A, which means you don’t have itemize to take it and it reduces your overall adjusted gross income (AGI). The new legislation indexes the amount to inflation and allows professional development expenses to be included in the deduction.