Deduction Confusion: What I Missed (and What Teachers Need to Know)
I still believe the OBBBA is awful
In my previous blog post addressing changes to the Educator’s Deduction I got one piece of it completely wrong. It turns out the above-the-line Educator Deduction is NOT going away.
After reading several articles1 I understood (or at least I thought I did) that the Educator’s Deduction was being expanded, but only for those who itemize. Given most educators do not itemize, it seems like a very dirty thing to do. I even opined about it on a podcast.
That’s not embarrassing.
When I make a mistake (something I wish I could say happens rarely…), I own up to it.
I screwed this one up.
Here’s the real scoop from a reliable source so you don’t have to take my word for it.
According to the good folks at Milliken Perkins:
“But the OBBBA creates a new miscellaneous itemized deduction for educator expenses. This is in addition to the $300 above-the-line deduction. And this deduction isn’t subject to the 2% of AGI floor or a specific dollar limit. The new deduction is available for eligible expenses incurred after Dec. 31, 2025.”
The above-the-line educator deduction is NOT going away. I repeat, the above-the-line educator deduction is NOT going away.
A new deduction in ADDITION to the above-the-line deduction is being added. It’s unlikely most educators will be able to take advantage of it, but some will and for that reason they should keep track of all money spent in the classroom. See Milliken Perkin’s blog post for more details.
I hate making mistakes, but when you write and speak as much as I do, it’s bound to happen. I appreciate my colleagues reaching out to correct me and I will do better in the future.
Scott Dauenhauer, CFP, MPAS
This was the article I read and phrasing“Beginning in 2026, the deduction becomes an itemized deduction on Schedule A, and the $300 cap is removed. However, filers using the standard deduction will lose eligibility for the deduction starting in 2026."