This week we salute three very special groups. Two get recognition all week, while the third gets honored the entire month. Teachers, nurses, and military members, we appreciate all you do for us! Your dedication, tireless hours, and personal sacrifice do not go unnoticed. We thought this would be a good time to make sure you have noticed how the recent Tax Cut and Jobs Act (TCJA) specifically applies to you.
Teachers were first recognized with a special day in 1953 when Eleanor Roosevelt persuaded Congress to declare a day in their honor. The next national day dedicated to teachers didn’t happen until 1980, but five years later the National PTA established the first full week of May as Teacher Appreciation Week and it has been celebrated ever since.
Educators have been allowed to deduct up to $250 of qualified expenses as an “above the line” deduction, using a line on the 1040 specifically for teachers. Even though a 2016 poll by educational publisher Scholastic found teachers spend an average of $530 of their own money on classroom materials, this deduction came under heavy fire during discussions prior to the passage of the TCJA. Fortunately, the final version of the bill kept the deduction in place.
To qualify, taxpayers must meet two requirements. First, they must work as a teacher, instructor, counselor, principal, or aide in a school serving kindergarten through twelfth grades. Second, they must work at least 900 hours in a school certified by the state. While this means teachers in private and religious schools will probably qualify, preschool workers, college instructors, and home-school teachers will not. For more information, see the IRS discussion of educator expenses.
The first national day honoring nurses was held in 1954, and the next few decades saw different days celebrating them. Soon after President Reagan declared May 6 National Nurses Day, the American Nurse Association extended the celebration to a full week, ending on Florence Nightingale’s birthday on May 12.
Unlike teachers, nurses do not have a specific deduction just for them. Nurses who are W2 employees at a single location (medical office, hospital, nursing home, etc.) will have the same impacts from the TCJA that apply to all taxpayers. (We have a document summarizing the new tax law here.)
Unfortunately, travel nurses may be negatively affected by the TCJA. Because Form 2106 – Employee Business Expenses – was eliminated, taxpayers can no longer deduct unreimbursed job expenses. Therefore, nurses who are used to taking deductions for mileage, hotels, meals, and other travel expenses will no longer have that option. Loss of Form 2106 also means no more deductions for license fees, professional dues, scrubs, etc. The elimination of job expenses is a huge change in the tax law and will be the topic of an upcoming blog. In the meantime, if your employer talks about implementing an accountable plan to reimburse some of these expenses, by all means encourage them to do so.
In 1999, Senator John McCain introduced legislation to designate May as National Military Appreciation Month. Honoring all who have served in any branch of the U.S. Armed Forces, May was chosen because it has several days dedicated to the military, including VE Day (May 8), Armed Forces Day (the third Saturday in May), and Memorial Day (the last Monday in May).
Members of the armed forces have traditionally benefited from a number of special provisions in the tax code. The IRS has a special section of its website dedicated to military tax issues, and their Military Family Benefits page has a great summary of specific tax benefits for service members. Because of the elimination of Form 2106, Reserve and Guard members who travel less than 100 miles for training will no longer be able to deduct their expenses. However, those who travel more than 100 miles get to keep their deduction. Also, though the TCJA eliminated the deduction for moving expenses for most taxpayers, active duty military who move due to permanent change of station orders can continue to deduct unreimbursed moving expenses.
Regardless of occupation, each taxpayer’s situation is unique and requires individual attention to ensure all tax laws are being followed and all applicable deductions and credits are being claimed. We’re happy to answer your specific questions; just give us a call. And as you see teachers, nurses, and members of the military this week, don’t forget to make sure you let them know how much they are appreciated!
