Florentino Juarez

CARTOON ANALYSIS EDU 210

Professor Shkorupa
11
…Thank you for coming in for the audit and making
your first payment to us, Mr. Keebler…
However much we appreciate your diligence, I’m
afraid that tax reform still is not an individual choice…
so be ready to pay even more next time!
EDUCATOR EXPENSE DEDUCTION
If you're an eligible educator, you can deduct up to $250 ($500 if married
filing jointly and both spouses are eligible educators, but not more than $250
each) of unreimbursed trade or business expenses.
 You're an eligible educator if, for the tax year you're a kindergarten through grade 12 teacher, instructor,
counselor, principal or aide for at least 900 hours a school year in a school that provides elementary or
secondary education as determined under state law.

Qualified expenses:
 Professional development courses
 Books
 Supplies
 Supplementary materials
DIGGING INTO YOUR POCKETS
The National School Supply and Equipment Association (NSSEA)
conducted 2013 NSSEA Retail Market Awareness Study estimating that public
school teachers spent $3.2 billion in educational products in the 2012-2013
school year, $1.6 billion of it from their own pockets.
On average, teachers reported spending about $149 of their own money on
school supplies, $198 on instructional materials, and $138 on other classroom
materials for a total of $485 in the 2012-2013 school year.
 Pencils
 Pens
 Crayons
 Construction Paper
 Snacks
 Sometimes a pair of shoes (teachers in high-poverty schools spend more)
CRILE V. COMMISSION OF INTERNAL REVENUE
Background
 Susan Crile, a painter and printmaker who
teaches at Hunter College, was accused by
the I.R.S. of underpaying her taxes.
 From 1971 through 2013, court papers
said, she earned $667,902 from the sale
of 356 works of art — or an average
income of a little less than $16,000 per
year — and, like many artists, she wrote
off expenses from her work, like supplies,
travel and meals, on her taxes.
CRILE V. COMMISSION OF INTERNAL REVENUE
The Issue
 The I.R.S., which accused Ms. Crile of
underpaying her taxes by more than
$81,000 from 2004 to 2009, argued that
based on several factors, such as her lack
of a written business plan, her work as an
artist was “an activity not engaged in for
profit” and that she could not claim tax
deductions in excess of the income she
made from her art.
CRILE V. COMMISSION OF INTERNAL REVENUE
The Decision
 The Court’s decision in this case is a
win for struggling artists
everywhere. In finding that Crile
engaged in her art activity as a
distinct activity from her
employment as a professor, the
Court gave artists the opportunity
to take deductions for expenses
relating to their artwork as long as
they are engaged in that activity
for profit.
 Judge Albert G. Lauber of the tax
court ruled that Ms. Crile had “met
her burden of proving that in
carrying on her activity as an artist,
she had an actual and honest
objective of making a profit” and
therefore under tax law should be
considered a professional artist.
QUESTIONS?
SOURCES
Balingit, M. (2017, November 02). Teachers spend nearly $500 a year on supplies. Under the GOP tax bill,
they will no longer get a tax deduction. Retrieved September 17, 2018, from
https://www.washingtonpost.com/news/education/wp/2017/11/02/teachers-spend-
nearly-1000-a-year-on-supplies-under-the-gop-tax-bill-they-will-no-longer-get-a-tax-
deduction/?utm_term=.172769e1e272
Kennedy, R. (2017, December 21). Tax Court Ruling Is Seen as a Victory for Artists. Retrieved September 17,
2018, from https://www.nytimes.com/2014/10/07/arts/design/tax-court-ruling-is-seen-as-a-
victory-for-artists.html
NSSEA Study Finds Teachers Spend $1.6 Billion of Their Own Money on Educational Products for their
Classrooms. (2013, June 26). Retrieved September 17, 2018, from
https://www.prnewswire.com/news-releases/nssea-study-finds-teachers-spend-16-billion-of-their-
own-money-on-educational-products-for-their-classrooms-213139551.html
Tarsis, I., Esq. (2014, October 22). Case Review: Crile v. Commission of Internal Revenue. Retrieved
September 17, 2018, from https://itsartlaw.com/2014/10/21/case-review-crile-v- commission-of-
internal-revenue/
Topic No. 458 Educator Expense Deduction. (n.d.). Retrieved September 17, 2018, from
https://www.irs.gov/taxtopics/tc458