The 1040A: (4) New Adjustment categories

Adjustments are deductions for expenses you incurred during the year, that qualify to be deducted from your Total Income. This is where the term “Adjusted Gross Income” comes from. Four Adjustment categories have been added to the form 1040A form you might qualify for.


Educator Expenses is an up to $250 Adjustment deduction for teachers, defined by the IRS as an Eligible Educator. It is a deduction for unreimbursed ordinary and necessary expenses you paid in the tax year, related to your educator duties. An Eligible Educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide – who worked in a school for at least 900 hours during the school year. That works out to be about 23 weeks based on a 40-hr/week job as an Educator. If both spouses are Educators and use the Married Filing Jointly filing status, both can take the $250 deduction for a total of $500 for this Adjustment.  The expenses are:

  • The cost of professional development courses you have taken related to the curriculum you teach or to the students you teach.
  • In connection with books, supplies, equipment (including computer equipment, software, and services), and other materials purchased to be used in your classroom – that you were not reimbursed for.

The Educator Expenses deduction is listed on line 16 of the form 1040A.


IRA Deduction is an up to $5,500 per year Adjustment deduction you can take if you contributed that sum to a traditional IRA (Individual Retirement Arrangement). That deduction value rises to $6,500 per year if you are age 50 or older. Once you turn age 70 1/2, you can no longer contribute to a traditional IRA account. Each spouse can contribute the full $5,500 or $6,500 amount for their own IRA account, depending on their respective ages. This then gives the Married Filing Jointly couple a double benefit from the IRA Adjustment deduction.

A traditional IRA is called a tax-advantaged retirement plan, because you benefit from a tax deduction now, while at the same time the earnings accruing in the account – are not taxable until you take distributions during your retirement. Banks and brokerages can help you setup your traditional IRA account into which these contributions are deposited. You have to make the deposit into the IRA account by the due date of the tax return year you are filing, on which you are claiming the IRA deduction. That is usually April 15th of the following year. For example, the 2016 year tax returns were due on April 18th, 2017. Your IRA contribution, to count on your 2016 tax return, had to be deposited by April 18th, 2017.

If you have a retirement account at your job, like a 401(k) plan, and you and your company made contributions into that 401(K) plan, your allowable traditional IRA contribution amount may be limited if your salary is high enough. The IRS provides a worksheet to calculate the limitation, that is also built into all the tax software. See on page 17 of Publication 590A – Contributions to IRAs.

The IRA Contribution deduction is listed on line 17 of the form 1040A.


Student Loan Interest is an up to $2,500 Adjustment deduction available to taxpayers who are personally liable to repay the student loan amount. The loan must be for qualified higher education expenses including tuition, fees, room and board, and related expenses such as books and supplies. Eligible institutions include most colleges, universities, and certain vocational schools. Married couples can only take the $2,500 deduction, not $2,500 each. You should receive a form 1098-E from the Bank or Government Agency that holds your loan, that list the amount of Student Loan Interest you paid for that tax year. Click form 1098-E for the form.

Once your modified Adjusted Gross Income rises above a certain level, the deduction begins to phase out, and is not allowed above a threshold level. These are:

  • Single, Head of Household, Qualifying Widow(er) filing status:
    • above $65,000 the deduction begins to phase out
    • above $80,000 the deduction is no longer allowed
  • Married Filing Jointly filing status:
    • above $130,000 the deduction begins to phase out
    • above $160,000 the deduction is no longer allowed
  • Married Filing Separately
    • The deduction is not allowed at any income level, because Congress wrote this restriction into the Law. Many credits and deductions are not allowed when you file as Married Filing Separately.

The Student Loan Interest deduction is listed on line 18 of the form 1040A.


Tuition and Fees is an up to $4,000 Adjustment deduction you can take if you had up to $4,000 of qualified Tuition and Fee payments for the tax year. The same income phaseout limits apply, as were the case with the Student Loan Interest deduction. You also cannot take this Adjustment if you take any of the other two Education Credits, which will be explained in a later blog post. Those are the American Opportunity Credit and the Lifetime Learning Credit. All tax software will optimize your situation, to recommend which of the three Education Adjustment and Credits – will give you the best tax benefit. You will receive a form 1098-T from the Education Institution, that list the amount of Tuition and Fees you paid for that tax year. Click form 1098-T for the form.

Once your modified Adjusted Gross Income rises above a certain level, the deduction begins to phase out, and is not allowed above a threshold level. These are:

  • Single, Head of Household, Qualifying Widow(er) filing status:
    • below $65,000 the deduction is $4,000
    • between $65,000 and $80,000 the deduction is $2,000
    • above $80,000 the deduction is no longer allowed
  • Married Filing Jointly filing status:
    • below $130,000 the deduction is $4,000
    • between $130,000 and $160,000 the deduction is $2,000
    • above $160,000 the deduction is no longer allowed
  • Married Filing Separately
    • The deduction is not allowed at any income level.

Click form 8917 – Tuition & Fees deduction for the form and instructions used to calculate the credit. The Tuition and Fees deduction is listed on line 19 of the form 1040A.


The (4) Adjustments are added together and listed on line 20 of the 1040A, which is called your Total Adjustments. This line 20 value is then subtracted from your line 15 Total Income value, to generate your Adjusted Gross Income value shown on line 21 of the form 1040A.


Click the link below for the next Blog post to learn about the Standard Deduction, and bonus amounts that can be added to the Standard Deduction for taxpayers over the age of 65 and/or blind.

The 1040A: The Standard Deduction


Feel free to comment on these blog posts, or send me an email at Mike@TaxesAreEasy.com

Blog Written Content ©2017 Michael D Meyer. All rights reserved.

PDF IRS forms, instructions & publications – ©2017 Department of the Treasury Internal Revenue Service IRS.gov


Legal Disclaimer: Nothing written or expressed in this Blog shall be construed as legal, accounting, or tax advice. This Blog is for informational purposes only, to inform Individuals about the IRS tax forms required to file an individual tax return, and the instructions that accompany such IRS tax forms.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any tax transaction or filing any tax form.

Leave a Reply