If she is self-employed, she can deduct all of her expenses, there is no limit, like there is with w-2 employees. Or, did she receive a w-2 from the school for more than 900 hours? If she is a w-2 employee, the rule is, from Topic 458:
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 are deductible only to the extent the amount of such expenses exceed the following amounts for the tax year:
- The interest on series EE and I U.S. savings bonds that you exclude from income because you paid qualified higher education expenses,
- Any distribution from a qualified state tuition program that you exclude from income,
- Any tax-free withdrawals from your Coverdell education savings accounts,
- Any reimbursements you receive for expenses that aren't reported to you in box 1 of your Form W-2** **she can't deduct items reimbursed in box 1 of the w-2.
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