News & Press Releases

Tax Break

by Lori Higgins

Hattie Peraino is a step ahead of the Internal Revenue Service.

In an envelope labeled "school supplies," the veteran first-grade teacher keeps dozens of receipts of materials she has purchased with her own money. By her calculations, the expenses add up to about $600 each school year.

The IRS advises teachers to keep records of their out-of-pocket expenses this year. Recent federal legislation gives teachers a tax break by allowing them to subtract up to $250 in expenses when figuring their adjusted gross income.

The tax break applies for the 2002 and 2003 tax years.

Peraino buys a lot of books for her classroom library that she can use to read stories to the class and students can borrow. She also buys tapes for a listening center she has created in the classroom.

The fact that teachers spend their own money on classroom materials is nothing new. A 1996 study by the National Education Association found the average teacher spent $406 of their own money annually.

But before now, teachers had a difficult time being reimbursed, said Sarah Wreford, spokeswoman for the IRS for Michigan. They could only deduct the expenses if they filed itemized tax returns, and only then if their expenses were at least 2 percent of their adjusted gross income. If that income figure was $40,000, they would need to have spent $800 on school supplies to get the deduction, Wreford said.

"It's the right thing to do," Wreford said of the new legislation. "Teachers have been coming out of their pockets for years to pay for this stuff."

The federal legislation was approved in March. Similar legislation was introduced in April in the Michigan Legislature. It would allow for a tax credit of up to $350 for classroom supplies purchased by public school teachers.

Both are a way to give teachers some relief, said Linda Myers, a former Spanish and French teacher who's now a lobbyist with the Michigan Education Association, a state teachers union. When Myers was teaching, she often bought small games that students could use to practice their vocabulary.

"You see things you'd like to do in the classroom, especially now when districts are tightening their budgets," she said. "Our teachers want their kids to excel and if it will help, they will spend their own money."


The federal rules apply to teachers, counselors, principals and aides who work at least 900 hours during a school year in public and private elementary and secondary
schools.

Peraino and other teachers say they buy items to enhance lessons and add materials that go beyond what the school provides. It includes materials to spice up a bulletin board or storage equipment.

Sometimes, teachers dip into their pockets to help needy children whose families can't afford items like crayons and scissors that schools put on supply lists for parents to purchase.

"I never want those kids to feel left out," said Marla Gartner, a first-grade teacher at Ealy Elementary School in the West Bloomfield School District.

She spends $500 to $600 a year on supplies. Some goes toward materials that supplement lessons. When the weather is hot, she might buy popsicles as a treat. And she has a treasure box of goodies: If students earn 10 stars for good behavior, they get a trip to the box for items such as sidewalk chalk, key chains and coin purses.

"It's those extras that make learning really fun and add that extra quality to the class," Gartner said.

More information on the tax changes is available at www.irs.gov. Search for Publication 3991.