Financial Fitness for Teachers: Educator Tax Relief

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Most Americans are no stranger to teacher value and worth versus the actual benefits they receive for teaching our students. Most teachers would never leave their schools unless there were no other option. However, teachers are taking to part-time jobs and freelancing to make up for lost wages and out-of-pocket expenses attributed to shortened budgets. Why has the situation become so fierce? What are we doing to solve the problem? Legislatures are working on measures to increase tax breaks, extend current programs, and reinstate expired laws. A new tax relief bill was introduced in 2015, aimed at providing a little more deduction to teachers who cannot afford to teach.

H.R. 2940: Proposed Bill for Educator Tax Relief Act of 2015

The United States Congress (U.S. Congress) makes efforts to help teachers from every educational level and distinction (National Education Association (NEA)). Whether this means offering tax breaks, deductions, or credits, several new and cost-saving programs exist. But U.S. House of Representatives (U.S. House) Congressman Dave Reichert, R-Wash. Has introduced a new measure that will allow new tax relief for educators (NEA). H.R. 2940-Educator Tax Relief Act of 2015 would extend a 2002 measure passed by Congress. Allowing educators, a “$250 federal tax deduction for out-of-pocket expenses for instructional materials and classroom supplies” (NEA). These deductions expired at the close of 2013, removing all benefits the legislation allowed (NEA). 

Rep. Reichert introduced H.R. 2940 to the Ways and Means Committee for the 114th Congress (NEA). The bipartisan bill would declare the previous $250 educator tax deduction permanent, allow increases due to inflation, and “allow educators to deduct out-of-pocket expenditures for professional development as well as classroom materials and supplies” (NEA and H.R.2940, 2016). This bill would help thousands of teachers who must purchase classroom materials and supplemental teaching aids to replace the loss of textbook budgets (NEA). The National Education Association (NEA) stated: during the 2012-2013 school year, public school teachers spent approximately $1.6 billion of their own money on classroom supplies, according to the National School Supply and Equipment Association (NSSEA). A study by the NSSEA, an organization that represents retailers of classroom supplies, also found that 99.5 percent of all public school teachers spent some amount of out of pocket money for supplies for their students and classrooms. (NEA)

Reimbursing the teachers for spending their own money towards helping students and receiving advanced training stimulates the nation’s educational system during a time when budget downsizing neglects the nation’s students and schools.

Helping Teachers: Why do educators need the stimulus provided by tax benefits?

Most states have reduced proving support to teachers and schools (Leachman, Albares, Masterson, and Wallace). As a result of the Great Recession, schools report a significant decrease in budgets for textbook, supplies, and enrichment (Leachman, Albares, Masterson, and Wallace). In a 2015 report conducted by the Center for Budget and Policy Priorities (CBPP), researchers determined at least 31 states allocated less educational funding during the 2013-2014 academic year (Leachman, Albares, Masterson, and Wallace). Many of the state the cuts exceeded 10 percent (Leachman, Albares, Masterson, and Wallace). While the government isn’t interested in increasing the budget or even providing tools necessary for educational development, these students still must go to school and receive lessons from under supported teachers. How do teachers compensate for such lack of resources? They use their own money and creativity to make up for lack of basics such as textbooks, workbooks, and school supplies for the children (Leachman, Albares, Masterson, and Wallace).

The NEA believes it is for this very reason teachers need to be awarded more tax breaks and reimbursements from federal resources. Virtually all educators spend their own money on materials and supplies for their students. According to the National School Supply and Equipment Association (NSSEA), during the 2012-13 school year 99.5 percent of public school teachers dipped into their own pockets to help meet their students’ needs; collectively, they spent $1.6 billion on basic supplies such as pencils, glue, scissors, and facial tissues. Out-of-pocket expenditures averaged $485 nationwide and 10 percent spent $1,000 or more—double the percentage previously reported. (Kusler)

Simply put, teachers need the help provided by H.R. 2940. They cannot afford to spend the money required to teach their students. One teacher, Bruce Hogue, told ABC News reporters that he has to find creative methods to teach science with limited resources (Durand). Many of these creative projects require him to use his own money (Durand). Hague told ABC News “as a science teacher, I have an official budget, but that is usually gone by the beginning of the year. When I want to do a science lab, I usually pay for it all on my own.” (Durand). During the 1998-1999 academic school year, teachers spent about $448 of their own finances to supply classroom supplies (Durand). For more recent school years, teachers report spending nearly $1,000 on school related expenses.

The combined out-of-pocket and funded expenditures per teacher in the 2012-2013 school year were $945, with $268 going toward school supplies, $491 going for instructional materials, and $186 spent on other classroom supplies. (Nagel). Now a recent study conducted by the National School Supply and Equipment Association reported teachers’ pay for more than 70 percent of all classroom supplies (Durand).

On the other hand, teacher’s salary doesn’t equal the money they are spending. While teachers across the nation earn between $25,000 and $80,000 per year, experts agree the average pay range for teachers is much lower (Keirsz and Top Education Degrees). The average teacher pay in the U.S. is about $45,000 (PayScale Human Capital). This figure barely places a family of three over the federally regulated poverty line (Office of the Assistant Secretary for Planning and Evaluation). Because teachers are considered over the poverty line, they are not eligible for most state and federal welfare services or community assistance programs (Office of the Assistant Secretary for Planning and Evaluation). 

Making Education Costly: What are the current tax benefits for educators?

While teachers do earn less but spend more on school supplies and the government may haggle over tax breaks for the next 50 years, there are some current benefits allotted to educators. The Internal Revenue Service (IRS) does offer several deductions for educators (“Top 10 Tax Deductions You're NOT Taking”). Some of these tax benefits are specifically for educators, while others include creative loopholes designed to help everyone. Charity is the most common benefit neglected by teachers (“Top 10 Tax Deductions You're NOT Taking”). Teachers can deduct money spent on school functions – not classroom supplies – towards charity (“Top 10 Tax Deductions You're NOT Taking”). Most health premiums and deductibles are allowed under the IRS’ deductions schedule, along with medical costs, mortgage payments, etc. (“Top 10 Tax Deductions You're NOT Taking”). Teachers may benefit from teacher appreciation benefits. While teachers cannot deduct classroom expenses as charitable donations, they can deduct them as part of the teacher allotment (“Top 10 Tax Deductions You're NOT Taking”). Teachers also can deduct childcare expenses (i.e. services rendered during your work schedule) and financial planning services (“Top 10 Tax Deductions You're NOT Taking”).

Tax benefits are sweet, but they aren’t the only programs designed to help teachers. While federal, state, and local governments may have dropped the ball with school budgets, private corporations and non-profit organizations stepped up to take on the challenge. Teachers should choose to shop at specialized resource centers (Mossien). Some of the centers offer free or reduced cost school supplies, including basic materials, textbooks, and lab supplies (Mossien). With the increased social media usage, building a network of helpers is easy. Ask local community members, churches, and organizations to help with the supplies. Don’t ask for money as this is a red flag for potential scam (Mossien). Join a Yahoo Group or a Google+ community and post a request for the supplies you need. You can even use this group to promote your school supplies drive.

Works Cited

Durand, Maria F. “Teachers Spend Own Money for Supplies.” ABC News. 31 Aug. 2016 Web. 31 Aug. 2016. http://abcnews.go.com/US/story?id=95922.

Educator Tax Relief Act of 2015, H.R.2940, 114th Cong. (2015). Web. 31 Aug. 2016.  https://www.congress.gov/bill/114th-congress/house-bill/2940/text.

Keirsz, Andy. “Here's how much elementary school teachers make in each state.” Business Insider. 5 May 2015. Web. 31 Aug. 2016. http://www.businessinsider.com/elementary-school-teacher-salary-map-2015-5.

Kusler, Mary. “Letter to House Ways and Means Committee on the Educator Tax Relief Act of 2015 (H.R. 2940).” House Ways and Means Committee, 16 Sept. 2015. Web. 31 Aug. 2016. http://www.nea.org/home/63829.htm.

Leachman, Michael, Nick Albares, Kathleen Masterson, and Marlana Wallace. “Most States Have Cut School Funding, and Some Continue Cutting.” Center on Budget and Policy Priorities. 25 Jan. 2016. Web. 31 Aug. 2016. http://www.cbpp.org/research/state-budget-and-tax/most-states-have-cut-school-funding-and-some-continue-cutting.

Mossien, Kayla. “7 Ways to Get Free School Supplies.” Care.com. N.d. Web. 31 Aug. 2016. https://www.care.com/a/7-ways-to-get-free-school-supplies-1407161210.

Nagel, David. “K-12 Teachers Out of Pocket $1.6 Billion on Classroom Tools.” The Journal. 1 July 2013. Web. 31 Aug. 2016. https://thejournal.com/articles/2013/07/01/k12-teachers-out-of-pocket-1-point-6-billion-on-classroom-tools.aspx.

National Education Association (NEA). “Educator Tax Relief.” N.d. Web. 31 Aug. 2016. http://www.nea.org/home/16335.htm.

Office of the Assistant Secretary for Planning and Evaluation. “U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs.” U.S. Department of Health and Human Services. 25 Jan. 2016. Web. 31 Aug. 2016. https://aspe.hhs.gov/poverty-guidelines.

PayScale Human Capital. “Average Salary for All K-12 Teachers.” PayScale, Inc. 15 Aug. 2016. Web. 31 Aug. 2016. http://www.payscale.com/research/US/All_K-12_Teachers/Salary.

Top Education Degrees. “How Much Money Does an Average Teacher Make a Year?” N.d. Web. 31 Aug. 2016. http://www.topeducationdegrees.org/faq/how-much-money-does-an-average-teacher-make-a-year/.

TurboTax. “Top 10 Tax Deductions You're NOT Taking.” 2015 Tax Year. Web. 31 Aug. 2016. https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Deductions-and-Credits/Top-10-Tax-Deductions-You-re-NOT-Taking/INF19564.html.