Are Homeschool Expenses Tax Deductible? Learn About What, If Any, Homeschool Expenses Can Be Written Off As Tax Deductions Or Credits
The simple answer is no, homeschool is not tax-deductible except in Illinois, Louisiana, and Minnesota. Homeschools in most states cannot be run as a business nor even as a non-profit as you do not charge your own children for their education, and you provide no community service to others than your own family. Your intent is not to make a profit, which is the rule-of-thumb for the IRS regarding home businesses. It is more like a hobby or paying for piano lessons. You are not under the control of a board of directors, unless you go to a lot of trouble to form a non-profit association. You’d probably have problems being allowed to do this for a homeschool.
More in-depth information:
|Homeschool tax deductions||State tax deductions||Tax shelter|
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Homeschool Tax Deductions
No, donations of money or homeschool supply expenses may not be written off as tax-deductible.
I was asked if homeschooling could be regarded as a hobby, thus considering it a hobby deduction and approving it as a homeschool tax credit. This would be tough as the IRS regulations say you can only deduct up to the amount of income you make from the hobby.
Saying that you can start ANOTHER kind of educational business, such as a tutoring service, in which case you would fall under tutoring laws and not homeschooling laws. You can start a private school, and thereby fall under THOSE laws. However, you still can’t write off any home education expenses but those incurred in support of paying customers. You may hire your children to do real work related to your business. Product testing and writing product reviews for your website is a real popular job!
You cannot contribute to your own child’s K12 education and get any homeschool tax deduction for it, no more than if you sent him to a private school and tried to write off the tuition. IRS regulations are pretty clear that you can only write off educational expenses that apply to post-high school expenses. The IRS states:
“For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses, earlier). The student must have either a high school diploma or a General Educational Development (GED) credential.“
You may take a charity donation tax deduction for donations to 501(3)(C) non-profit homeschool organizations. Most state-wide homeschool associations have that designation, but check first. Most local homeschool support groups do not, but a few may.
If you donate used curriculum to a non-profit, such as your local library, and carefully record the value of the donation, you may take this as a material donation to a charitable organization. Get a receipt.
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For use in preparing US tax Returns. New form for Returns.
State Tax Deductions
Currently, there are only three states that allow for homeschool deductions or credits.
“Deductions For School Tuition, Home School Educational Expenses, And Public School Educational Expenses”
“You may qualify for the Minnesota K-12 Education Subtraction and Credit if you home school your children. To qualify, your expenses must be required as part of a normal school day for subjects usually taught in public school grades K-12.”
“Education Expense Credit General Rules and Requirements for Home Schools”
If you want the same benefits in your state, you’ll have to get some grassroots support for a law like Minnesota’s or Louisiana’s. Note that the law is for ANY parent purchasing educational material for their children. I do not know exactly what constitutes “required expenses” under this law. My guess is that it is for only those items that schools require their families to purchase. It may only include materials such as pencils and paper, and not include something like a backpack. It may include a new microscope, and then again it may not. Does family membership in a local museum count? Most likely only a membership for children MIGHT count, and then, maybe such a membership is not considered a “school supply.” Only a CPA can answer these questions for you.
Is the tax credit great enough to offset the invasion into your privacy? Do you need the tax credit badly enough to tell the state what you have been buying to educate your child with? What if someone “up there” doesn’t approve of your expenditures? Just something to consider. I hear that the deduction may result in tax payers paying about $35 less in taxes. Less than the price of one good math book these days. How much is your freedom worth?
I often ask homeschoolers if maybe they don’t think they get MORE use out of some things their tax dollars go for than average families. Most will admit to being heavy users of the public library and the local and regional parks. “Carschoolers” joke about probably using up more highway taxes than most!
Other Homeschool Tax Resources
The simple answer is “No; there are no tax credits for homeschool expenses from the federal government.” The longer answer is “Maybe, depending on what state you live in.”