Around tax time a lot of homeschooling parents begin to wonder whether or not there is any way in which they can write off homeschool expenses in their taxes.
In most states a homeschool cannot be ran as a business or a non-profit organization as you do not charge your child money in order to be educated. Furthermore, you do not provide any services to anyone in your community outside of your own family. Thus, you have no intention of making a profit, so the IRS looks at homeschooling like it is a hobby.
Your relatives also cannot write off donations of money or educational supplies to your homeschool on their taxes. Of course, if your spouse wants to increase his or her child support payments to help you with your homeschooling costs they can write this off on their taxes but be sure that you account for it on your own taxes.
Of course, you can always start another type of educational business (i.e. a tutoring service or a private school) and thus you would then fall under the tax rules for such businesses. However, you still would not be able to write off any expenses that were not incurred for the products that you are selling to your clients.
Simply stated, there is no way that you can contribute to your own child’s education and receive a tax deduction for it. This is how it also is if you choose to send your child to a private school.
IRS rules clearly state that you cannot write off any educational materials that do not directly relate to your job. They state that educational costs incurred from homeschooling or from sending your child to a private school are “nondeductible personal, living, or family expenses” (Publication 529, Miscellaneous Deductions).
There is a way in which you can put some money aside for homeschooling though. You could open up a $2,500 tax-deductible account. This account can be sheltered for homeschool expenses. However, you would have to start planning this type of an account when your children are still quite small.
If you live in Minnesota you luck out though. This is because according to a decision made by the “Minnesota Department of Revenue: Apply Cost of School Supplies to Education Credit” on August 9, 2000 you can deduct from your state taxes any homeschool materials that you have saved receipts for. Under this law, anything that a school requires a child to have is covered (i.e. pencils and paper). It is debatable as to whether or not things like microscopes or family memberships at a local museum would be covered. Only a CPA would be able to tell you specifically what is covered. For those people who live in states other than Minnesota, who would like to have these same benefits, will need to create a grass roots support group to put forth pressure upon their state’s government to create a law similar to the one in Minnesota.
While this tax credit may sound great to you, there are some things that you should consider: Is this tax credit worth enough to offset the invasion into your privacy? Do you need the tax credit so bad that you are willing to tell the state what you have been purchasing to educate your child? In reality, the most you are going to save is about $35. This money is not even enough to purchase a good textbook anymore. Thus, is your freedom really worth this money?
If you are thinking that you simply are not getting your money’s worth out of your taxes, you should stop and think for a moment. Don’t you think that you get more use out of some things that your tax money pays for than average families do? For instance, most homeschoolers use the library quite heavily. There are also local and regional parks that homeschoolers tend to spend more time at than the average family. If you are a “carschooler” than you probably use more highway taxes than other families too.