Homeschooling can be expensive! Between curriculum, books, supplies, and activities, the costs can really add up. You might be wondering if there are any ways to save money on your taxes when you homeschool.
It can be confusing to figure out, especially since the federal government doesn't offer any tax deductions specifically for homeschooling expenses.
Many parents find themselves asking questions like:
Can I deduct the cost of my child's curriculum?
Are there any tax credits for homeschooling families?
How can I save money on my taxes while homeschooling?
This blog is your guide to understanding homeschool and taxes. We'll explore the different ways you can potentially save money and reduce your tax burden.
We'll also provide you with some helpful tips for keeping track of your homeschooling expenses and making sure you are following the tax rules.
Homeschooling families often wonder how their choice affects their federal taxes. Understanding the basics can help you plan better.
Homeschooling and Federal Taxes: What You Need to Know
Taxes can be confusing, especially when you're homeschooling. You might be wondering if you can get any money back on your taxes for the money you spend on homeschooling. Many people wonder about this! Sadly, you can't get money back on your federal taxes for homeschooling expenses.
Why No Deductions?
Not a School:Â The IRS (the government agency that collects taxes) doesn't see homeschooling as a school. They have a specific definition of what a school is, and homeschooling doesn't fit that definition.
Personal Expenses:Â This means the IRS sees homeschooling expenses, like books and curriculum, as personal expenses. It's similar to buying groceries or clothes for your family. These are things you need, but they don't change your taxes.
No Tax Breaks:Â Usually, you can't deduct personal expenses from your taxes. This means you can't subtract the money you spend on homeschooling from your total income when you file your taxes.
If you're looking for creative and effective ways to make the most of your homeschooling budget, especially for younger learners, check out our guide on Preschool Education Lesson Plans: A Guide to Effective Preschool Activities. It offers helpful ideas to enhance your child's learning experience without adding extra costs.
What About Tax Credits?
No Credits Either:Â There are some tax credits for education, like the American Opportunity Tax Credit and the Lifetime Learning Credit. However, these are only for students who attend regular schools (like public or private schools). Homeschoolers can't use these credits.
Important Note
Stay updated:Â The laws about taxes and homeschooling could change in the future. It's a good idea to stay updated on any new laws that might affect you. You can check the IRS website or talk to a tax professional for the latest information.
Even though you can't deduct homeschooling expenses from your federal taxes, there might be other ways to save money. You can look for used curriculum materials or join homeschool co-ops to share resources with other families. You can also take advantage of free resources like libraries and museums.
If you're looking for other ways to ease the financial load of homeschooling, grants and financial aid could be helpful options. Check out this blog on Homeschool Grants: Where to Find Funding and Financial Aid to explore available resources.
While federal tax laws may not offer much for homeschoolers, some states provide helpful tax breaks.
Are There Any State Tax Breaks For Homeschooling?
While you can't get any money back on your federal taxes for homeschooling, some states offer tax breaks for homeschooling families. This means you might be able to save money on your state taxes! It's like getting a discount on your homeschooling expenses.
State Tax Breaks
Different In Every State:Â Each state has its own rules about taxes and homeschooling. Some states offer tax credits, which means you can get money back on your taxes, like a refund.
Other states offer tax deductions, which means you can subtract some of your homeschooling expenses from your income before you calculate your taxes. That means you pay less in taxes overall.
Check Your State:Â It's important to check the rules for your state to see if you can get any tax breaks for homeschooling. You can usually find this information on your state's Department of Revenue website or by contacting them directly.
Examples of State Tax Breaks
Minnesota
You can get money back on your taxes for 75%Â of your homeschooling expenses, up to $1,500 per child. This can really add up and help with the cost of books, curriculum, and other materials.
You can also subtract some of your homeschooling expenses from your income before you calculate your taxes. This is another way to reduce your tax bill.
Indiana
You can subtract up to $1,000Â per child from your income for homeschooling expenses. This can help lower your taxable income and save you money.
Louisiana
You can subtract 50%Â of your homeschooling expenses from your income, up to $5,000 per child. However, you need to get approval from the State Board of Elementary and Secondary Education first. This is a great option if you have high homeschooling expenses.
Illinois
You can get 25%Â back on your taxes for homeschooling expenses over $250, up to $750 per family. This can be helpful for families with multiple children who are homeschooling.
Colorado
Taxpayers can receive a credit of $500Â for at-home instruction of more than 80 but less than 160 days. For at-home instruction of at least 160 days during the tax year, the credit increases to $1,000.
Oklahoma
Under this program, families who homeschool can receive a refundable tax credit of up to $1,000Â per student for qualified educational expenses. That includes curriculum and tutoring costs.
These are just a few examples, and the rules vary from state to state. Be sure to check the specific requirements for your state!
By taking advantage of state tax breaks, you can help reduce the cost of homeschooling and make it more affordable for your family.
Want a homeschool curriculum that's as special as your child?
The School House Anywhere (TSHA)Â offers a different way of teaching called the American Emergent Curriculum (AEC). It's all about making learning fun and exciting so kids will be curious, creative, and love to learn!
Here's what makes the AEC special:
Child-Centered Learning:Â The AEC follows your child's lead, focusing on what they're interested in and what they need to learn. This means you can create a learning experience that is truly special for your child, where they get to explore the things they love and are curious about.
Hands-On Exploration:Â The AEC is packed with activities and projects that let your child learn by doing things, not just by reading or listening. They'll get to build things, create art, do experiments, and explore the world around them in a fun and exciting way.
Interconnected Learning:Â The AEC combines different subjects, like math and science, into one big learning adventure. This helps children see how everything is connected and makes learning more interesting and meaningful.
Real-World Connections:Â The AEC brings learning to life by connecting it to things your child already knows and experiences. This might involve cooking a recipe to learn about fractions or building a birdhouse to understand measurement. It could also include writing a letter to a friend to practice writing skills.
Ready to give your child a learning experience they'll love?
If your child has special education needs, there might be additional tax benefits to consider.
Taxes Deductions For Special Education Expenses
If your child has special needs and you are homeschooling them, you might be able to deduct some of your homeschooling expenses from your taxes. This means you might get some money back or have to pay less in taxes!
What Expenses Can Be Deducted?
Helping With Disabilities:Â You can deduct expenses that help your child with their disability. This might include things like:
Tutoring from a special education teacher who can provide specialized instruction
Special curriculum or programs designed for children with learning differences
Meals, lodging, and transportation if they are part of the special education program, such as attending a special needs school or therapy sessions
Doctor's Note:Â You will need a doctor's note that says your child needs special education. This note should explain your child's diagnosis and why they need these specific services.
How Much Can Be Deducted?
7.5% rule:Â You can only deduct the amount of your special education expenses that is more than 7.5%Â of your adjusted gross income (AGI). Your AGI is your total income minus certain deductions. Think of it like this: you can only deduct the amount that goes above a certain threshold.
Example:Â If your AGI is $50,000, you can only deduct the amount of your special education expenses that is more than $3,750 (7.5% of $50,000). So, if your expenses were $5,000, you could deduct $1,250.
What About Homeschooling?
Homeschooling Counts:Â If you are homeschooling your child with special needs, you might be able to deduct some of your homeschooling expenses, such as:
Tutoring to help your child with specific subjects or skills
Curriculum designed for children with special needs
Therapies like speech therapy or occupational therapy to help your child improve their communication or motor skills
Doctor's Note:Â You will need a doctor's note that says your child needs these services. The doctor's note should explain how these services relate to your child's disability.
Important Notes
Keep Good Records:Â Keep all your receipts and records of your expenses. You will need these if you are audited by the IRS. This includes things like receipts for curriculum, tutoring fees, and therapy bills.
Get Help If You Need It:Â If you have questions about deducting special education expenses, talk to a tax professional. They can help you understand the rules and make sure you are claiming all the deductions you are entitled to.
By understanding the rules and keeping good records, you can take advantage of tax deductions for your child's special education expenses.
Want to keep track of your child's learning in a fun and easy way?
Transparent Classroom, a tool by The School House Anywhere (TSHA), can help! It lets you record assignments, track grades, and create beautiful portfolios of your child's work.
Planning ahead is key for homeschooling families, especially when it comes to education savings.
Saving For College (and K-12): 529 Plans
529 plans are a special way to save money for education. It's like a piggy bank that helps you pay for college or even some K-12 expenses! They can be a great way to plan for your child's future.
How 529 Plans Work
Save For The Future: You put money into a 529 plan, and the money grows over time. It’s a classic example of the compound effect! The longer you save, the more money you'll have.
Tax Benefits:Â You don't have to pay taxes on the money when you take it out to pay for education. This means you get to keep more of your money!
College and K-12:Â You can use the money for college expenses, like tuition, room and board, and books. Now, you can also use up to $10,000 per year for K-12 tuition at private schools.
Homeschooling and 529 Plans
Limited Use:Â You can't use 529 plan money for most homeschooling expenses, like books, computers, or supplies. You can only use it for tuition at a private school. This is because the government sees homeschooling differently than traditional schools.
Important Things to Know
State Rules:Â Each state has its own rules about 529 plans. Some states might have different limits on how much you can contribute or what you can use the money for.
Changes To The Law: The rules about 529 plans have changed recently, so it's important to stay updated. You can find the latest information on the IRS website or by talking to a financial advisor.
Other Options:Â There are other ways to save for homeschooling, like Coverdell Education Savings Accounts. These accounts have different rules and might be a better fit for some families.
If you are thinking about using a 529 plan to save for your child's education, it's a good idea to talk to a financial advisor. They can help you understand the rules and choose the best plan for your needs.
If taxes don’t cover everything, there are other ways to ease the financial burden of homeschooling.Â
Finding Help With Homeschooling Costs
Homeschooling can be expensive, but there are ways to get help paying for it. This section will show you how to find financial assistance, such as grants and programs that can help you pay for homeschooling.
Homeschool Organizations
Grants:Â Some homeschool organizations offer grants, which are like free money that you don't have to pay back. These grants can help you pay for things like curriculum and supplies. It's always worth checking to see what grants are available.
HSLDA:Â The Home School Legal Defense Association (HSLDA)Â is an organization that offers grants to homeschooling families. They have different types of grants, so check their website for more information.
Local Groups:Â Joining a local homeschool group can also help you find resources and support. These groups often have information about local scholarships, discounts, and used curriculum sales.
State Programs
Special Programs:Â Some states have special programs that give money to homeschooling families. This money can help pay for things like tuition, curriculum, and other expenses. These programs can be very helpful, especially if you have a limited budget.
Examples:
Arizona has the Empowerment Scholarship Account (ESA), which gives families money to use for educational expenses.
Tennessee has the Hope Scholarship Fund, which provides scholarships to eligible students.
Idaho and New Hampshire have Education Savings Accounts (ESAs), which are like savings accounts that you can use for educational expenses.
Private Grants and Organizations
More Help:Â There are also private grants and organizations that can help you pay for homeschooling. These can be from foundations, businesses, or even individuals who want to support homeschooling families.
VELA and HSLDA: The VELA Education Fund and HSLDA offer grants to help families start or expand their homeschooling programs. They focus on helping families who are new to homeschooling or who are facing financial challenges.
Non-Profits:Â Some non-profit organizations offer scholarships and other financial assistance to homeschooling families. These organizations might have specific requirements, so be sure to check their websites for more information.
Want to homeschool but worried about the cost?
The School House Anywhere (TSHA)Â believes that everyone should have access to a high-quality education. We offer scholarships to help make homeschooling more affordable for families in need.
Learn More About TSHA Scholarships!
How to Find Help
Connect With Others:Â Talk to other homeschooling families and see how they get help with homeschooling costs. They can share their experiences and give you valuable advice.
Online Resources:Â There are many websites and online communities that can help you find financial assistance for homeschooling. You can also search online for "homeschooling grants" or "homeschooling scholarships."
By using these resources, you can make homeschooling more affordable for your family.
As you manage tax deductions and financial aid, it’s important to keep a few key points in mind.
Important Things To Remember About Homeschooling And Taxes
Taxes can be tricky, especially when you're homeschooling. There are many rules to follow, and it can be hard to understand them all. This section will give you some important information about taxes and homeschooling.
Get Help from a Tax Expert
Tax Professionals:Â It's a good idea to talk to a tax expert, like an accountant or tax preparer. They can help you understand the tax rules and make sure you are doing everything correctly!
State Rules:Â Each state has different rules about taxes and homeschooling. A tax expert can help you understand the rules for your state. They can also help you find any tax breaks that you might be eligible for.
Stay Updated:Â Tax laws can change, and a tax expert can help you stay updated on the latest changes. This is important because you want to make sure you are always following the current rules.
Keep Good Records
Track Your Spending:Â Keep track of all your homeschooling expenses, like books, curriculum, and supplies. You can do this by keeping receipts, using a spreadsheet, or using a special app to track your spending.
Organize Your Records:Â Keep your records organized so you can easily find them when you need them. You might want to create a folder or binder for each year's homeschooling expenses.
Make Copies:Â Make copies of your records and keep them in a safe place. This is important in case you lose your original records or if they are damaged.
Shared Expenses:Â If you share expenses with other homeschooling families, make sure you keep clear records of who paid for what. This will help avoid confusion and ensure that everyone gets the correct tax deductions.
By following these tips, you can make sure you are following the tax rules and taking advantage of any tax breaks that are available to you.
Wrapping Up
Understanding the tax implications of homeschooling can seem complicated, but it doesn't have to be! By staying informed and organized, you can make the most of any tax benefits that are available to you.
Remember to keep good records of your homeschooling expenses. Don't hesitate to reach out to a tax professional if you have any questions. With a little planning and effort, you can make homeschooling more affordable for your family.
Want to make homeschooling even more affordable?
The School House Anywhere (TSHA)Â understands that homeschooling can be expensive, and we're here to help you make the most of your educational investment.
Here's how TSHA can help you save money:
Affordable Tuition:Â We work hard to keep our tuition rates low so more families can experience the benefits of our unique and engaging curriculum. We believe that a high-quality education shouldn't break the bank!
Flexible Payment Plans:Â We offer flexible payment plans that allow you to spread out the cost of tuition over time. This can help you manage your budget and make homeschooling more affordable.
Scholarship Opportunities:Â We also offer scholarships to families who need financial assistance. We know that every family's situation is different, so we consider each scholarship application individually to see how we can help.
Tax Deductions:Â We can provide you with information and resources to help you understand the tax implications of homeschooling. This includes guidance on taking advantage of any deductions or credits that might be available to you.
Free Curriculum Resources:Â We offer a variety of free curriculum resources, like printable worksheets and online activities, to help you supplement your homeschooling program and save money on materials.
Ready to give your child an amazing education without overspending?