Any tax breaks for homeschoolers? Dollars and Sense Show #11


In this episode of the Dollars and Sense Show host Carol Topp discusses tax breaks for homeschoolers.


Show Notes:

There is no federal tax credit or deduction for homeschool expenses

Some states do allow a deduction, usually on state income tax. Proposed in Ohio: Property tax deduction for homeschool expenses

Arizona, Illinois, Indiana, Iowa, Louisiana and Minnesota and all have some sort of tax break for individuals. The credit is available to any public or private school student, so it is not unique to homeschoolers.

This website has a comparison of state programs that offer a tax credits for educational expenses or for a donation to a scholarship fund. It was last updated in September 2011.

Home School Legal Defense Association has an explanation of some states’ tax breaks or credits:

Ann Zeise of A to Z Home’s Cool has a great, detailed and lengthy post of tax write-offs for homeschoolers:

Disadvantages of tax breaks for homeschool expenses:
We have an overly complex tax system already
Fear of government regulation, proof of homeschooling, etc.


Remember tax deductions and credits just reduce the tax you pay.

Your state government is not putting cash in your hand to purchase books. You must do that first.

Then you pay a little bit less in tax via a tax deduction.


Tax breaks for parents

  • Exemptions: $3,900 per person in 2013.
  • Child tax credit. $1,000 per child. Ends when child turns 17, not 18! Law says child “was under age 17 at the end of the year.”
  • Earned Income Credit
  • Child care deduction (if working for pay)
  • Educator Expense deduction (not allowed for homeschoolers because the teacher-parent is not employed by a school for 900 hours in a school year)
    • There is a bill in the US House of Representatives to allow home school parents to take this deduction. HR 1850 sponsored by Rep Tom Cole, R-OK.

Education credits/deduction

  • American Opportunity Credit (used to be called the Hope Credit) up to $2,500 per student. Tuition, books and equipment. First 4 years of undergraduate college.
  • Lifetime Learning Credit: up to $2,000 per tax return. Tuition, books and equipment. Undergrad, graduate and courses to acquire or improve job skills.
  • Tuition/fees deduction: Up to $4,000. Cannot claim tuition deduction and AOC/Lifetime for same student in same year.
  • Student loan interest deduction. $2,500 deduction.
  • Some states allow 529 deduction (Ohio)

College savings incentive

  • 529 plans offered in many states. Known an Qualified Tuition Programs (QTP). Tax free earnings when used for tuition, books, room and board.
  • Coverdell Education Saving Account (also known as Education IRA). $2,000 contribution per beneficiary per year. Tax free earnings when used for tuition, books, room and board. Can also be used for k-12 expenses.


Tune in for the next Dollars and Sense show on  March 13, 2014 when Carol will discuss taxes for teenagers.



Teach preschoolers about money: Dollars and Sense Show # 7



In this episode of the Dollars and Sense Show host Carol Topp discusses teaching your preschooler about money

Show notes:

Our motivation to be teaching kids about money:
Someone is watching! So, be a good example
Avoid boomerang kids (those who leave home, only to return, usually because of financial problems)
We are raising adults, not children
Other people’s bad examples are all around us, including the US government. Use testimonies. Listen to Dave Ramsey’s radio show for examples of financial mistakes and how to correct them.
Avoid excessive debt. College debt now exceeds credit card debt.


How to Teach

Natural style

  • Deut 6:6-7enThese commandments that I give you today are to be upon your hearts. Impress them on your children. Talk about them when you sit at home and when you walk along the road, when you lie down and when you get up.
  • Stores, Eating out

Get someone else

  • Sunday school
  • Scouts
  • Homeschool co-op

Focused teaching

  • Family nights
  • Games
  • Book work

What to Teach: Preschool

  • “Mine” (self-centerness) needs to be corrected in preschoolers
  • Benign Deprivation. From John Rosemond author of The New Six Point Plan for Raising Happy, Healthy Children. “Give them all of their needs and only 25% of their wants”
  • Vitamin N: Give them protection, affection and direction, but say “no” more often than “yes”
  • Don’t do for children what they can do on their own.


Family Times Virtue Pack (songs, meal time cards, bedtime stories, etc) from
ABC’s of Handling Money God’s Way
Money Matters: Family Night Tool Chest by Jim Weidmann
Junior’s Adventures and more from Dave Ramsey
Books by John Rosemond


Tune in for the next Dollars and Sense show on January 16, 2014 when Carol will discuss teaching your elementary-age kids about managing money.



Introduction to the Dollars and Sense Show

Host Carol Topp

Host Carol Topp

Host Carol Topp introduces her radio show Dollars and Sense.

Dollars and Sense will air every other Thursday at 1:00 pm ET beginning October 10, 2013.