When we began our search for tax breaks for home schooling your children, we heard from parents who are outraged that there are none, despite the fact that their tax dollars support the public school system, some of which won’t share their curriculums with these studious parents. Although it’s true that there are no federal tax breaks—Internal Revenue Service doesn’t even allow the $250 adjustment for expenses that it gives teachers—there are states sympathetic to the added financial burdens of home schooling.
Alabama, California, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Nebraska, North Carolina, Ohio, Tennessee and Texas offer educational savings accounts into which you can put post-tax money to pay for home-schooling expenses, such as books and curriculum. The money set aside grows tax-free. Five other states—Colorado, Florida, Maine, Vermont and Virginia—allow this type of account if you teach other kids for a fee.
Legislation for federal tax cuts for home schooling your children sits on the Hill. Meanwhile, homeschooling parents can earn income as tutors and deduct home-office expenses, says CPA Steven J. Elliott, at Janover Rubinroit. The rules follow day-care tax rules, he explains.