My homeschool is a private school. Can I use 529 funds?

I explained in “Can homeschoolers use 529 plans? Maybe!” that you can use 529 savings account funds for tuition paid to a public, private, or religious school.

Some homeschool students take classes from private schools (locally or online). The tuition payments to these schools can use 529 funds without  penalty or taxes.

So that begs the question,

“In my state, my homeschool is considered a private school. So can I use 529 funds for my private school/homeschool expenses?”

No. Sorry!

Here’s why:

The expenses must be to pay tuition. You don’t pay yourself tuition! That would be silly and not tax-smart.

Your other homeschool expenses such as books, curriculum, school supplies, field trips and are not paymnets for tuition and so you cannot use 529 funds without paying a hefty penalty!

Tuition payments to organizations that are not schools like your local co-op, Classical Conversations, etc.  cannot use 529 funds either (without incurring taxes and a 10% penalty!)

Carol Topp, CPA

Does using a distance learning program mean I can use 529 funds?


If you are homeschooling using an accredited, distance learning program like Mother of Divine Grace where you pay tuition, can you then use your 529 plan money?

Katie in Indiana



529 plans have been a popular way to save for college expenses and have the gains be tax-free when used for qualified educational expenses. The Tax Cut and Jobs Act or 2017 expanded the use of 529 plans to include K-12 expenses. The laws says this about using 529 plans for K-12 expenses:

the term ‘qualified higher education expense’ shall include a reference to expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.” (emphasis added)

There are 2 conditions for you to use 529 funds for K-12 expenses:

1) the costs must be for tuition and

2) the institution you pay must be “a public, private, or religious school

Mother of Divine Grace (MODG) is a California for profit corporation that describes itself as a private school and a private distance school in their California filings.

So if your children are enrolled at MODG (or similar private schools offering distance learning), you paid MODG tuition, and MODG is a school, then you can use your 529 plan to pay for tuition.

Homeschool parents should check with the program to whom they are paying tuition to determine if it is a school according to their state’s definition. If you have any concern about their status as a school, then do not use 529 funds to pay for the tuition. Withdrawals from a 529 fund that are not “qualified” (i.e. tuition paid to a public, private, or religious school) then you must pay income tax and a penalty of 10%. Ouch!

Your other homeschool-related expenses such as books, supplies, equipment, and payments to organizations that are not schools (like a homeschool co-op) cannot use 529 funds.

Carol Topp, CPA



Any Tax Deductions for Homeschoolers This Year?


Are there any tax deductions for homeschoolers this year?

Carol Topp, CPA answered this question originally back in 2014, but the answer is still the same-even with the new tax laws passed in 2017. Additionally, Carol gives some details on college expenses that are tax deductible and tax advantaged college savings plans.

This is a repeat of a podcast episode aired in 2014. I (Carol) caught a nasty cold and sinus infection and couldn’t talk without coughing for several weeks. I hope you find the re-broadcast of this episode helpful!


In the podcast Carol mentioned these resources:

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:


Carol Topp, CPA


Greater Cincinnati Homeschool Leaders Meet Up


Several years ago, I organized a meet up of homeschool leaders in the greater Cincinnati area. I enjoyed meeting other leaders and it was a great time to network, encourage, and share resources. I’m organizing another meet up!

Greater Cincinnati Homeschool Leaders Meet Up

Date: Tuesday February 13, 2018

Time: 7:00 -9:00 pm

Place: Faith Bible Church 8130 E Kemper Rd, Cincinnati, OH 45249 In the Family Room which is on the mail floor, off the foyer to the left. The church is located very close to the intersection of I-275 and I-71 near Kids First Gym on Kemper Rd.

Who: Leaders of any kind (board members, etc) of any type of homeschool organization. Even though we are meeting in a church, this is not just for faith-based homeschool groups. Any and all homeschool groups can sent a representative or two (or more!). If you’re not sure that you could call yourself a “leader” come anyway! If you’re thinking about starting a group, come and glean information.

What will we do: Drink coffee and tea, enjoy dessert and fruit, meet and greet others, a brief opening by Carol Topp of HomeschoolCPA, open Q&A, sharing resources, ideas and solutions.

RSVP is not needed. Just come, but to get on an email list and be reminded of the event email

Please share this information with any group leaders you know in the greater Cincinnati, Northern KY and SE Indiana area.


Carol Topp, CPA

Homeschooling and Happy Birthday USA!

Happy Birthday to the United States of America!

I am very appreciative of the freedom we have in the USA to homeschool our children.

I had my eyes opened recently at the National Conference for Homeschool Leaders sponsored by HSLDA that 90% of the world’s homeschoolers are in the United States.

Take a look at how many places in the world where homeschooling is illegal. It might surprise you:

Germany: Homeschooling is illegal, public or approved private education is mandatory
Greece: Homeschooling is illegal, public education is mandatory without known exceptions.
Liechtenstein: Homeschooling is illegal, public education is mandatory without known exceptions.
Netherlands: Homeschooling is illegal, public education is mandatory without known exceptions.
Sweden: Homeschooling is illegal, public education is mandatory without known exceptions.
Guatemala: Homeschooling is illegal, public education is mandatory without known exceptions.
El Salvador: Homeschooling is illegal, public education is mandatory without known exceptions.
Brazil: Homeschooling is illegal, public education is mandatory without known exceptions.

Source: (accessed June 19, 2017)

I’ve very happy to be living in the USA and enjoyed my freedom to homeschool.

Carol Topp, CPA



Trends in accounting can help homeschool leaders


I recently read an article from CPA Practice Advisor about trends in accounting. The author mentioned 3 trends and  I think all 3 can be beneficial to homeschool leaders.

  • The rise of cloud accounting. No more are the days of emailing spreadsheets back and forth, finding errors and inconsistencies, and being reliant on a desktop accounting system.
  • The focus is on helping small and mid-sized businesses. Accountancy firms have begun to provide advisory services, not just tax and compliance.
  • Advances in technology have increased efficiency. Many solutions available now that simplify and expedite so many processes in accounting firms.

I was pleasantly surprised that I am quite trendy!

  • I encourage my nonprofit clients to consider online accounting programs like Quickbooks Online or These programs allow several people (including me) to remotely access the financial data for your group. That’s good for accountability and shared workload!
  • I focus on small nonprofit organizations. And I provide consultations, not just filings IRS forms (although that is very important to do!). This focus helps me be an expert on nonprofits, taxes, and homeschooling-a unique combination!
  • I’m using technology to improve efficiency. Many of you who schedule phone consultations use my online scheduling service, Time Trade. My latest new tool  such as online project management called Quire. These tools help me keep on track as a I handle a larger load of clients each year. They also help the homeschool leaders know what information I need from them and the steps they need to follow in getting (or keeping) tax exempt status.


I’m always looking for ways to improve my services to you my clients.

If you’d like to be part of my advisory team and give me your input on my products and services, join the Facebook group or the email list. More details here.


Carol Topp, CPA

Workshops on micro business, career exploration and more in Cincinnati 2016

Here are my workshops for the Great Homeschool Convention 2016 in Cincinnati.

MBizIdeas2016 A fun, fast-paced workshop to inspire and equip teenagers to start their own business.

CareerExpl2016 Help for teenagers who have no idea of what they want to be!


Author2016 Dream of holding your book in your hands?


I hope I see you there! Don’t forget to stop by my booth #1411 and chat a bit.


Carol Topp


Great Homeschool Conventions-Cincinnati 2016


I always look forward to the largest homeschool convention in the US-Great Homeschool Conventions in Cincinnati.

Not only is it my home, but I get to meet hundreds of homeschool parents and students.


This year, I’ll be giving three workshops:

30+ Micro Business Ideas for Teens (and Parents!) Friday, April 1, 2016 at 10:00 pm

Career Exploration for High School Students Friday, April 1, 2016 at 5:30 pm

How You (or Your Child) Can Become a Published Author on Saturday, April 2 at 2:30 pm.

Come by my booth #1411 and introduce yourself!

I hope to see some of you there!


Tax breaks for education in some states


I’m frequently asked about tax deductions for homeschooling expenses. The US federal government does not have any tax deductions or tax credits for K-12 education expenses, but some states do offer tax credits or deductions.

This document has a description of state tax breaks for educational expenses. The document is dated 2011.

There is an 2014 update to the document at

It states:

To date, 14 states in addition to Minnesota provide income tax benefits for education-related expenses.
Alabama, Arizona, Florida, Georgia, Indiana,Iowa, Kansas, Louisiana, New Hampshire, Oklahoma, Pennsylvania, Rhode Island, South Carolina, and Virginia all provide tax credits for contributions to nonprofit school tuition organizations that operate like charities; Puerto Rico also allows a similar credit.
Kansas, New Hampshire, Pennsylvania, and Rhode Island allow their credits only for corporate taxpayers; the Florida credit is allowed against corporate, insurance premiums, severance, alcoholic beverage taxes, and sales taxes for certain taxpayers; and Alabama, Arizona, Georgia, Indiana,Iowa, Louisiana, Oklahoma, South Carolina, and Virginia allow credits for both individual and corporate taxpayers.

Arizona also allows credits for individuals who pay extracurricular public school fees and who contribute to character education programs at public schools, and Pennsylvania also allows a corporate credit for contributions to innovative public school programs.

Louisiana allows individuals to claim a tax deduction for qualified education expenses.
Illinois, Iowa and Wisconsin provide individuals with nonrefundable tax credits for qualified education expenses, and Alabama allows a refundable credit for tuition expenses of students leaving state-designated low-performance schools. Iowa’s credit applies to tuition for children attending accredited not-for-profit K-12 schools, and Louisiana’s deduction applies to public, private, and homeschool expenses.

Courts in Arizona, Illinois, Indiana, Iowa and New Hampshire have upheld the permissibility of these education credits.

Did you find your state listed? Ask your tax professional if your homeschool expenses qualify for a tax credit or deduction on your state income tax return.

And always 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.

Taxes and your homeschool expenses


I am pretty new to homeschooling and tax returns. As a matter of fact I have never incorporated my homeschooling into my tax returns since starting homeschool in 2013. What I would be interested in is finding out what are my to-do’s and to-donts when it comes to my household’s tax return and our homeschooling. Please let me know if you can help educate myself and potentially others.


Well, your homeschooling expenses are not included on your federal tax return at all, so there is nothing to be concerned about.

Homeschooling expenses are personal expenses, like groceries or clothes, and are not tax deductible on the US federal income tax return.

You cannot deduct your groceries or your clothes on your tax return and you cannot deduct your homeschooling expenses on your federal income tax return.

A few states may allow a tax deduction, a tax credit or an educational saving account. I cover details in this podcast episode:

Any Tax Breaks for Homeschoolers? Dollars and Sense Show podcast Episode 11

Carol Topp, CPA