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

DollarsAndSenseShow11

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

Listen to the show here

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.

Links:
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. http://www.house.leg.state.mn.us/hrd/pubs/educcred.pdf

Home School Legal Defense Association has an explanation of some states’ tax breaks or credits:http://www.hslda.org/docs/nche/000010/200504150.asp

Ann Zeise of A to Z Home’s Cool has a great, detailed and lengthy post of tax write-offs for homeschoolers:
http://a2zhomeschooling.com/laws/homeschool_laws_legalities/tax_writeoff_educational_writeoffs/

 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 DATE when Carol will discuss NEXT EPISODE TITLE

 

 

Teach teenagers about money: Dollars and Sense Show # 10

DollarsSenseShow10

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

Listen to the show here 

Show notes:

Recap: Our motivation to be teaching kids about money:
Other people’s bad examples are all around us, including the US government.
Avoid excessive debt. College debt now exceeds credit card debt.
Someone is watching!
Avoid boomerang kids. We are raising adults, not children

How to Teach
Natural style. As you go about your day. Real life examples.
Get someone else: Sunday school, Scouts, Homeschool co-op
Focused teaching: Family nights, games, books

What to Teach: Teenagers

  • What things cost and what jobs earn.
  • Career exploration. Post high school education.
  • Checking accounts and financial software (Ace Money Lite is free)
  • Budgets. One teenager is given $150/month in allowance, but she has to buy everything: clothes and gas.
  • Avoid credit card debt (but start building credit history in college)
  • Student loan debt. With her dad out of work, a college student chose a  state school when show the debt she would have.
  • Taxes and federal spending
  • Entrepreneurship. Micro Business for Teens. Ethan pays his own cell phone bill. Linnea pays her way to China.
  • Investing. Stock Market simulation.

Resources:
Career Exploration article Pursuing Their Dreams: Career Exploration for High School Students

Schoolhouse Teachers offers my Career Exploration 8 week class

Free! National Endowment Financial Education (NEFE) High School Financial Planning Curriculum http://www.hsfpp.org/

Generation Change for youth groups and Foundations in Personal Finance for schools at http://DaveRamsey.com

Discovering God’s Way of Handling Money from Crown.org 10 weeks , individual or class
Money Matters for Teens Ages 15-18 Edition by Larry Burkett (oldie but still available on Amazon.com)

Micro Business For Teens books at http://MicroBusinessForTeens.com

Starting a Micro Business television show on YouTube

Our federal budget graphically displayed at http://WallStats.com

Tax return simulations from the IRS at Understanding Taxes www.irs.gov/app/UnderstandingTaxes

 

Tune in for the next Dollars and Sense show on February 27, 2014 when I will discuss tax breaks for homeschoolers.

Carol Topp, CPA

 

Teach pre-teens about money: Dollars and Sense Show # 9

DollarsSenseShow9

In this episode of the  Dollars and Sense Show host Carol Topp discusses teaching your pre-teens about money.

Listen to the show here 

Show notes:

Recap: Our motivation to be teaching kids about money:
Other people’s bad examples are all around us, including the US government.
Avoid excessive debt. College debt now exceeds credit card debt.
Someone is watching!
Avoid boomerang kids. We are raising adults, not children

How to Teach
Natural style. As you go about your day. Real life examples.
Get someone else: Sunday school, Scouts, Homeschool co-op
Focused teaching: Family nights, games, books

What to Teach: Pre-teens

  • Allowance. Not always in cash. Try a clothing allowance
  • Savings Account. Power of compound interest. Match their savings.
  • What things cost. Houses, cars, pets, clothes, etc. Explain sales tax.
  • What people earn. Occupations.
  • Start earning money. Extra chores around the house or for family and neighbors. Really motivated kids should read Micro Business for Teens

Resources:

Boy Scouts, American Heritage Girls money badges
The Secret of Handling Money God’s Way from Crown.org Ages 8-12. 12 lessons. individual or class
Money Matters for Teens Age 11-14 Edition by Larry Burkett (oldie but still available)

Career Exploration article Pursuing Their Dreams: Career Exploration for High School Students
Schoolhouse Teachers offers my Career Exploration 8 week class
Micro Business for Teens
Starting a Micro Business television program on YouTube

Kids can play popular online money management games such as Road Trip to Savings, Financial Football, Peter Pig’s Money counter, Money Metropolis, Financial Soccer, Record shop tycoon, Burger Restaurant

 I’m not familiar with these games, so if you have an opinion for or against, please drop a note in the comments.

Tune in for the next Dollars and Sense show on February 13, 2014 when I will discuss teaching your teenager about managing money.

Carol Topp, CPA

 

Teach kids about money: Dollars and Sense Show # 8

DollarsSenseShow8

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

Listen to the show here 

Show notes:

Our motivation to be teaching kids about money:
Someone is watching!
Avoid boomerang kids
We are raising adults, not children
Other people’s bad examples are all around us, including the US government.
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.

Get someone else: Sunday school, Scouts, Homeschool co-op
Focused teaching: Family nights, Games, Book work

What to Teach: Elementary kids

  • Divisions of Money:Give, Save, Spend. Bank with three compartments
  • Money is limited. They must make choices.
  • Delayed Gratification.
  • Plan ahead. Create a shopping list. Plan a dinner. Start an allowance. Have them save for a goal.
  • Respect things. Furniture, other people’s items, pick up their clothes, don’t lose your calculator

 

Resources:

Family Times Virtue Pack (songs, meal time cards, bedtime stories, etc) from www.Crown.org
ABC’s of Handling Money God’s Way www.Crown.org
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 30, 2014 when Carol will discuss teaching your pre-teens about managing money.

 

 

Teach preschoolers about money: Dollars and Sense Show # 7

 

DollarsSenseShow7

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

Listen to the show here 

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.

Resources:

Family Times Virtue Pack (songs, meal time cards, bedtime stories, etc) from www.Crown.org
ABC’s of Handling Money God’s Way www.Crown.org
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.

 

 

Dollars and Sense Show # 3: What a business plan can do for your micro business

What-a-business-plan-can

In this episode of the  Dollars and Sense Show host Carol Topp discusses

What a business plan can do for your micro business

Based on her book Starting a Micro Business, Carol explains what a business plan for micro business can do for you and why a it is guaranteed to bring you success!

Listen to the show here

Show Notes:

Creating a Business Plan

Concept:

The product or service

How to measure success

Marketing

Potential customers

The competition

How you will stand out

Financial Plan

Cost to start

Price to customers

On the show Carol mentioned a YouTube video based on her book, Starting a Micro Business.

and her Pinterest page with lots of micro business ideas

Here’s a free e-booklet on creating a business plan for a micro business. This is a 24 page extract from Carol’s Micro Business for Teens books

CreatingBizPlanCover_small

Tune in for the next Dollars and Sense show on November 21, 2013 when Carol will discuss Unplugging the Christmas Machine.