“Incorporate yourself and write off homeschool expenses.” Really?

TaxAdviceLetters

 

Hello. I’ve been doing some research lately on how best to write of homeschool expenses in the state of Florida and came across your website. I’m hoping that you can assist me.

I’ve contacted my accountant who was able to confirm that the only way to write off homeschool expenses in Florida is to incorporate yourself.

If I go through that process, is there a site or a list of what I will be able to write off? Is it 100% of costs like curriculum and field trips? I’ve also heard that I can write off mileage related to homeschool events and even a portion of my mortgage.

I haven’t been able to find a good list anywhere that will tell me what steps I need to take and what advantages I will have once I take those steps.

Can you help or direct me to a good site that can help me?

Thank you so much for your time.

Becky C in FL

Becky,

To “incorporate yourself” you need a legitimate trade or business with a source of revenue (i.e. sales of a product or service). Paying yourself for homeschooling your own children does not count as a trade or business or revenue, so you cannot legally form a corporation.

Even if you do somehow form a corporation without revenue, your homeschool expenses are personal expenses and cannot be deducted on your corporate income tax return.

The advice you received from the accountant you found was incorrect.

Carol Topp, CPA

 

Any Tax Breaks for Homeschoolers?

handswithcash

Tax season has officially launched, so it’s time to address a question I am frequently asked,

Do homeschoolers get any tax breaks for their homeschooling expenses? Can a homeschool family deduct any of their homeschool expenses?

Sorry, but the federal government does not give a tax credits for homeschool expenses

State tax credits or deductions for homeschool expenses

But, several states have an educational tax credit. Iowa, Arizona, Minnesota and Illinois 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. Florida and Pennsylvania offer businesses tax credits if they sponsor a scholarship.

This document has a chart of education tax credits and deductions by state (updated November 2008). Scroll to page 6 to see the chart.

http://www.house.leg.state.mn.us/hrd/pubs/feelaw.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

Homeschool business or nonprofit as a tax dodge?

Some homeschoolers think they can start a business or a nonprofit organization of their homeschool activities and then deduct their expenses.  It doesn’t work that way. See my blog post  “Can you set up homeschooling as a business?”

Ann Zeise of A to Z Home’s Cool addresses these ideas:

You cannot contribute to your own child’s K12 education and get any tax deduction for it, no more than if you sent him to a private school and tried to write off the tuition.

Carol Topp, CPA

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