Carol,
I’m a director for a small classical homeschool program. I am required to have all my children enrolled in the program. I see this as a requirement for being a director and therefore a business expense. Can I deduct my children’s’ tuition and fees as a business expense on my tax return?
-T
Dear T,
No. The tuition and fees are not a business expense; they are a personal expense. They are not tax deductible as a business expense.
Just because the program you use requires you to have all your children enrolled in the program, does not make those expenses “ordinary and necessary” business expenses allowed by the IRS.
To be a bit ridiculous consider this:
I have to eat in order to stay alive and operate my business, but that doesn’t make my meals eaten at home are a business expense!
I imagine that the homeschool program wants to you to wear clothing while teaching, but your typical street clothes are not a tax deductible business expense. They are a personal expense.
From the IRS:
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business.
Generally, you cannot deduct personal, living, or family expenses. (emphasis added)
Source: https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses
Your children’s tuition is a “family expense,” not a business expense.
Do not deduct it on your Schedule C Profit or Loss from Business tax form.
It is not my intention to scare you or anyone else away from operating a homeschool business. You provide a valuable service to homeschool families, but you do need to understand the legal and tax implications, so I am offering this webinar to help:
I recorded a webinar on Tax Preparation for Homeschool Business Owners. It should be a lot of help to tutors, co-op teachers and other homeschool business owners! For details visit HomeschoolCPA.com/HSBIZTAXES
I hope that helps,
Carol Topp, CPA
HomeschoolCPA.com
Helping homeschool leaders
