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I am a homeschooling mother and Certified Public Accountant (CPA) combining my experience and knowledge to help homeschool organizations such as co-ops, support groups, music and sports programs. HomeschoolCPA answers questions from homeschool leaders on many topics such as nonprofit status, liability, paying teachers, tax exempt status and taxes.
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11:57 AM, Nov. 6, 2006
Do homeschool teachers get the Educators Expense deduction?
(view similar articles on Personal Finance and Taxes)
I get asked a lot: "Are there any tax
breaks for homeschooling parents?" My usual reply is, "No; do
families with children in private schools get a tax break? (no)
Do you want them to get a tax break?" (no) But here's a bit of a new twist on the question from the RollsLife blog
I
have a question, I spoke with an IRS representative just today about an
educator's expense tax break. (I guess that's what it's called. LOL)
The IRS rep stated that IRS laws specifically prohibit homeschoolers
from getting up to $250 credit for educational items purchased.
However, he stated congressional law overrides IRS law and that
congressional law requires teachers work in a school as defined by
state law. In our home state, Kentucky, we are considered private
schools. The IRS rep suggested I give the credit a go next year but be
prepared for an audit. Can you shed some light on the situation?
She is refering to the Educators Expense deduction of up to $250 in unreimbursed expenses.
I know that the IRS guidelines say to be an eligible educator :
"You
work at least 900 hours a school year in a school that provides
elementary or secondary education, as determined under state law."
To work means to get paid (to the IRS, not to all of us SAHMs!). Homeschool parents are not
employees of a school. We do not get paid; we do not get a
W-2. I attended a tax workshop where we were told that the IRS
will check for a W-2 from a school if a taxpayer takes the Educator
Expense deduction. Homeschoolers would not have a W-2 from a school,
even if your state classifies your homeschool as a private
school.
The intention of the tax deduction was
to move the deduction from the Schedule A (Itemized deductions)
Miscellaneous Deductions line where it was subject to a 2% of Adjusted
Gross Income limit (meaning anything OVER 2% of your AGI could be
deducted) and put the deduction on the front page of the 1040, so even
teachers who don't itemize deductions can take advantage of the $250
deduction.
The Educator Expense Deduction was nearly
eliminated in 2006, but received an extension. I predict the
deduction will not be around for much longer. IMHO, it was
President Bush's attempt to get a few votes from paid teachers.
So in short, I do not take the Educators Expense deduction, nor
recommend that other homeschool families take the deduction. The
IRS rep was right, be prepared for an audit. But without a W-2
from a school, you won't win.
HTH,
Carol
P.S. Here are my required "lawyer" words:
Internal
Revenue Service Circular 230 Disclosure: Advice relating to
federal taxes that is contained in this communication (including
attachments) is not intended or written to be used, and cannot be used,
for the purpose of avoiding penalties under the Internal Revenue
Code or promoting, marketing or recommending to another party any
transaction or matter addressed herein.
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Thank you so much for clarifying that for me. It sounded too good to be true and you know the saying.... LOL!
Posted by RollsLife on Nov. 7, 2006 at 9:03 AM
I recently had a book sales rep advise me that I could deduct the books that I had purchased. I also questioned whether it was legal. Thanks again.
Oh, I will be posting a link to this post on Berrymorins Bits and Tips, as well as Marcus and Me.
Have a terrific holiday.
Posted by berrymorin on Nov. 21, 2006 at 1:48 PM
i don't understand why homeschoolers don't get a tax break. i understand that people who pay to send their kids to private schools don't get one either. but....why not? we get tax breaks for paying for college. why is paying for grade school considered different than paying for college?
Posted by Anonymous on Oct. 2, 2007 at 8:57 PM
and the sad thing is that we (home schooler's) pay the same taxes (local, state, federal) as all the people who send their kids to public AND foot the bill for the books, programs, field trips, tutors, evaluations and everything else our children have!
the least they could do is give us the same break as "real" teachers.
Posted by Anonymous on Jan. 21, 2008 at 10:56 PM
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Untitled Comment
me too
