Claiming Homeschooling Expenses on Taxes
Tax time always brings discussions and questions about homeschooling and taxes. You probably already found out the answer to the most common question: no, you cannot deduct your expenses for home education on your federal taxes. It’s just that simple. No.
Another issue is whether homeschoolers should get any kind of tax credit, since they are educating their children themselves and not using tax-supported public education. In my state, Virginia, debate about whether homeschoolers should qualify for tax credits is ongoing, with a great pair of pro-tax credit and con-tax credit articles available on the VaHomeschoolers website.
In a handful of states, you can get a tax credit for homeschooling. Ann Zeise did a great tax credit roundup on her A to Z Home’s Cool website in 2012, explaining which states have tax credits, as well as addressing other tax-related issues for homeschoolers.
The tax credit issue basically comes down to this: will homeschoolers find any tax benefit welcome enough to offset the disadvantage of having a governmental agency define what should be considered educational? Will tax credits impinge on the freedom of homeschoolers, because with taxation often comes government regulation?
Shay Seaborne, writing here at TheHomeSchoolMom in 2011, explained her point of view, that “when it comes to homeschool tax credit legislation, extra rules are always required.”
A story just published in North Carolina by WRAL describes the varying responses to tax credit legislation that has been proposed there, with comments illuminating the different opinions that homeschoolers have–as well as the responses that “tax credits for homeschoolers” bring out among non-homeschoolers.
Teaching Taxes to Kids
One of the things I do like about the tax credit issue is that it makes a great discussion with homeschooled kids. Children as young as mid-to-late elementary school ages can begin to understand the pros and cons of this issue, and by middle school and high school, most can develop a nuanced understanding of how taxation can drive social policy, including regulation.
Tax time, in general, always provides a reminder to discuss how government works. Regular dinner table conversation at our house has always included tax issues. What is the world history of taxation? What is the U.S. history of taxation? How do governments justify their taxing authority? What services would our family miss if tax-funded agencies did not provide them? How would that differ from other families? Why is representation so important in a government that can tax its citizens? How was the American Revolution motivated by “taxation without representation?” How does “withholding” tax money from workers’ pay checks affect the impression tax payers have about their earnings and the amount of tax they pay?
Just one step away from discussing taxation are the discussions about the federal debt and the federal budget deficit. These are just one step away from larger discussions about economics, with an opportunity to explain very different approaches, such as Keynesian and classical economics. We’re quickly into middle and high school material here, with tax time providing opportunity for an annual mini-unit study that builds a foundation for either a full-out study of economics during the high school years, or at least a look at economics as part of a high school government study.
One fairly easy concept for many children to grasp is Tax Freedom Day, which according to the Tax Foundation, is “the day when the nation as a whole has earned enough money to pay off its total tax bill for the year.” They can also learn that this idea has been challenged by none other than The Center on Budget and Policy Priorities, which finds major flaws with the concept of Tax Freedom Day, but which lacks an elegant model for presenting its case.
That leads to a discussion about how certain ideas become popularized, including how the media adopt certain models because they are easy to communicate–which does not by itself mean the models are wrong. Then we get into the importance of becoming a well-informed citizen, including the necessity to get information from a wide variety of viewpoints to make sure you are getting the whole picture and not just “confirming” what you think you know.
Using Dialogue to Teach
This kind of rabbit trailing from the topic of taxes through the topics of economics, government, and informed citizenry is typical of my emphasis on dialogue as an approach to homeschooling. It works especially well with subjects that people are passionate about or that kids hear about in the news or as part of their family life.
Certainly, the April 15 tax filing deadline in the U.S. sets an agenda for parents to discuss with their kids not only the way the tax code impacts homeschoolers, but also the history of taxation. Which is one step away from the politics of taxation. Which is a very short step from politics in general.
And down the rabbit trail we go.