As more families pull their school-age children out of standard public schooling and start homeschooling students, some parents are left wondering about the costs of an at-home education system. Although homeschooling is becoming more popular, only a handful of states offer tax write-offs for homeschoolers.
There are no federal tax deductions for homeschoolers. States like Minnesota, Indiana, Louisiana, Illinois, and Iowa offer tax credits or write-offs for homeschooling students. However, these tax write-offs are contingent on specific state-based criteria.
To help you weigh the financial pros and cons of homeschooling your children, we’ve outlined the state-based deductions homeschoolers may be eligible for. Additionally, we’ve explored all the costs of homeschooling – and how you can lower these costs effectively.
Is Home Schooling Tax Deductible?
Although homeschooling is becoming more popular among families in the United States, there is currently no federal tax write-offs for these families. However, homeschoolers may still have tax credits and deductions that apply to them when living in certain states.
These tax breaks are unique to each state and are limited to certain households and homeschooling expenses. So it’s essential to get familiar with your state’s tax deductions and criteria if you’re a homeschooling parent.
It may be worth noting that whether you’re eligible for tax deductions or credits within your state, U.S citizens are still required to pay any other taxes that contribute to public education and funding of these schools and institutions.
The list of states that offer tax deductions or credit for homeschooling include:
- Minnesota
- Indiana
- Louisiana
- Illinois
- Iowa
In Minnesota, some homeschoolers may gain tax credits rather than deductions that apply to their yearly expenses. However, the credit only applies to families that teach standard subjects that are also taught in public schools and apply to grades K through 12.
Both Indiana and Louisiana also offer tax write-offs for homeschooling families. In Indiana, families may be eligible for up to $1,000 in deductions for homeschooling expenditures. Louisiana’s tax deductions are slightly different and offer up to $5,000 in tax deductions per homeschooling student rather than per family.
According to Illinois tax laws, homeschooling students that are residents of the state and under 21 may be eligible for the Education Expense Credit. The credit covers homeschooling expenses such as textbooks and activities but also applies to tuition and other expenses for public school students.
The Education Expense Credit allows homeschooling parents to include credits for their yearly taxes. The credit covers up to 25% of schooling expenses over an initial expense of $250. However, the credit is limited to $750 per family and has strict criteria for eligibility.
The most recent state to introduce tax deductions for homeschoolers is Iowa. In 2022, Iowa began offering residents a tax credit toward learning materials and textbooks used in homeschooling environments. However, the credit only applies to materials used in the standard public schooling curriculum.
Iowa’s tax credit can cover up to 25% of the cost of books and learning materials but only applies to the first $2,000 spent on these materials. That means that families that homeschool their children will be capped at a tax credit of around $500 per year.
The Cost Of Homeschooling
Homeschooling can be cost-effective for many families, particularly those eligible for state tax deductions or credits. However, homeschooling still costs a significant amount for parents who have chosen to educate their children at home. These costs are important to note if you’re considering homeschooling as an option for your children.
Although it has been mentioned before, it’s important to remember that homeschooling your children does not exempt you from paying local taxes for public education and institutions. However, homeschooling your children and removing them from the public schooling system can help you to save money in other areas.
To give potential homeschooling families a breakdown of homeschooling costs, we’ve compiled a list of some of the hidden – and obvious – costs of at-home education. But while several avenues may increase or decrease homeschooling expenditures, the overall cost will vary from family to family and across cities or states.
Paid Curriculums
The primary foundation of any schooling experience is the curriculum. Even for homeschoolers, the curriculum is the most crucial part of the education system.
Homeschooling parents can quickly put together their own curriculum or find templates or free curriculums online. However, there are some paid ones for parents who are unsure of how to put their own curriculums together.
Similarly, some states require homeschoolers to follow a particular curriculum or provide guidelines to homeschooling families that need to be followed. These curriculums may also become an additional expense for parents.
If parents pay for curriculums for more than one child, these expenses can stack up quickly. They can make up a large majority of homeschooling expenses. On average, families can pay anywhere from $100 for second-hand curriculums from other homeschooling parents to $1,000 for a new curriculum for the year.
Learning Materials
Another considerable expense for homeschooling families is learning materials. From textbooks to other digital or printed materials, it’s no secret that books are expensive. While some homeschoolers buy second-hand textbooks from public school children or other homeschooling units, it can still be costly for families with multiple children.
Although younger children may not need textbooks, the expense may grow exponentially as they age. So even though educating your young children at home may be cheaper, it may be less cost-effective as they graduate to middle and high school.
Digital learning materials can also be pricey. These materials may include various programs and software that children may need to complete tasks and projects.
Some software can be paid as part of a monthly subscription, which may be helpful for families that don’t need continuous use of the programs. However, others may require a once-off yearly payment that can cost a significant amount of money at one time.
Testing Fees
Homeschooling curriculums may differ from state to state, but most curriculums involve regular testing to assess a child’s educational development. These tests may be included with paid curriculums and can be taken at home. But others may be required by the state to be completed on third-party premises and drawn up according to state testing standards.
Testing fees will differ depending on the criteria laid out for these tests. However, when tests are taken regularly, these costs may add up. It’s important for homeschooling parents to take stock of their state’s testing requirements and homeschooling testing requirements to budget for their at-home school year more efficiently.
Stationery And Equipment
Like every K-12 student, homeschoolers need supplies. Notebooks, pens, pencils, and other stationery are ongoing costs that homeschooling parents need to consider. While these costs are relatively low, homeschoolers may need more supplies than public school students.
In addition to stationery, homeschoolers may need to pay for extra supplies for projects and tasks that are usually supplied by schools. These supplies are typically inconsequential, and some frugal homeschooling parents may find second-hand supplies or cheaper stationery to keep their education budget low.
However, as children age, they will need more specific equipment, such as lab equipment for sciences. This equipment may be expensive but are necessary for completing specific curriculums. Homeschooling parents may either buy this equipment themselves or pay for their children to use it at another facility. Either way, these expenses cannot be overlooked.
If homeschooling parents have connections with other families that have chosen to educate their children at home, they may be able to negate some of these costs. They can split costs for equipment or trips to external labs.
Tutors And Homeschooling Networks
Homeschooling is cost-effective and may be a good way for students to learn in a more relaxed environment. Many parents also prefer homeschooling over standard public schooling to provide their children with the care and attention they may need.
But, while parents may be equipped to teach certain subjects themselves, more complicated subjects like the sciences or mathematics may be challenging to teach. Similarly, some homeschooling students may need additional help with certain subjects.
In these cases, homeschooling families may need to hire tutors or other instructors to teach certain subjects or, in some instances, the entire home education curriculum. Tutors may give homeschooling families a bulk-lesson discount or offer fixed fees for a certain number of lessons. However, others may charge families per hour, costing as much as $100 per hour.
Because tutors and other educators can be expensive, many homeschoolers connect with other families and form an informal homeschooling network. These networks are made up of multiple families with children in the same grades or learning the same subjects and split costs across them to make homeschooling more affordable.
Therefore, if a tutor charges $100, four students of the same age within the network can be tutored at once. Then, the tutoring expense can be lowered to around $25 per hour for each family.
Home schooling networks are a great way to lower overall homeschooling expenses. The homeschooling families and students can exchange supplies, books, and learning materials or split costs for external tests, equipment, and software that the students may need.
Extra-Curriculars And Excursions
Extra-curriculars are incredibly important for school-age children to learn social skills and reach certain developmental milestones. Therefore, involving homeschooling students in after-school activities is incredibly important. Extra-curricular activities can also help homeschoolers to socialize with peers their age.
While there are plenty of free workshops and activities that homeschoolers can attend, some activities may require yearly fees. Of course, the more children you have, the more these activities will cost. However, suppose you’re part of a homeschooling network. In that case, you may be eligible for a group discount rate for classes and activities.
In addition to after-school activities, part of any good school curriculum is excursions and educational trips. These trips may be a helpful way to give homeschooling students a respite from their home classrooms and can be highly educational. For example, a trip to the aquarium may be an excellent way to introduce children to the study of marine biology.
These trips may incur certain expenses. Tickets, transport, and food costs will need to be calculated and included in the trip budget. But, like extra-curriculars, these expenses may be split amongst homeschooling families to lower costs.
How To Cut Homeschooling Costs
Homeschooling may be cheaper than public schooling, but some money-savvy parents may be interested in learning how to lower overall educational costs. Of course, the best way to lower these costs is to take advantage of any state tax deductions or credits for which homeschooling students may be eligible. But in addition to these, families can take a few extra steps to keep costs low.
Firstly, joining a homeschooling network can lower external costs for extra-curricular trips, tutors, and venue hiring for labs. It may also lower the cost of child care if the students rotate where they’re learning. For example, a few families may host the school day for certain days or weeks to give other parents some time off.
Another great way to lower costs is to look for free or budget online resources, learning materials, and curriculums. Online tutors may also be cheaper than hiring an educator to teach students at home. Instead, virtual learning may be more budget-friendly, particularly for large groups of students that form part of a homeschooling network.
Homeschooling families can purchase second-hand or used materials, books, supplies, and equipment. Buying a new version or edition of these supplies can be pricey. But, by buying used supplies, families can keep their costs low when setting up their at-home classrooms.
Conclusion
There is currently no federal tax write-off for homeschooling families. However, some states off tax deductions and credits that homeschoolers can take advantage of. The latest introduction of these tax credits was implemented in Iowa in April 2022. So there may be hope that as the popularity of homeschooling grows, more states will introduce their own tax exemptions for homeschooling.