there any tax breaks for home schooling?
Can Coverdell money be used to pay for home schooling
costs? I know IRS publications cite "eligible educational institution"
when discussing allowable disbursements from these accounts, specifically:
Eligible elementary or secondary
school. This is any public, private or religious school
that provides elementary or secondary education (kindergarten
through grade 12), as determined under state law.
Would a home-based school run by a parent count?
Also, could that parent then claim the above-the-line deduction
for educator's expenses? Thanks.
Education IRAs are another of the newer, greater
ways that a parent or other relative can save for a child's educational
needs on a tax-deferred basis.
Although the allowable contribution of $2,000
is not deductible by anyone, the accounts grow tax free. The account's
funds can be withdrawn tax free if they're used to pay for educational
expenses. The best part is that they can be used for your child's
early education costs, whereas other savings devices, such as Section
529 plans, are limited to higher education costs.
As you point out, the funds have
to be used for an eligible school. From what I found, most states
regulate home schooling to some extent, but none would be considered
an eligible institution in itself. In Florida, I found that some
home schools can be affiliated with what are called Chapter
600 schools, referring to a specific section of the Florida
statutes. Depending on what type of home schooling you choose, these
institutions would probably qualify for Coverdell funds.
is allowed a deduction of up to $250 as an above-the-line deduction
for school supplies. The IRS publications state that an eligible
educator is a kindergarten through grade 12 teacher, instructor,
counselor, principal or aide in a school for at least 900 hours
during a school year. In addition the person has to be an employee,
since the items would have to be otherwise deductible as employee
business expenses. As a home schooler, you would not qualify for