The Old Schoolhouse Magazine

for which they were not intended. Not only could that lead to problems with the IRS, but it is also morally wrong.

3. Do Take Advantage of
Charitable Contributions

Although you should not bend the tax rules, there are plenty of legitimate deductions and credits that can benefit your family. The charitable contribution deduction is a great example. Many homeschoolers are generous to others with their time, talents, and treasure. They often tithe at church, volunteer at homeless shelters, and donate items to food banks and the Salvation Army. These activities teach homeschooled children valuable lessons about morality, finances, and social services, and they also have an added advantage: They are fully deductible on your income taxes (but only if you itemize deductions and do not merely take the “standard” deduction).

Be sure to track your donations throughout the year so that you can take the charitable contribution deduction and reduce your tax burden. 7 To claim a monetary donation you will need documentation, such as a receipt from the charitable organization or a canceled check from your bank. For in-kind contributions (such as clothes, furniture, or computers), be sure that you have some proof of the donation, along with an assessment of its fair market value. You can often obtain that information from the charity itself at the time of donation. You can also deduct out-of-pocket expenses associated with your charitable work, such as gas costs and mileage you put on your private vehicle.

4. Do Explore Whether a
Coverdell Education Savings
Account (ESA) Works for You

A few states, such as California and Illinois, treat the home school as a private school. For families in those types of states, there may be another federal tax benefit worth exploring: the Coverdell Education Savings Account (ESA). 8

In essence, Coverdell is a savings ac-
count that allows you to deposit up to
$2,000 per year toward your children’s
education expenses. It was originally en-
visioned as a way to save for college but
has been expanded to include expenses
from elementary and secondary educa-
tion. Money you deposit will grow tax-
free and can be used for the purpose
www.TheHomeschoolMagazine.com
of paying certain qualified educational
expenses, such as teaching materials,
books, and even such things as cable and
Internet connections (if used for educa-
tional purposes). Although the Coverdell
ESA is always a good way to save for col-
lege, remember that it cannot be used for
homeschooling expenses in states where
home education is not the equivalent of a
private school.

. . . Although you may
devote a portion of your
home to the “business”
of home education,
that does not make
your schoolroom a
“home office” under
the tax code.

Those are just a few “Do’s and Don’ts” to think about this tax season, but don’t put off your research until the last minute! Most errors on tax returns are simple math mistakes caused by those who are rushing to get their paperwork done under time pressure. If the deadline sneaks up on you, don’t hesitate to file for an extension with the IRS. My hope for you this “season” is that your family’s homeschooling adventure comes with a tax break.

Antony B. Kolenc (J.D., University of Florida College of Law) is an author, speaker, and law professor at Florida Coastal School of Law. He is also a retired U.S. Air Force officer. He and his wife have homeschooled their five children for over a decade. Tony is author of The;Chronicles;of;Xan historical fiction trilogy, as well as many legal articles. Learn more about him at www.antonykolenc.com. If you have a law-related homeschooling question that you would like to see Tony address in a future column, please email TL@TheHome schoolMagazine.com.

Endnotes:

1. In Illinois, where students educated at home are treated the same as those in private school, parents can claim a modest tax credit for such things as books and lab fees, up to a maximum of

$500 per family. See 35 Illinois Compiled Statutes 5/201(m). Minnesota provides a more generous program of tax credits or deductions, although the benefit is reduced as household income increases. See Minnesota Statutes § 290.0674.

2. See Home School Legal Defense Association (HSLDA), Education Tax Credits (March 1, 2011) (available at www.hslda.org/docs/ nche/000010/ 200504150.asp) (summing up programs in various states).

3. See Information Bulletin #107, Unreimbursed Education Expenses Deduction (State of Indiana website) (available at www.in.gov/dor/reference/ files/ib107.pdf).

4. See Jason Plake, Indiana Personal Income Tax: Private School/Homeschool Deduction (March 15, 2012) (available at tax.somersetblogs.com/2012/03/15/ indiana-personal-income-tax-private-schoolhomeschool-deduction).

5. See Internal Revenue Service, Publication 529, Miscellaneous Deductions, 2011, at 4 (excluding homeschooling expenses as “qualified expenses” for educators) (available at www.irs.gov/pub/irs- pdf/p529.pdf).

6. See Do Homeschoolers Deserve a Tax Break?, The New York Times, January 4, 2011 (available at www . nytimes.com/roomfordebate/2011/01/04/do- home-schoolers-deserve-a-taxbreak?ref=opinion).

7. There are many details associated with this deduction. See Internal Revenue Service, Publication 526, Charitable Contributions, 2011 ( available at www.irs.gov/pub/irs-pdf/p526.pdf).

8. For details of the Coverdell ESA, see Internal Revenue Service, Publication 970, Tax Benefits for Education, 2011 (available at www.irs.gov/ pub/irs-pdf/p970.pdf).