Tax advice when sending children to private or public schools

Kindergarten to Grade 12 Private Education Tax Relief

In most cases, you won’t get a significant reduction in your taxes by sending your kids to a private school from Kindergarten to Grade 12.

  • The Internal Revenue Service does not allow you to deduct private school tuition fees to reduce your federal tax payable.
  • But in some states, like Arizona, you can claim tuition fees at private schools to reduce the amount of tax you’ll have to pay.

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However, if your child is attending a private school for special needs, you may be able to receive tax relief on your private tuition fees from Kindergarten to Grade 12. To be eligible, you will need a referral from a doctor proving that your child needs access to specialized private education. And, if your child qualifies, you can also deduct the cost of tutoring or special training in addition to tuition.

  • To claim this deduction, you must to give detail rather than choosing the standard deduction.
  • Expenses should be qualified as deductible medical expenses which are reduced by 10% of your adjusted gross income (RGA) for 2019 and 2020 (7.5% of RGA for 2017 and 2018).

Coverdell Education Savings Accounts While you generally cannot use private school tuition fees to directly reduce your tax payable, the government can offer tax relief in the form of Coverdell Education Savings Accounts, or ESA. These accounts allow you to invest your education savings without paying income tax. ESA funds should be used to cover eligible education expenses, such as

  • tuition fees,
  • textbooks, or
  • other supplies required by your child’s program.

The tax benefits of contributing to a Coverdell ESA are capped – contributions for each beneficiary are limited to $ 2,000 per year. For example, if your child’s grandparents contribute $ 1,000 to their Coverdell account, you will only be able to contribute $ 1,000. Your income could also lower your contribution limits.

  • If your modified adjusted gross income is greater than $ 95,000 (or $ 190,000 if you are filing jointly), you will notice a gradual reduction in your contribution limits.
  • If you are eligible, you can contribute to the account until your child is 18, or over 18 if your child has special needs.

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529 Education Savings Plans Like the Coverdell accounts explained above, starting in 2018 you can also use savings from 529 packages to pay for kindergarten to grade 12 tuition. Each year, up to $ 10,000 per student can be withdrawn tax-free from these accounts. However, unlike Coverdell accounts, to keep the benefit tax-free, 529 money can only be used for tuition and not for textbooks, computers, or other fees or activities. Post-Secondary Education Tax Relief You will benefit from the majority of potential tax relief if your children attend private or public colleges or universities. You or your child can use education tax credits to deduct tuition, books and other required supplies that you pay to a qualified educational institution.

Other Potential Tax Deductions If your school offers childcare services outside of school hours, such as before and after school daycare for the convenience of working parents, you may be able to deduct part of the cost of this. guard via the Credit for child care and dependents. To be eligible, you must pay child care expenses separately from tuition and other expenses.

  • You can claim the credit up to a maximum of $ 3,000 for the care of one child or $ 6,000 for the care of two or more children.
  • The credit can be up to 35% of your eligible expenses.

Remember, with TurboTax, we’ll ask you simple questions and fill out the right tax forms for you to maximize your tax deductions.


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