Beginning in mid-March 2020, many parents made the decision to homeschool their children based on health and safety, rather than on educational, social, or religious preferences.  Many have chosen to continue to homeschool their children during school year 2021-2022 rather than send them back to a traditional school setting.

Even though we’re all getting tired of hearing about “the pandemic,” the economic, financial, social, and educational impacts of the virus will likely stay with us through the end of this decade.  On a personal finance level, parents new to homeschooling are looking for advice about what the impact of homeschooling will be on their own finances and, based on those impacts, what they can do to responsibly budget their income for the coming year(s).

THE BIG PICTURE

One of the most pervasive “myths” about homeschooling is that it’s a cheap, easy way to educate your children outside the public school system.  Neither of these things is true, so your decision to continue homeschooling your student(s), must be based on other factors.  

The cost of homeschooling your student could fall in the range of $800/year to $2000 per child per year.  Although a few states do allow a tax deduction or tax credit or an educational savings account, homeschooling expenses are not eligible for federal tax breaks.  This is because the IRS categorizes homeschooling expenses as personal expenses, just like groceries or clothes. None of these things can be listed as deductions on your federal tax return.

Numerous ideas for moving homeschooling expenses into the “deductions” column on your federal tax return have been tried over the years.  Some families have tried the dodge of creating their homeschool as a “business,” owned and managed by the primary family breadwinner, who then hires their spouse as a teacher.  The idea is that, in a business structure, school supplies, teacher’s wages and any other related expenses would become tax deductible on a 1040 filing.  Not true, anymore than forming a restaurant in your house and hiring mom or dad as the cook would create a tax deduction.  The IRS would disallow both scenarios because, in either arrangement, there are no paying customers for the service.

The bottom line is – if you’re thinking homeschooling can save you money on your taxes, remember:  There are NO homeschool expenses that you can deduct on your individual federal income tax return. (SOURCE:  https://homeschoolcpa.com/what-homeschool-expenses-can-i-deduct-on-my-taxes/ )

ESTIMATED 2021 HOMESCHOOLING COSTS

A June 29, 2021, article by Sara Lindberg of the website “Homeschooling Guide,” helps to identify potential costs. (https://www.verywellfamily.com/the-financial-impact-of-homeschooling-your-child-5074907 ) Ms. Lindberg writes that “Choosing a curriculum will likely be the most time-consuming part of this entire process. It will also be one of the most expensive unless you’re hiring a private tutor or teacher.”  

The same article outlined the average per-student annual cost for supplies other than actual curriculum packages.

“According to a 2020 Deloitte back-to-school survey, families expect to spend, on average (per student), the following amounts for supplies and technology: 

(SOURCE:  https://www2.deloitte.com/us/en/insights/industry/retail-distribution/back-to-school-survey-2020.html )

  • Computers and hardware: $395
  • Electronic gadgets and subscriptions: $316
  • School supplies (pencils, pens, paper, etc.): $102
  • Technology is a significant cost—especially if you are using an online curriculum. A ballpark range for a computer, tablet, or Chromebook is $250 to $1,000. If kids can share one device, great. If not, make sure to account for that cost, and also internet access. You may need to upgrade your service for faster connections if several family members need to access the internet simultaneously. 
  • Depending on the curriculum you purchase, you may need to buy additional textbooks. Many families also keep a well-stocked library at home with fiction and non-fiction books to supplement language arts and independent reading time.”

TEACHER-RELATED EXPENSES

Although some families opt to hire a tutor to assist in homeschooling their children, most often, one of the child’s parents will have to step up to the plate as a fulltime teacher.  (NOTE: This assumes actual homeschooling rather than remote learning organized and supervised by the local school district.)

This could mean that one parent would have to stay home to assume the role of teacher.  This also creates the possibility of the parent/teacher having to leave a paying job, perhaps creating a 50% reduction in household income.  The best thing you can do in calculating whether this approach is “affordable,” is to calculate the financial impacts one year in the future based on the elimination of one full time income.  

The potential loss of 50% of the family income may not be possible. Another route might include the parent who quits their job and stays home supplementing the income stream by getting a part time job that allows them to work in the evenings or on the weekend.  (NOTE: Also remember to calculate the potential psychological impact on the parent that elects to quit their job, stay home, and take on a second job.)

DAYCARE SAVINGS

While you’re trying to balance your budget to see if you can afford to homeschool your kids, look for items you can move from the debit to the credit side of your accounts.  One of the biggest cost-saving items is dollars you are currently paying to send your kids to daycare on holidays, or after regular school hours. 

The organization, Child Care Aware of America (CCAoA), “works to ensure that all families have access to quality, affordable childcare.”  According to the CCAoA website, 

“Homeschooling removes a huge financial burden for many families, especially those with multiple children. While homeschooling, at least one parent is home full-time during the day to teach their children and transport them to various activities — while also perhaps providing care for younger children. This eliminates the need for professional daycare and afterschool care during the week. It’s no secret that childcare costs are expensive in many areas. On average, married couples spend 11% of their income on child care costs,” according to Child Care Aware’s 2019 report The U.S. and the High Price of Child Care: An Examination of a Broken System (https://www.childcareaware.org/our-issues/research/the-us-and-the-high-price-of-child-care-2019/ ) .

WHAT HAPPENS NEXT?

Despite the financial issues related to homeschooling and the fact that:

  • Homeschool parents must continue to pay taxes that support public school systems,
  • There are additional costs related to homeschooling, and
  • the federal government still offers no cost savings or tax breaks to homeschooling parents, 

…people have emerged from the pandemic with a more positive attitude towards homeschooling than they reported before March 2020.

Mike McShane, a contributing education writer for Forbes.com, reported on March 9, 2021, that “Far from what the loudest voices on social media seem to say, the pandemic has made people more favorable to homeschooling, not less. Those who have homeschooled have found it to be a positive experience. It has even caused families to think about hybrid models that might offer the best of their homeschooling experience while still offering some of the features of traditional schooling.” 

(SOURCE: https://www.forbes.com/sites/mikemcshane/2021/03/09/opinions-on-homeschooling-have-changed-during-the-pandemic/?sh=7207b0704672 )

The bottom line is – homeschooling is bigger and better than ever and is here to stay.

 

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