Can Private School Tuition be Tax Deductible? A Comprehensive Guide

The Internal Revenue Service (IRS) does not allow you to deduct tuition from a private school to reduce your federal tax liability. There is no simple federal tax credit or deduction for K-12 private education expenses. Most federal education-related tax credits and deductions are geared toward higher education and career-promoting continuing education, but there are other federal programs, such as Coverdell Education Savings Accounts, that help parents save money on private K-12 education in an indirect way. At the state level, eight states are currently offering tax breaks to families for K-12 private school expenses and a ninth (Ohio) will begin offering breaks this year.

Private school parents can take advantage of a Coverdell Education Savings Account to increase tax-free interest on their savings. When Betsy DeVos' term as secretary of education ended in January, so did her crusade to expand federal funding for private school elections. The federal government will refer you to your state to determine if there are any tax credits available to lower the cost of education in private schools. Some websites will say that you can't get tax breaks for sending your children to private schools in kindergarten through twelfth grade, but that's not entirely accurate. If you're struggling to keep up with the costs of private school education, opening a 529 savings plan might be a smart decision.

That said, you should make sure you know how your state treats withdrawals used for private school enrollment in advance. K-12 private school education expenses are not tax-deductible at the federal level, at least not when paid directly by parents. However, you can apply for a tax credit for a private school if you pay your children's college tuition. Most post-high school education costs may qualify for some type of tax exemption. Elementary and secondary school tuition and expenses don't count, but there are some exceptions to this rule. You can use the credit to offset the cost of after-school child care services offered by your child's private school or other service in the community.

You might be wondering how you can benefit from using a 529 plan to save for a private school in the first place. The money parents spend from these accounts, also known as distributions, is not taxed as long as it is used for the beneficiary's expenses at a qualifying educational institution, including private elementary and high schools and public or private universities. That's a blessing for the wealthiest families because they're more likely to have the resources to invest in the expanded 529 plans and, therefore, they're more likely to get the tax advantages of sending their children to private schools. Whether your children are already in private school or are considering doing so for the future, you're probably looking for ways to save money. If this is the case, it is important to understand all of your options when it comes to reducing the cost of private school tuition through tax credits and deductions.

Jillian Serda
Jillian Serda

Subtly charming twitter trailblazer. Internetaholic. Amateur food practitioner. Certified web practitioner. Avid social media guru.

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