Taxpayer asks:
My husband and I have a 4 yr old daughter diagnosed with autism (higher functioning). We are considering enrolling her in a private preschool that has a program specifically designed to help children with autism, something the public school system cannot offer. The yearly tuition is $22,000. Can any of this be tax deductible?
Taxgirl says:
This is one of those questions that feels like it should be easy but it’s not. There are a couple of options and a few restrictions. So let’s take it in pieces…
Private school tuition is generally not deductible. However, private school tuition for grades below kindergarten (i.e. preschool and daycare) is deductible if it would otherwise qualify as childcare. So to the extent that the program would qualify as childcare, the preschool tuition would be deductible until she enters kindergarten.
For grades kindergarten and above, the tuition would be deductible to the extent that you could separate the education piece from the childcare piece. This would apply if you enroll her in a full day program (usually including before or after care), for example, when the educational component stops midday.
All of that said, you may be able to take a deduction for tuition as a medical expense, assuming that you itemize. I say may because there are restrictions. The IRS allows a deduction for medical expenses for “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body.” In some cases, this may include tuition for special schools for children with special needs if the primary reason for the school is related to the medical condition. In other words, it can’t just be that the school would be a “better” school for your child or that the school offered an extra program or certain atmosphere that you thought would be beneficial. Additionally, a doctor must recommend that your child attend the school (be prepared to back this up).
So who qualifies? The IRS has traditionally allowed tuition as a medical deduction for children who are deaf, blind or have learning disabilities. In recent years, the IRS has also allowed medical deductions for educational programs for children suffering from depression, ADD and severe effects of substance abuse. The key is whether there’s an actual medical need by the child for the specific program.
Aides and tutors hired to assist special needs children may also be claimed as medical expenses (assuming, again, that they are medically necessary).
Keep in mind that to the extent that your insurance company covers the costs of any of these treatments, you may not deduct the portion which is covered or reimbursed to you.
I hope that helps!
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl! – Now on Facebook!
Taxpayer asks:
My daughter is in her second semester in Troy University. She has never had an income so we are paying everything from tuition, books, clothes, her apartment, providing a car, cell phone, gas etc. I know that I can deduct the tuition, what about the living expenses?
Thanks for any info you can give me.
Taxgirl says:
First of all, if your daughter is reading (or even if she’s not), she needs to give you a great big smooch and say thank you. It sounds like you are going above and beyond – an apartment? a car? a cell phone? Can you adopt me?
All of that said, you cannot deduct living expenses on your federal income tax return. It’s considered the cost of, well, living.
All is not lost, however. You may still be able to deduct medical expenses, some school fees and claim your daughter as a dependent if you are supporting her. See my post about child-related tax breaks for more information.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl!
Mitt Romney has said publicly that parents who home school their children should get a federal tax credit to help offset the expense of teaching. “I also believe parents who are teaching their kids at home, homeschoolers, deserve a break, and I’ve asked for a tax credit to help parents in their homes with the cost of being an at-home teacher,” he said.
He then explained that he supports giving parents more educational options, including charter schools or vouchers, but felt that those should be restricted to state and local governments.
I don’t *get* this at all. In an increasingly polarized society between the rich and the poor, often geographically based, why make some educational incentives state and local based, but give a federal home-schooling credit? It’s more complicated than it needs to be. And considering state and local budgets, it’s really the same as offering a break to some of the population and telling others that that they’re out of luck. Specifically, it penalizes working mothers who don’t feel comfortable sending their children to public schools. Oh yeah, I’ll say it again: a homeschooling credit without an accompanying private school credit is discriminatory against working mothers.
To be clear, I support the concept of homeschooling. My sister-in-law home schooled my niece and nephew for a short time because their school system in rural South Carolina was not getting the job done. Ultimately, my sister-in-law went back to work and the kids went to private school. Under Romney’s proposal, my sister-in-law would have received an economic break for home schooling but not for sending her children to private school while she worked – and I feel fairly confident saying that South Carolina would not have, on its own, provided an equivalent tax break for private schools.
I have often said that I support public education. In the US, however, the differences from school to school are dramatic and sometimes, it is not feasible to send your child to a public school. In a perfect world, there would not be a financial incentive to send your children to private schools or alternative forms of education. However, we don’t live in a perfect world. We live in a world where some public schools are unsafe and underperforming. And if you offer a financial incentive to one set of alternatives, like home school, why wouldn’t you extend that to other alternatives? Is the message that you’re sending that staying at home with your children is always better? Is that fair or realistic?
Education is a tricky thing. We all want our kids to have the best. But throw economics into the mix, and it’s tough to be middle class in America where your educational choices for your children are often made for you. In this country, we’ll subsidize bigger homes but not better schools. And now Mr. Romney suggests that if you can afford (or desire) to stay home with your children, we’ll subsidize that, too. Why is that remotely fair?
Remember that Staples ad where the parent runs down the aisle tossing school supplies into the cart while “It’s the Most Wonderful Time of the Year” plays in the background. That’s how I feel about this time of year.
As the parent of three children, I love back to school. I crave the sense of normalcy and order that it brings to my house. Summer to me, is chaos. Just hot, sticky chaos. But back to school? There’s a schedule. Every day, there is a sense of purpose. My oldest daughter scrambles out of bed in the morning with a plan: get dressed, pick up the backpack and head out to school. And this year, my youngest daughter who very matter of factly accused me of keeping her out of school on purpose is starting preschool a few days per week. There are school events: picture day, picnics and dinners. It is a thrilling season.
Until the tuition bill comes.
As I might have mentioned once or twice before, I live in Philadelphia (get used to more references – football season is starting, the Eagles are playing and I have Donovan McNabb in my fantasy football league). For reasons that are more complicated than a blog post or two can cover, I choose to send my children to private school rather than public school. This is not an easy thing for us to do financially, and it will become more difficult as my children get older. It is, as I’ve posted about before, part of the difficulty of being middle class in America.
And each time I try to sort out whether this is the right thing to do, I realize that, as a nation, I still can’t figure out our priorities. The feds don’t give you any kind of break for private school tuition: if you pay for private or parochial school, no deduction. Yet, since I can keep my child out of school in the state of Pennsylvania until the age of 8 (!), if I paid for private childcare at home instead of school, that would be deductible. Oh yeah, you read that right: it’s better from a tax perspective to keep my child home for years and pay for childcare than to send her to private school. Is that smart tax policy?
And if I buy a more expensive home in a different school district, the interest from the mortgage interest is deductible. And how much “extra” home could I buy? The interest equivalent of tuition for my three children is about $450,000. Put another way, inflating the amount that I am willing to spend on my home by $450,000 results in additional annual mortgage interest equal to the cost of tuition for my children – and it’s deductible. How deductible? I can deduct the interest of a home worth up to a million dollars – a million. So instead of investing in education, I should invest in real estate according to current tax policy. Kind of makes you understand how we got into this sub-prime fiasco, huh?
Don’t get me wrong. I love my daughter’s school (I’d better, I signed up to be class parent this year). I value education. I make sacrifices so that my children can go to a good school (you will not be seeing me in these Jimmy Choo shoes anytime soon). But I just have to wonder about the direction our country is headed when we’re willing to subsidize houses, cars and even washing machines through tax incentives – but not education.
Well, the feds do offer some tax incentives for college. I guess that’s something.
