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Share Your Views on Tuition Tax Deductibility
Once again, the U.S. Congress is about to let expire one of the few family friendly policies of the federal government when it comes to paying for college. Tuition tax deductibility is utilized by hundreds of thousands of taxpayers and provides at least some relief toward the soaring cost of college. Unless Congress acts, however, tuition tax deductibility will expire as part of a sunset provision that will kick in on New Year’s Eve - Monday, December 31, 2007. Please leave a comment below and share your views on the importance of Tuition Tax Deductibility and please also sign our online petition to keep this deduction in place. Thank you in advance for sharing your views and for helping to keep this deduction in place for you and your fellow taxpayers who are current and future college parents.
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on Monday, December 3rd, 2007 at 11:33 am and is filed under College, College Costs.
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January 7th, 2008 at 9:18 pm
The sad reality is that Most MIDDLE-CLASS families will not be able to take the tax credit even if it is offered. The AMT (alternative Minimum tax) will reverse any tax credit you may think you are going to get from this. I know so. I have never been able to deduct any of this tax credit. I have two children in school in MI. I pay over $20,000/year/child. Last year with books and living expenses I paid nearly $50,000. Yes, I had to take it out of my 401k (my retirement). We only qualified for loans of $6,000 total for the entire year for two. The sad reality is that I could not deduct a dime or take any tax credit. The law for this must change. Every and any parent should be eligible for a tax credit and not be thrown into the double tax bracket with the AMT. That is what it does for me. I am middle class and work two jobs as a nurse to pay for this. I don’t think any nurse can be classified as “highly compensated” However, this is a reality for me and my children. .
December 5th, 2007 at 10:12 am
I’m having the same thoughts how are middle class families going to pay for our children to go to college. We can’t afford to save for college, save for retirement and pay these outrageous gas prices - we need to be able to at least use the college tax deduction and yes $4,000 is way to low. The average student today is taking loans for $60,000 or more just for a public college. I feel sorry for our children when these loans come due they will be paying $600 or more a month to repay these loans, talk about starting out in life with debt. They won’t be able to afford to live on their own let alone buy a house. Our country has so many problems right now but at least we can help our children with their college degrees
December 4th, 2007 at 12:50 pm
I have no idea how we’re going to keep this deduction in place, but we’re going to have to find a way to do it.
Younger parents can start planning for their child’s college with long term savings plans, but what about those who depend on this deduction to put their children through.
Are we going to saddle another generation with obscene debt or be forced to take on even more ourselves in the form of second mortgages and credit cards? I mean, that 2k has to come from somewhere since we were previously used to the refund….
December 3rd, 2007 at 10:42 pm
I find it amazing that anyone can” afford” to go to college, yet in the same breath, our children can’t “afford” NOT to go to college. They must get a college degree, and then secure one of those high paying careers to be able to pay for the next generation. It all comes down to”What value do you place on a college education”? Is it worth 160K?
or 320K? Congress has yet to address this for “all” Americans.
December 3rd, 2007 at 4:56 pm
How incredibly short-sighted to make it harder for lower- and middle-income families to educate the next generation of citizens and workers. In an era of increasing global competitiveness, what will be the cost of increased ignorance and diminished production ? Surely higher than the value of the tax deduction.
December 3rd, 2007 at 4:07 pm
This whole issue is ripe with irony. First, the amount of the deduction is on its way to being $2000, which is less than the annual tuition increase at a lot of private universities. It’s so token at $2000 (deduction, not credit, so it’s really worth between $200 and $700 to a taxpayer facing tuition bills of $13,000 to $50,000) that it’s ridiculous. Second, the income phase-out is ironic, since most aid is now need-based. That means that those who are the most likely to get no college aid and face the full crush of tuition get little or no benefit from the deduction, while those who benefit from the deduction are those most likely to get aid and not need it. Third, big mortgage payment deductions (after borrowing to pay for college) and a $13,000 deduction for tuition would probably trigger AMT for a lot of parents on the cusp. If the deduction is extended and increased to $13,000, the AMT exemption needs to be written in so the deduction is not offered with one hand, and taken away with the other.
A better way to help families would be to fix section 568 of the Improving Americas’s Schools Act that allows colleges to count annual contributions to 401K retirement savings in their calculations of family ability to pay tuition. The tax laws allow 401K contributions of up to $15,000 ($20,000 for older workers), but colleges treat annual retirement plan contributions as available for college tuition when calculating expected family contribution to tuition. Changing the law to define plan contributions as ineligible for inclusion in college ability-to-pay contributions would help parents pay for college without risking their retirements.
December 3rd, 2007 at 1:51 pm
As working parents, we need all the deductions we can get in order to afford to send our children to college. With two children in college, this is devastating news. The sun cannot set on this deduction