July 4, 2008
www.umd.edu

Tuition Tax Deductibility in Jeopardy!

December 31, 2005 will mark the end of tuition tax deductibility for college tuition as we know it, unless we can convince Congress to act in the meantime.

Under current law, a deduction of up to $4000 for college expenses for a dependent is available to joint filers with an adjusted gross household income of $130,000 or less. The deduction is phased out at higher income levels, and becomes completely unavailable for households with income of more than $160,000.

While some deduction is better than nothing, this deduction is remarkably small considering the expenses associated with sending your son or daughter to college.

In joining with College Parents of America on this effort, our goal is threefold:

  • eliminate the December 31, 2005 sunset on this deduction, so that families can depend on its availability as part of the IRS code going forward;

  • raise the paltry $4,000 amount for the deduction to a more reasonable figure of $11,300, and to index the $11,300 figure in future years so that it stays more in line with real college costs; and

  • remove the income ceiling on the ability to take advantage of the deduction, so that all families with dependents in school are rewarded for their investment in higher education.

When you write a check for your son or daughter's college education, you are actually helping to create a new taxpayer who, because of his or her college degree, will be attaining a career income that is, on average, a million dollars greater than a counterpart with only a high-school degree. Revenue from that future taxpayer will more than offset the short-term cost of the current deduction.

Support our efforts to save tuition tax deductibility by signing the online petition located at the following website: https://www.collegeparents.org/cpa/advocacy-tuition.html. Also, please tell your fellow college parents, friends, family members and neighbors about the petition. The more online signatures we gather, the more that members of Congress will pay heed to our effort to preserve and grow this important deduction.

Special thanks to James Boyle, President of College Parents of America, for organizing this important effort.