College Families Will be Overpaying Their Taxes - Again!

Families who made their best guess as to which ofsupported and voted for. The Act created two
the Education Tax Incentives would save them theeducation tax credits; the HOPE Scholarship Credit
most on their income taxes, have put their 2007 tax(maximum $1,500 a year for 2 years), and the
returns to bed. However, for many, a sigh of relief isLifetime Learning Credit (maximum $1,000 increasing
a bit premature. Countless families, even whento $2,000 in 2003).
assisted by professional tax preparers, choseNote: A tax deduction lowers taxable income, and
incorrectly and will or have significantly overpaid thethe savings depends on the filer's tax bracket. A tax
IRS - AGAIN!credit directly lowers taxes by the amount of the
Mark Twain once said, "No man's life, liberty, orcredit, dollar for dollar, regardless of the filer's tax
property are safe while the legislature is in session,"bracket.
and never have truer words been spoken:Although it was a step in the right direction, The Act
On June 6, 2001, President Bush signed HR 2014 intofell far too short in providing major tax relief for
law. This created The Tuition and Fees Deduction,college families, especially in view of soaring tuition
based on Senator Charles E. Schumer's (D-NY) Makecosts and other related expenses that families
College Affordable Act. However, the presidentendure year after year. Nonetheless, the real tragedy
signed a watered down version and consequently, itis when the Tuition and Fees Deduction is taken by
doesn't work for the families who need it the most.taxpayers who qualify for The HOPE Scholarship
For many years, Senator Charles E. Schumer (D-NY)Credit or The Lifetime Learning Credit, and
tirelessly championed legislation that would allowconsequently, overpay their taxes each year their
families, including independent students, to deduct astudent is in college!
portion of their college expenses on their tax returns.Affluent single and head of household taxpayers
Originally, the Senator's proposed legislation, the Makewhose adjusted gross incomes (AGI) exceed
College Affordable Act, would have allowed millions of$51,000, and joint filers whose AGI exceeds
American families to deduct up to $12,000 per year$102,000, will not qualify for the HOPE Scholarship or
from their total incomes to help reduce the cost ofLifetime Learning Credit, and are therefore, the only
college tuition and related expenses.ones who actually benefit from taking the Tuition and
Unfortunately, to the chagrin of the Senator and toFees Deduction. Thus, camouflaged as tax relief for
the detriment of untold numbers of taxpayers withall of America's college families, what Congress
college students, HR 2014 offers a dramaticallyactually did was Robin-Hoodwink lower and middle
reduced Tuition and Fees Deduction of a mereincome families by taking from them and giving to
$3,000 for tax years 2002-2003, and $4,000, for taxthe rich!
years 2004-2006, (extended to 2007).Taxpayers only have the option of taking either the
The drastic slashing by Congress of Senatortuition deduction or one of the education credits.
Schumer's bill and President Bush's failure to send itThose families who took the deduction when they
back to them is the case in point substantiating thatqualified for either of the education credits, cost
our government doesn't give a hoot in hell about thethemselves hundreds of dollars and possible much
financial struggle the average parent endures in theirmore.
endless pursuit of the American dream for theirThink what you may about the Clinton Administration,
children.but remember, it was on his watch that the HOPE
Effective legislation to make college expenses taxScholarship and Lifetime Learning Credit were signed
deductible was long overdue and began with the Taxinto law. It doesn't benefit college families enough,
Payer Relief Act of 1997, which Senator Schumerbut it's a good start.