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The new tax laws that are supposed to help the vast majority of Americans decrease their tax liability seem to have overlooked one major deduction that affects everyone with a child in college or attending college themselves.
On Dec. 31, 2016, the deduction for college tuition and expenses expired.
While there are other tax credits applicable, losing this deduction adds directly to adjusted gross income and increases the income on which you are taxed, directly offsetting any tax cuts received.
The tax rate deduction for too many of us will easily be eliminated when $15,000 to $20,000 in additional income is now taxable. For those with multiple children in college it gets worse.
Do the math: If your AGI increases $20,000 and your tax rate is 15 percent, that is an increase of $3,000.
If you make $100,000 and get a 3 percent reduction, it is a net zero.
I don’t know how the numbers work out for anyone but me, but I know this omission is going to cost me several thousand dollars, offsetting more than the tax decrease.
So when you get that 1098 in the mail and enter it into your tax return to no avail, contact your congressman and ask why.
It is not too late to reinstate this deduction for 2017.
This is not a Republican/Democrat issue, so when the comments start flying, remember it is about individuals who are being hurt by losing this deduction. I am fairly certain we are all equally affected.