Congress Extends Tax Deduction For
Millions of College Families
For some a gift – For
many the Grinch
by Reecy Aresty
College Admissions/Financial Aid Expert and Author
Thanks to a last minute
effort by Congress made last December, President Bush extended the Tuition
and Fees Deduction for one more year. However, while the opportunity has
been viewed as a yearlong Christmas present for some of the 4.7 million
families with students in college, for many – all that glitter won’t
produce any gold!
As luck would have it, the Tax Relief and
Health Care Act of 2006, which revived the Tuition and Fees Deduction, has
three roadblocks obstructing taxpayers:
1. For those who are eligible to take the
deduction, there is nothing on the 1040 indicating how or where to take
it;
2. Those unaware of it, and most families
are, will miss the opportunity entirely; and
3. Hundreds of thousands of taxpayers who
previously took or will take the deduction would save substantially more
by taking an Education Credit instead!
For a taxpayer to actually take the
deduction, they must physically write in a ‘T’ on Line 35 of the 1040, and
if they are also claiming a deduction for ‘Domestic production
activities,’ they must also write in a ‘B’ and “attach a breakdown showing
the amounts claimed for each deduction."
According to an IRS spokesman, Publication
600, which explains in detail how to take the Sales Tax Deduction, will be
mailed to the 3.5 million households who took it last year. However, this
document makes no mention of how to take the deduction for educator
expenses (on Line 23 write in ‘E’), and noticeably absent is any reference
to the subject in question.
As usual, misinformation is rampant as
demonstrated by this quote from an AP story: “The
IRS said the deduction for tuition and fees can be claimed on Form 1040,
line 35, ‘Domestic production activities deduction,’ by entering ‘T’ on
the dotted line to the left of that line.”
Regrettably, there are no dotted lines for
Line 35 – they’re on Line 34 and Line 36! And with 4.7 million families
affected, there is no way to guarantee that everyone who is entitled to a
deduction will actually receive it. Only time will tell, and families will
have three years to amend returns, but only if this information reaches
them in time…
About The Author:
Reecy Aresty has been a financial advisor since 1977, and
is founder and president of College Assistance, Inc., located in Boca
Raton, Florida. He is the author of the critically-acclaimed, How To Pay For College
Without Going Broke, an invaluable, parent/student
manual. Arguably the most revealing book ever
written on college admissions and financial aid, it is the only book of its
kind also available in Spanish.
Reecy has been
interviewed by financial experts on radio and television, and by many of
the nation's most respected publications including Money Magazine, US
News & World Report, Bloomberg News, Scripps Howard, The Washington Post,
financial icon Terry Savage for the Chicago Sun-Times,
Consumers Digest, The Education Times and AOL. An Internet search for
Reecy Aresty will result in thousands of links to sites all over
the world that feature his articles, advice and methods. Recently, he
created the College Information Network™,
which includes The High School Blog, The College Blog, PayLess For
College and The Way To College.
For almost three
decades, Reecy has helped thousands of families send their kids to the
college of their choice for less than they ever dreamed possible.
The critics agree. The way to college is Reecy Aresty's, How To Pay For
College Without Going Broke. It reveals the trade secrets and insider
information our colleges, universities and the federal government don't want you to know. For
further information on the best college funding book on the market today,
click here. For more information on admissions and
financial aid - Ask Reecy!
