IOW, the wealthy used to get a tax break to send junior to expensive schools.

Whitehouse Fact Sheet:

Middle class families today bear too much of the tax burden because of unfair loopholes that are only available to the wealthy and big corporations. In his State of the Union address, the President will outline his plan to simplify our complex tax code for individuals, make it fairer by eliminating some of the biggest loopholes, and use the savings to responsibly pay for the investments we need to help middle class families get ahead and grow the economy.

The President will put forward reforms that include eliminating the biggest loophole that lets the wealthiest avoid paying their fair share of taxes:

[...]

Better target and simplify tax relief for student debt and college savings

- Eliminate tax on student loan debt forgiveness under Pay-As-You-Earn (PAYE) and other income-based repayment plans. The President has worked to make student debt affordable for struggling borrowers by offering PAYE: an income-based repayment plan that lets borrowers limit student loan payments to no more than 10 percent of their discretionary income and qualify for forgiveness after 20 years of repayments. The Department of Education is currently amending its rules to extend this option to all direct student loan borrowers. However, under current law, PAYE participants who qualify for debt forgiveness after 20 years could face a large tax bill – likely a surprise to most borrowers, and for others a concern in choosing PAYE. The President’s plan would continue to propose to exempt student loan forgiveness from taxation.

- Repeal the complicated student loan interest deduction for new borrowers. The student loan interest deduction is complicated – so much so that many eligible borrowers fail to claim it – and provides very limited assistance ($100 on average) to a broad group of borrowers, rather than targeting more meaningful assistance to those borrowers struggling to afford their student loan payments. The President’s plan would retain the student loan interest deduction for current borrowers. But for new borrowers, his plan would repeal this complicated tax break and instead provide more generous and more targeted tax relief through the improved AOTC while students are in school and through PAYE once they graduate.

- Limit upside-down education savings incentives and consolidate them into a single benefit. The President’s plan would consolidate education savings incentives into one vehicle and redirect the savings into the better targeted AOTC. Specifically, the President’s plan will roll back expanded tax cuts for 529 education savings plans that were enacted in 2001 for new contributions, and – like Chairman Camp’s tax reform plan – repeal tax incentives going forward for the much smaller Coverdell education savings program.

Do you think that internet access and PCs should be deductable only for people with 529 plans?

Q. What is new this year with 529 plans?
A. A qualified, nontaxable distribution from a 529 plan during 2009 or 2010 now includes the cost of the purchase of any computer technology, related equipment and/or related services such as Internet access. The technology, equipment or services qualify if they are used by the beneficiary of the plan and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution.

Q. What does “computer technology or equipment” mean?

A. This means any computer and related peripheral equipment. Related peripheral equipment is defined as any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer, such as a printer. This does not include equipment of a kind used primarily for amusement or entertainment. “Computer technology” also includes computer software used for educational purposes.

It's mainly a racket for the rich (who are about the only people able to sock away tens of thousands of dollars for college these days). It's good that Obama is proposing to get rid of the abusive features and make the system fairer.

My $0.02.

Cheers,
Scott.

For the past two years, we could choose: traditional or HSA. The traditional plan costs more, but only slightly. With the HSA, you pay the first 4 grand for healthcare and 2 grand on top of that for meds each year entirely out of your own pocket. Then the insurance picks up the rest. The rub? The "here's your insurance, but you pay the first 6 grand for healthcare on top of the insurance premiums you're paying to cover any expenses above 6 grand" costs a whopping $100/month less than the traditional plan. Thus, the HSA is a way for us to pay a private health insurance company over 3 grand a year for absolutely nothing. In the past 55 years, I've never had a single year where my healthcare costs were over 6 grand. Now, I'm older, but the only way these HSA's make any sense at all is if

(1) You suffer a catastrophic event.
(2) You've already been diagnosed with an expensive chronic disease.

Post #398,315 by Another Scott 1/20/15 10:34:39 PM Reply	IOW, the wealthy used to get a tax break to send junior to expensive schools. Whitehouse Fact Sheet: Middle class families today bear too much of the tax burden because of unfair loopholes that are only available to the wealthy and big corporations. In his State of the Union address, the President will outline his plan to simplify our complex tax code for individuals, make it fairer by eliminating some of the biggest loopholes, and use the savings to responsibly pay for the investments we need to help middle class families get ahead and grow the economy. The President will put forward reforms that include eliminating the biggest loophole that lets the wealthiest avoid paying their fair share of taxes: [...] Better target and simplify tax relief for student debt and college savings - Eliminate tax on student loan debt forgiveness under Pay-As-You-Earn (PAYE) and other income-based repayment plans. The President has worked to make student debt affordable for struggling borrowers by offering PAYE: an income-based repayment plan that lets borrowers limit student loan payments to no more than 10 percent of their discretionary income and qualify for forgiveness after 20 years of repayments. The Department of Education is currently amending its rules to extend this option to all direct student loan borrowers. However, under current law, PAYE participants who qualify for debt forgiveness after 20 years could face a large tax bill – likely a surprise to most borrowers, and for others a concern in choosing PAYE. The President’s plan would continue to propose to exempt student loan forgiveness from taxation. - Repeal the complicated student loan interest deduction for new borrowers. The student loan interest deduction is complicated – so much so that many eligible borrowers fail to claim it – and provides very limited assistance ($100 on average) to a broad group of borrowers, rather than targeting more meaningful assistance to those borrowers struggling to afford their student loan payments. The President’s plan would retain the student loan interest deduction for current borrowers. But for new borrowers, his plan would repeal this complicated tax break and instead provide more generous and more targeted tax relief through the improved AOTC while students are in school and through PAYE once they graduate. - Limit upside-down education savings incentives and consolidate them into a single benefit. The President’s plan would consolidate education savings incentives into one vehicle and redirect the savings into the better targeted AOTC. Specifically, the President’s plan will roll back expanded tax cuts for 529 education savings plans that were enacted in 2001 for new contributions, and – like Chairman Camp’s tax reform plan – repeal tax incentives going forward for the much smaller Coverdell education savings program. Do you think that internet access and PCs should be deductable only for people with 529 plans? Q. What is new this year with 529 plans? A. A qualified, nontaxable distribution from a 529 plan during 2009 or 2010 now includes the cost of the purchase of any computer technology, related equipment and/or related services such as Internet access. The technology, equipment or services qualify if they are used by the beneficiary of the plan and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution. Q. What does “computer technology or equipment” mean? A. This means any computer and related peripheral equipment. Related peripheral equipment is defined as any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer, such as a printer. This does not include equipment of a kind used primarily for amusement or entertainment. “Computer technology” also includes computer software used for educational purposes. It's mainly a racket for the rich (who are about the only people able to sock away tens of thousands of dollars for college these days). It's good that Obama is proposing to get rid of the abusive features and make the system fairer. My $0.02. Cheers, Scott.
Post #398,316 by boxley 1/20/15 11:16:07 PM Reply	I imagine you don't like health care savings plans either the workers get tax free money to pay for government paid health plans (government employees) but the self employed get to pay taxes first then try to save for healthcare. Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 59 years. meep
Post #398,317 by Another Scott 1/20/15 11:28:01 PM Reply	I don't imagine too many self-employed people have 529s. You're right that self-employed people (and "contractors") get screwed over by the federal tax system. I remember what it was like to be a "contractor". The solution isn't to construct a tax system that the wealthy get the vast majority of the benefits from that the self-employed can also occasionally claim. HSAs are a racket, too. HSAs, a snake-oil favorite of right-wingers, are tax-sheltered savings schemes that typically come with high-deductible health insurance policies attached. If you need a doctor, you can dip into the savings account, because you’re going to have to pay thousands of dollars out of your own pocket before the insurance kicks in. But you knew I'd say that. ;-) Cheers, Scott.
Post #398,318 by boxley 1/20/15 11:44:12 PM Reply	well since the fed has decimated the savings market the only benefit is investing pre tax dollars. An HSA doesnt need to have a health plan attached. Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 59 years. meep
Post #398,337 by mmoffitt 1/21/15 10:18:19 AM Reply	I don't like HSA's. For the past two years, we could choose: traditional or HSA. The traditional plan costs more, but only slightly. With the HSA, you pay the first 4 grand for healthcare and 2 grand on top of that for meds each year entirely out of your own pocket. Then the insurance picks up the rest. The rub? The "here's your insurance, but you pay the first 6 grand for healthcare on top of the insurance premiums you're paying to cover any expenses above 6 grand" costs a whopping $100/month less than the traditional plan. Thus, the HSA is a way for us to pay a private health insurance company over 3 grand a year for absolutely nothing. In the past 55 years, I've never had a single year where my healthcare costs were over 6 grand. Now, I'm older, but the only way these HSA's make any sense at all is if (1) You suffer a catastrophic event. (2) You've already been diagnosed with an expensive chronic disease.

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