Earlier this month, a friend shared this meme on Facebook:
I’m not sure where it originated, but the meme has clearly made the rounds. The above version was linked to a union-oriented Facebook page but it is stamped The Other 98 (a nonprofit organization). It’s been widely shared on a number of sites, and folks have been quick to offer their comments, including firsthand accounts of how they had been affected by the alleged tax changes.
There’s just one problem: The meme is not true. The student loan interest remains in place, and there is no tax deduction for private school tuition.
I suspect the confusion stems from the evolution of the tax reform bill. Under the House and Senate proposals, most above-the-line deductions, including the deduction for student loan interest, would have been eliminated. In the final version, however, the deduction for student loan interest was retained with the current cap of $2,500.
Similarly, tax reform expanded 529 savings plans to include public, private and religious elementary and secondary schools – but that’s not the same as a deduction. A 529 plan is a tax-favored savings plan traditionally used for college. Neither the earnings nor distributions in 529 plans are taxable for federal purposes so long as the plan is used for qualified educational expenses.
This meme, like many of those being shared on the internet, has some roots in what was true, which is why it was so easy to believe. But facts and details matter. So does timeliness: Even if part of the meme was tied to a proposed change, it’s being widely shared as though it’s true now, which is not accurate.
Not sure whether something is accurate? It’s worth doing a little digging before you believe what you see in an internet meme, and definitely before you share. When it comes to tax and budget memes and stories, consider:
- The original source. It’s always a good idea to try and locate the original source when you’re referencing a law, tax or otherwise. In this case, the meme is referring to the tax reform law, sometimes referred to as the Tax Cuts and Jobs Act (TCJA). You can read the whole thing here (downloads as a PDF).
- Trusted sources. Even when you can locate the original source, it can be tricky to navigate through to the right bits. The tax reform law, as printed, and without additional reference material is 185 pages long. If that’s too much for you to wade through, or if you need an interpretation, find a trusted source. You can read my synopsis on the tax reform law; you can also find other summaries from financial and tax journalists. Try to steer clear of sites with a definite agenda – if the source of the meme is akin to “ThePresidentStinks.com” or “PaulRyanIsAlwaysRight.com” (both of which are not actual sites as of this writing), keep looking.
- The IRS website. If you have questions about a tax deduction, credit or other adjustment, consider the IRS website at www.irs.gov. It’s not perfect, but it has a lot of good information, including FAQs, calculators and tools, and helpful publications.
- Check out a fact-checking website. Fact-checking websites like Snopes.com and Politifact.com can be useful resources for determining whether something is true or false, or somewhere in between. The information on these sites, however, may be limited to a specific question and may not be all-inclusive.
- Ask a tax pro. If you have a tax question, ask a tax professional. Don’t ask your neighbor, your mom, or your co-worker (unless those folks happen to be tax professionals). They might be wonderful people. They might be super-smart. But some of them are willing to believe which Hogwarts House they should be sorted into based on a breakfast foods quiz. While that might make them experts on wizards or doughnuts, it doesn’t mean that they know any more than you do about tax. If you want the right answers, ask the right people.
- Don’t share without confirming. Part of the reason that these memes take on a life of their own is that they are so widely and quickly shared. If you don’t know whether something is true, don’t assume that your friends do either. Take a moment to do your own homework. To quote former President Ronald Reagan, “Trust, but verify.”