<< Back to all Blogs
Login or Create your own free blog
Layout:
Home > Tax deductibility of private student loans?

Tax deductibility of private student loans?

January 7th, 2008 at 09:04 am

I am wondering if you can deduct accrued interest or only paid interest on these? I'm pretty sure it would be paid interest only, but I figure there might be some people out here with experience on it. I'm also wondering if you can make extra payments on them, since the payments seem to be more rigidly structured than most loans,

Posted in General | 3 Comments »

3 Responses to “Tax deductibility of private student loans?”

  1. Dido Says:
    January 7th, 2008 at 10:50 pm 1199746204
    1199746204

    If you can find a copy of JK Lasser's 207 Tax Guide, look at pg 557. Here are relelvant quotes from this page:

    "Loan origination fees and capitalized interest (unpaid interest that accrues and is added to the balance of the loan) can be counted as interest." But I don't think you can count it until you actually PAY it.

    "Voluntary interest payments are deductible."

    Of course, this is not professional tax advice (I do taxes, but as a volunteer through VITA, not professionally.)

  2. Dido Says:
    January 8th, 2008 at 01:26 am 1199755612
    1199755612

    PS You should get Form 1098-E from the insitution to whom you paid the interest. They will report the amount of interest you paid in Box 1 and you just put that in the Student Loan interest worksheet that's in the Form 1040 instructions.

    The official IRS answer to your question is at http://www.irs.gov/publications/p970/ch04.html#d0e4976

  3. jIM Says:
    January 1st, 2009 at 06:53 pm 1230836034
    1230836034

    Yes private loans are deductable.

    There are education credits which might get you back more money than the interest deduction. Who does your taxes?

Leave a Reply

(Note: If you were logged in, we could automatically fill in these fields for you.)
*
Will not be published.
   

* Please spell out the number 4.  [ Why? ]

vB Code: You can use these tags: [b] [i] [u] [url] [email]