Friday, July 2nd, 2010

Question about Tax Returns. Can I use my Student Loans for a Tax Credit. How does that work?

tax credit
Agent 47 asked:


In my Student Loan accounts it says that I will be able to use a reportable tax interest form 1098E. Does that mean I can use my loan repayments as a tax credit or deductible? By the way, My loans are currently on Forbearance.

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2 Responses to “Question about Tax Returns. Can I use my Student Loans for a Tax Credit. How does that work?”

spicertax Says:
July 4th, 2010 at 6:22 pm

You can deduct the loan interest shown on the Form 1098. That may not be all of your loan payments since loan principal is not deductible.

Griffin Says:
July 5th, 2010 at 2:26 pm

If you receive a 1098, it will tell you want you can report on your taxes. That amount is technically not a deduction, it is an adjustment to your income. It would be entered on line 33 (of form 1040) or line 18 (of 1040A). It will reduce you overall taxable income in a manner similar to a deduction. See page 30 of the attached pdf link from the IRS.

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