Tax Papers for Student Loans

[toothfairy03]

Does it really matter if you bring your student loan info when doing your taxes?

[Navgirl]

Only if it's over $600 in interest you paid. I only paid $244 in interest last year so I am not even bothering because I won't get anything back from it. I think out of 8 years I only included my student loan info twice. It's not required to as far as I know.

[Navgirl]

Whoops, I didn't realize this was in the ask Rich thread. I just looked at my Sallie Mae infor to answer, LOL! Sorry.

[toothfairy03]

Thanks, I was gonna wait from Sallie Mae but I found out it was $264 so I wont use it.

[rcwant2be]

Yes. I claim it every year. It reduces your tax burden. From what I understand, you can't claim over $600.

Posted via Mobile Device

[J.Ski]

Originally Posted by rcwant2be Yes. I claim it every year. It reduces your tax burden. From what I understand, you can't claim over $600. Posted via Mobile Device

[Rich Lunsford]

This is a great question. Your student loan interest may be deductible even if you do not itemize your deductions and choose to use the standard deduction on your taxes! The maximum student loan interest deduction for 2008 is $2,500 (or the amount of interest paid in 2008 if lower) but the amount of the deduction will depend upon how much money you made in 2008. If your income is above $55,000 for singles and $115,000 for married, your maximum interest deduction may be reduced and eventually lost when you start making the big bucks.

The lender should send you a statement called a 1098-E if you paid them more than $600 in interest last year. You should receive it sometime in early February. Find additional details right from the IRS at http://www.irs.gov/pub/irs-pdf/p970.pdf. Start on page 28 and enjoy! They also have a handy calculator if your income is higher than the levels above to calculate the allowable deduction, but please sure to consult with your tax adviser.

The bottom line is that if you can take the deduction, do it. A $600 deduction on your taxes if you are in the 15% income tax bracket can still be as much as $90 back in your pocket. That’s a lot of money saved in my book.

Rich Lunsford is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies. Rich holds the Series 7 and 66 securities licenses. Rich also holds the designations of Chartered Financial Consultant (ChFC®), Chartered Life Underwriter (CLU®), and CHARTERED RETIREMENT PLANNING COUNSELOR (CRPC®).

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

[FreezeBaby]

very good question!!!