January 31st, 2016

TAX TIP OF THE DAY...  deduct Student Loan interest.

Deduct up to $2,500 of student loan interest as reported to you on form 1098-E.  The tricky part is that you can only deduct interest on a loan in your name.  And you can only deduct the interest if you are the one making the payments.  Another trap is that dependent students can not deduct student loan interest.

Best tax strategy...  decide who will be paying the loan back.  Structure the student loan in that person's name.  If the student will be making the payments, try to delay payments until the tax year that the parent no longer claims the student as a dependent.  This strategy may not be valid if you expect student loans to be forgiven in the future.  


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If you need tax help... www.baboiancpa.com