The Best Way To Use Student Loan Interest Deduction
Q: I paid student loan for Citi Bank in 2005. The loan was take out for undergraduate education . But right now, I am not in college . It is Undergraduate student loan( like personal loan with higher interest rate around 7.5 %) . The loan was used for education 2001-2004 . Citi bank student loan corporation didn't report this loan to IRS and don't provide 1098-E. They said that i have to fill out the special form to report to the IRS . I can calculate from my statements how much i have paid . Can I still deduct ? I paid around $1000 dollars for interest last year . Which is the best way to deduct this interest paid on educational loan for the best tax advantage ? The loan is still being paid now . How can I deduct Interest , I paid last year in 2005 tax returns ? Which section of 1040 , I can use ?
A: - I don't know what you're asking, but student loan interest can be taken on Line 33 of Form 1040. -I dont have 1098-E from the Bank and they said that they are not issuing it I have to file form to get 1098-E and reported to IRS Can I still deduct Student loan interest ? - I see your point, there is nothing to support that the interest you are paying on the credit card is for school. So, not being a tax person, I don't have the experience to know the correct answer. What I think is that if you took the interest deduction, you would be a red flag as the IRS system could not match your information that is filed by lenders to the deduction. Thus, you night be at risk for an audit. The substance of your deducation would be qualified. However, should you ever be audited, you have to adequately document that the balance on the credit card was directly related to your tuition. What would make it complicated is if you used to card to purchase non-educational related items. You would then have to have a system to track the interest directly related to the educational financing. Long story short, you are putting yourself in a difficult position and could have to argue your deduction if ever audited. I think you probably do have a valid deduction. .