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Posted

I consolidated my two student loans this year. In previous years, when I was doing my taxes, I would deduct my student loan interest paid (as reported by the two 1098-E forms sent to me by my lenders) when I was doing my taxes. Now that I consolidated my loans, I again received two 1098-E forms, but one form has a large $ amount in the "Student Loan Interest Received by Lender" box, because that is the lender that was paid off in the consolidation.

Am I able to deduct that large student loan interest amount, even though I did not actually pay that much in student loan interest this year.....I just had one lender pay off my other lender in order to consolidate? (Just to qualify the large $ amount....it close to equals the max deduction allowed of $2,500.) Anyone??

Thanks,

-P

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Posted

Yes! There is no problem if you file you are single.

Yes! There is no problem if you file married filing jointly.

No! There is a problem if you file married filing separately. (but there are ways to bypass that)

From a friend:

"If you want to get around filing married and separately for taxes do your taxes ASAP (you'll want to go to a tax person like H&R or Jackson Hewitt) get your SO to send you a paper that states exactly how much they made this past year. Then apply for an ITIN with your taxes-- it's a tax id for those who are not USC who make foreign income. On this return you'll apply for the ITIN and file JOINTLY-- they have a way to just enter a random number in anticipation of an ITIN into their computer. THEN you'll file jointly and do this thing called "foreign income exclusion" where you'll not count anything your SO made on your taxes. This will then mean you're filing joint and only counting your income-- you may drop having to pay taxes altogether! It makes a nice proof for immigration as well.

This may also help you with your fafsa. If you did file as married on your fafsa and not count their income then there is that clause you can do-- it asked you about how many in your household, and since they aren't legally part of it as they lives abroad their income is also excluded. But anyway, this way you have the taxes to back it as well. I hope this helps some."

I consolidated my two student loans this year. In previous years, when I was doing my taxes, I would deduct my student loan interest paid (as reported by the two 1098-E forms sent to me by my lenders) when I was doing my taxes. Now that I consolidated my loans, I again received two 1098-E forms, but one form has a large $ amount in the "Student Loan Interest Received by Lender" box, because that is the lender that was paid off in the consolidation.

Am I able to deduct that large student loan interest amount, even though I did not actually pay that much in student loan interest this year.....I just had one lender pay off my other lender in order to consolidate? (Just to qualify the large $ amount....it close to equals the max deduction allowed of $2,500.) Anyone??

Thanks,

-P

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Posted

My husband is here w/ me, so we'll be doing the "Married filing jointly" thing. My question was whether I can actually deduct the interest if if was technically not paid by me...it was paid by the lender during the consolidation. That's what I wasn't sure if I could deduct when doing my taxes.

Thanks for your help, though. :)

-P

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Posted
My husband is here w/ me, so we'll be doing the "Married filing jointly" thing. My question was whether I can actually deduct the interest if if was technically not paid by me...it was paid by the lender during the consolidation. That's what I wasn't sure if I could deduct when doing my taxes.

Thanks for your help, though. :)

-P

Was the interest that they paid included in the amount of the loan offered to you? I really doubt they would pay that remaining interest for you. They probably just included it in your balance.

If it was included in your initial balance, you most certainly can deduct it. If they are picking up the check for you, I'd be careful, but I doubt they're doing that.

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Posted
My husband is here w/ me, so we'll be doing the "Married filing jointly" thing. My question was whether I can actually deduct the interest if if was technically not paid by me...it was paid by the lender during the consolidation. That's what I wasn't sure if I could deduct when doing my taxes.

Thanks for your help, though. :)

-P

Was the interest that they paid included in the amount of the loan offered to you? I really doubt they would pay that remaining interest for you. They probably just included it in your balance.

If it was included in your initial balance, you most certainly can deduct it. If they are picking up the check for you, I'd be careful, but I doubt they're doing that.

The interest was included in my initial balance and in the amount of the loan offered to me.....good to know that I can deduct it. Thanks!

Thanks,

-P

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Posted

Assuming that your lender hasn't made a mistake with the 1098, you did pay that much in interest before the loan was consolidated. If you made payments, chances are, you paid plenty of interest. Unless I'm misunderstanding the question...

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Posted

You should be able to deduct it, yes. I consolidated this year as well, and used info from both 1098's.. For me, it was an accurate representation of what I actually PAID, though. You might want to double-check with your lender to make sure the number is correct. The interest received (even if from another lender) wouldn't typically exceed what you paid in, unless your monthly payment was lower than compounded interest (obviously), or you had an excessive amount of interest accumulated from a deferral period. Is it possible that they have misplaced a value when calculating this amount?

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Posted

hmmm... http://www.aamc.org/students/financing/deb...atters/slid.htm Section MM341 seems to confirm this in not-crystal-clear explanation.

Love timeline:

??? 2003 -------> Started chatting regularly, became good friends

Nov 2004 -------> Fell in love

Jan 2006 -------> Met (in person) for first time

Apr 2008 -------> Wedding

Jun 2008 -------> Closed on house together

K-1 timeline:

Jun 11, 2007 -------> I-129f sent

Mar 20, 2008 -------> Visa in hand

AoS/EAD/AP timeline:

Apr 26, 2008 -------> Wedding

Apr 28, 2008 -------> Filed (forms mailed)

Apr 30, 2008 -------> Forms received by USCIS

May 06, 2008 -------> Cashed check posted to account

May 10, 2008 -------> NOA1 received for EAD, AP, and AoS

May 10, 2008 -------> Biometrics appt date received

May 28, 2008 -------> Biometrics for EAD & AoS

Jun 11, 2008 -------> AoS case transferred to CSC

Jul 05, 2008 -------> AP Approval

Jul 09, 2008 -------> EAD approval

Jul 14, 2008 -------> EAD and AP received

Jul 17, 2008 -------> AoS approved (card production ordered)

Now for my obnoxious signature Meez©:

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Posted

Also, check out http://www.onesimpleloan.com/loan_consolidation_benefits.asp , question 5. Note, of course, that given your income level and other factors, you may not be able to claim ALL the interest paid (as with my case).

Sorry, didn't mean to flood.

Love timeline:

??? 2003 -------> Started chatting regularly, became good friends

Nov 2004 -------> Fell in love

Jan 2006 -------> Met (in person) for first time

Apr 2008 -------> Wedding

Jun 2008 -------> Closed on house together

K-1 timeline:

Jun 11, 2007 -------> I-129f sent

Mar 20, 2008 -------> Visa in hand

AoS/EAD/AP timeline:

Apr 26, 2008 -------> Wedding

Apr 28, 2008 -------> Filed (forms mailed)

Apr 30, 2008 -------> Forms received by USCIS

May 06, 2008 -------> Cashed check posted to account

May 10, 2008 -------> NOA1 received for EAD, AP, and AoS

May 10, 2008 -------> Biometrics appt date received

May 28, 2008 -------> Biometrics for EAD & AoS

Jun 11, 2008 -------> AoS case transferred to CSC

Jul 05, 2008 -------> AP Approval

Jul 09, 2008 -------> EAD approval

Jul 14, 2008 -------> EAD and AP received

Jul 17, 2008 -------> AoS approved (card production ordered)

Now for my obnoxious signature Meez©:

0605_10033471973.gif

Posted

I had two different loans, one w/ the Dept of Education and one w/ a private lender. I consolidated the two loans, w/ the Dept of Education absorbing the private lender loan. As an example, lets say the total amount I owed to the private lender was 15K, of which 2.4K was interest. So this 1098-E I received from the private lender shows that 2.4K was paid in interest this year, b/cuz this is the year that the consolidation occurred. I received a 1098-E from the Dept of Education too, but I can't use the two together because it would exceed the 2.5K maximum student loan interest deduction allowed. I was just confused as to whether I could use that 1098-E as a deduction from my income subject to tax? I've read the IRS publication 970 that pertains to this, I'm just still fuzzy on it. :unsure:

Thanks for everyone's help!

-P

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