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Author Topic: Are any of the private loans tax deductible?  (Read 1630 times)

Bahamut

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Are any of the private loans tax deductible?
« on: April 28, 2005, 10:18:05 PM »
Yes/No/Maybe So
SMU Fall '05

michaelduke

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Re: Are any of the private loans tax deductible?
« Reply #1 on: April 28, 2005, 10:29:14 PM »
Yes/No/Maybe So

CPAs here should know for sure. 

But I do not think it really matters because I think there is a ceiling on how much you can deduct on your tax return for school loans.  You will have stafford loans in addition to your private loans, right?  Your deductions are probably maxed out on the stafford alone. 

rhapsody

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Re: Are any of the private loans tax deductible?
« Reply #2 on: April 28, 2005, 10:36:23 PM »
The limit is $2500/year total no matter what kind of loan you have.

Are we there yet?

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Re: Are any of the private loans tax deductible?
« Reply #3 on: May 02, 2005, 10:45:15 AM »
Also remember there was a code change a few years back. It used to be that you could deduct student loan interest for up to 5 years. The code has since been changed, and now allows indefinite deduction of student loan interest, as long as your adjusted gross income is less than $50K for a single taxpayer and $100K for those married filing jointly (MFJ). For single filers with AGI between $50K and $65K ($100 K and $130K for MFJ), your ability to deduct student loan interest is limited, with the deduction declining as you approach $65K (or $130 K for MFJ). Once your AGI exceeds either the $65K($130K for MFJ) your student loan interest is no longer deductible, regardless of the amount. The most practical way around this is to take some kind of tax-deductible home equity loan and pay off some or all of the student loans. Obviously you'd have to own a home to do this, and you would need a significant amount of equity. 

Oneof2

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Re: Are any of the private loans tax deductible?
« Reply #4 on: May 02, 2005, 10:53:30 AM »
up to $2500k is deductible as is any early repayment of interest