How will my student loans affect my tax returns?
Heather S asked:
I am going back to school and took out some student loans to get me through it. I am wondering if these student loans will affect tax returns even though I won’t be making any payments for a coupklel more years till I graduate. Just what should I expect.
I am going back to school and took out some student loans to get me through it. I am wondering if these student loans will affect tax returns even though I won’t be making any payments for a coupklel more years till I graduate. Just what should I expect.
4 Responses to “How will my student loans affect my tax returns?”
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They won’t affect your tax returns unless you pay the interest on them.. and when you do then that is a deduction. They will send you the paperwork when it comes to tax time if you pay interest.
The interest you pay is tax deductible. If you pay no interest in a year, no deduction. They will send you a statement of how much interest you paid.
Otherwise, no effect.
Not a bit. A loan is not considered income, because it is not income. When you pay back your loan, then there is a possibility that it will affect you favorably. This is because you will have to pay interest on that loan and it could either be part of a deduction or a full deduction from your gross income, making your net income and then your taxable income smaller. That would mean that you would be paying less taxes than what you would have paid if you hadn’t had such an expense. Got it? I hope so. Adian.
Well the loan itself will not effect your tax return unless your repaying it or have defaulted…you said this isn’t the case.
However, you can still claim education expenses if they qualify. The fact that you borrowed the money doesn’t matter.
Hope this helps.