• Home
  • Contact Us
  • Privacy & Policy
Sunday, May 22, 2022
Finances Advise
No Result
View All Result
  • Home
  • Business
  • Commodities
  • Crypto News
    • Block chain
    • Bitcoin
    • Ethereum
    • Litecoin
  • Finance
    • Financial Advisors
    • Personal Finance
    • Market Insider
  • Forex
  • Investing
  • Stocks
  • ICOs
  • Trading
  • Home
  • Business
  • Commodities
  • Crypto News
    • Block chain
    • Bitcoin
    • Ethereum
    • Litecoin
  • Finance
    • Financial Advisors
    • Personal Finance
    • Market Insider
  • Forex
  • Investing
  • Stocks
  • ICOs
  • Trading
No Result
View All Result
Finances Advise
No Result
View All Result
Home Personal Finance

Student loan borrowers could have a higher tax bill this year

by admin
March 26, 2021
in Personal Finance
0
152
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter


Student loan borrowers may see more relief still in the pandemic.

ViT Postman | iStock | Getty Images

Many people with federal student loans won’t be able to claim a popular deduction on their taxes this year.

Around 12 million taxpayers take advantage of the break known as the student loan interest deduction, which allows borrowers to subtract up to $2,500 a year in interest payments they’ve made on their private or federal student loans from their gross income, lowering their tax liability.

The student loan interest deduction is “above the line,” which means you don’t need to itemize your taxes to qualify for it. There are income phase-outs, though, and individuals who earned above $85,000 and couples who made more than $170,000 in 2020 are not eligible at all.

More from Personal Finance:
About 127 million $1,400 stimulus checks have been sent
Using tax-deferred savings can help you get that $1,400 stimulus check
How to make sure you don’t miss $1,400 stimulus checks in the mail

Your lender is supposed to report your interest payments to the IRS on a tax form called a 1098-E, as well as provide you with a copy. You claim the deduction on line 20 of Schedule 1.

In most years, you can save up to $550 a year by doing so.

This year will be different, though.  

Since March 2020, the government has given most federal student loan borrowers the chance to pause their monthly bills without interest accruing. President Joe Biden has extended that break until the end of September.

No payments will mean no tax break for many.

“You can claim the student loan interest deduction based only on amounts actually paid,” said higher education expert Mark Kantrowitz.

Because the interest on most federal student loans has been paused, even if you’ve continued making payments during the Covid pandemic you likely still won’t be able to claim the full deduction because your money has been going directly to your debt’s principal. The break is only for payments to interest.

Still, not all is lost. And some people will still be eligible.

The payment pause and interest waiver for most federal student loan borrowers didn’t begin until March 13, 2020. That means that you may have made payments to your loan’s interest for two or three months of the year that you can still deduct from your gross income.

In addition, if you owe student loans that haven’t been eligible for the government’s break, including the Federal Family Education Loan Program or any private loans, you may have made interest payments that can be deducted.

Of course, for those struggling during the pandemic, the loss of the tax break will mean little compared with the relief they’ve gotten from not having to pay their student loans. The average bill is $400 a month.

For others, it’ll just mean a higher tax bill.

“It is an example of how the government gives with one hand while taking back with the other,” Kantrowitz said.

Tags: billborrowersbusiness newsGovernment taxation and revenuehigherJoe BidenloanPersonal financePersonal loansPersonal savingPoliticsStudenttaxyear
  • Trending
  • Comments
  • Latest

A 48-year market vet warns that the Fed will be forced to tighten policy ‘way sooner’ than investors anticipate as inflation continues to soar — triggering a stock market crash of up to 80%

August 28, 2021
27-year-old UG graduate now millionaire proposes to girlfriend on b’day in video

27-year-old UG graduate now millionaire proposes to girlfriend on b’day in video

August 9, 2021

‘It’s begging to be destroyed’: A stock trader who says he made more than $100,000 shorting the market during the 2008 crash just bet against the S&P 500 — and warns there’s a ‘fair chance’ stocks are about to drop 25%

September 11, 2021

Stocks tanked in the first quarter, and new research shows there should be a reversal by the end of June

April 15, 2022

Cryptocurrency Is ‘Worthless,’ European Central Bank President Says | Bitcoinist.com

0

Uber Hacking: Customers Not at Risk of Financial Crime, Says Minister

0

Black Friday Merchants Look to Extend Moment of Retail Optimism

0

Hotshot Snapchat Founders Face a Dilemma: Lie Low or Live Large?

0

Cryptocurrency Is ‘Worthless,’ European Central Bank President Says | Bitcoinist.com

May 22, 2022

Prices are surging, but people are still paying top dollar to watch live sports

May 22, 2022
Japan’s finance minister spoke on the falling yen – “sharp forex strikes” | Forexlive

Japan’s finance minister spoke on the falling yen – “sharp forex strikes” | Forexlive

May 22, 2022

Stock Market Plunge: 3 Beaten-Down Growth Stocks to Buy Now and Hold Forever | The Motley Fool

May 22, 2022

Recent News

Cryptocurrency Is ‘Worthless,’ European Central Bank President Says | Bitcoinist.com

May 22, 2022

Prices are surging, but people are still paying top dollar to watch live sports

May 22, 2022

Categories

  • Bitcoin
  • Block chain
  • Business
  • Commodities
  • Ethereum
  • Financial Advisors
  • Forex
  • Investing
  • Litecoin
  • Market Insider
  • Personal Finance
  • Stocks

Site Navigation

  • Home
  • Contact Us
  • Privacy & Policy

We bring the Best and latest Crypto News

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.

No Result
View All Result
  • Home
  • Business
  • Commodities
  • Crypto News
    • Block chain
    • Bitcoin
    • Ethereum
    • Litecoin
  • Finance
    • Financial Advisors
    • Personal Finance
    • Market Insider
  • Forex
  • Investing
  • Stocks
  • ICOs
  • Trading

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.