Solved: How can I deduct interest paid on a student loan. The student is no longer a dependent
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How can I deduct interest paid on a student loan. The student is no longer a dependent

 
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Level 7

How can I deduct interest paid on a student loan. The student is no longer a dependent

If the student was a dependent when you took out the loan, and you are also legally liable for repayment (i.e. co-signor), and you actually paid the interest, then you are allowed to take the deduction for the interest paid provided you meet the overall requirements below.

There are also a few other overall rules that must be satisfied. You can claim the deduction if all of the following apply:
  • You paid interest on a qualified student loan in tax year 2016;
  • You're legally obligated to pay interest on a qualified student loan;
  • Your filing status isn't married filing separately;
  • Your MAGI is less than a specified amount which is set annually; and
  • You or your spouse, if filing jointly, can't be claimed as dependents on someone else's return.


Now, provided you meet the above criteria including being a co-signor, when you go to enter this information, make sure you select "You" when it asks you about the loan.  The question in the 1098E section is not asking whose name is on the form, it is asking whose name is on the loan (which as a co-signor would also be you).  Don't select "someone else" or it will disallow the deduction.

If you need to get to the right section - Student loan interest paid (Form 1098E) can be found in the Education section of Deductions and Credits.  You can enter this by using the search (upper right corner of your TurboTax screen) - search for 1098E (make sure enter the E because there is another form for mortgage interest that is a 1098) and click jump to 1098E.  This will bring you to the right section. 

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Level 7

How can I deduct interest paid on a student loan. The student is no longer a dependent

If the student was a dependent when you took out the loan, and you are also legally liable for repayment (i.e. co-signor), and you actually paid the interest, then you are allowed to take the deduction for the interest paid provided you meet the overall requirements below.

There are also a few other overall rules that must be satisfied. You can claim the deduction if all of the following apply:
  • You paid interest on a qualified student loan in tax year 2016;
  • You're legally obligated to pay interest on a qualified student loan;
  • Your filing status isn't married filing separately;
  • Your MAGI is less than a specified amount which is set annually; and
  • You or your spouse, if filing jointly, can't be claimed as dependents on someone else's return.


Now, provided you meet the above criteria including being a co-signor, when you go to enter this information, make sure you select "You" when it asks you about the loan.  The question in the 1098E section is not asking whose name is on the form, it is asking whose name is on the loan (which as a co-signor would also be you).  Don't select "someone else" or it will disallow the deduction.

If you need to get to the right section - Student loan interest paid (Form 1098E) can be found in the Education section of Deductions and Credits.  You can enter this by using the search (upper right corner of your TurboTax screen) - search for 1098E (make sure enter the E because there is another form for mortgage interest that is a 1098) and click jump to 1098E.  This will bring you to the right section. 

View solution in original post

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