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posted Jun 1, 2019 10:43:17 AM

How do I apply a 1098T on a" parent plus loan" ? I pay but child is no longer a dependent? I cannot transfer loan to their name and they cannot claim expense either,

We have a parent plus school loan for my 22 year old daughter.  I get a 1098T each year and for the next 10 years.  She is no longer a dependent.  Who gets to claim it as a deduction?  

0 2 2098
2 Replies
Level 15
Jun 18, 2019 6:20:14 AM

The 1098-T has nothing what-so-ever to do with any loan. Did you mean 1098-E par chance? If so, the person named on the 1098-E can claim the interest. Since your daughter is not listed as a borrower or co-borrower on the loan she has no legal obligation to pay the loan. So she can't claim it. But consider this:

Since your interest payment is an itemized deduction on SCH A it may not make any difference at all. Remember, until the total of all itemized deductions on SCH A exceed your standard deduction, those itemized deductions make no difference in your tax liability. For 2018 the standard deduction is:

Single or MFS $12,000

MFJ - $24,000

 

Level 15
Jun 18, 2019 6:56:58 AM

Student loan interest is not an itemized deduction. It is an adjustment to income. Up to $2500 of interest can be entered on line 33 of Schedule 1 on the 2018 tax return.  It directly reduces the amount of income that is taxable.