Refinanced student loan in 2017. Loan was with Navient, refi with SoFi. Navient 1098-E shows high amount for interest paid due to SoFi's payoff. How to reflect on taxes?

[chadpcarson]

The 1098-E reflects funds that were paid by SoFi when they paid off the original loan. I imagine that I shouldn't be getting an interest deduction for funds paid by SoFi.

[Coleen3]

Unfortunately, you are still limited by the amount of $2,500 per year, no mater the amount paid.

How much can I deduct?

• You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year.
• The deduction is gradually reduced and eventually eliminated by phaseout when your modified adjusted gross income (MAGI) amount reaches the annual limit for your filing status.
• For more information about the student loan interest deduction and how your MAGI affects the deduction amount, refer to IRS Publication 970.
  

[chadpcarson]

Hi Coleen, this doesn't actually answer my question. My question is relates to the fact that I didn't pay all the interest reflected in my 1098-E. It was paid on my behalf by SoFi, the lender with whom I refinanced. As I pay off the loan with SoFi, the interest paid will be deductible. I imagine that the IRS wouldn't like for me to be taking the interest deduction twice -- once when the loan was refinanced and again when I paid down the refinanced loan.

[Coleen3]

Enter the information from the 1098-E exactly as it comes to you. You can't change amounts on the official tax reporting form. If you fell it is inaccurate, you can call the issuer and request a corrected form.