I have two different providers for my loans. From one, they sent me a 1098-E as it was past the $600 dollar reporting limit. The other was under said limit. I have the letter with the amount of interest paid to them but when using TurboTax, do I just enter the total amount of interest paid for both and just keep the information with my Taxes in case of an audit?
No, you do not just enter the total amount on one 1098-E.
If you have both the 1098-Es from two different loan providers, you should enter the numbers from both forms separately in the program. After you complete each 1098-E section, the two amounts will be added up and transferred onto the final Form 1040 line 8. Although one of the 1098-E 's amounts falls below the reporting requirement of $600, as long as the total number matches the sum of the two 1098-E amounts and shows correctly on Form 1040, you will be okay. It is always recommended to keep all your records for substantiation.
Please note that 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. See image below (IRS publication 970 p. 35 Publication970)
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Only the total amount of interest will appear on your tax return, but just to keep your own records straight, enter each loan separately. All you have to enter is the lender's name and the amount. Enter it the same way whether or not you actually got a 1098-E.
You should always keep all the relevant information with your tax records.
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