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1. Can I deduct collection fee incurred when I settled with my student loan lender? 2. Can I deduct collection fee settled with IRS on installment pay for back taxes?
1. I settled with a collection agency that is collecting my student loans now. The settlement / collection fee (not the principal that I am paying) is $10,000 (in addition to the principal amount of the loan). Can I deduct this $10,000 an expense? If not, can I add this amount to the principal loan ($150,000) and deduct as interest?
2. I also settled with IRS to pay taxes for 2015. Can I deduct this amount, interest, and penalty in 2016 on my tax returns?
Thank you
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June 4, 2019
12:19 PM
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Education
- Only the interest on your student loan is deductible. Other fees connected with the loan, such as late fees, collection fees, etc., are not deductible.
- There is no deduction for federal income taxes, interest or penalties.
June 4, 2019
12:19 PM
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The answer is No, No, and No. None of those expenses are deductible at all.
June 4, 2019
12:19 PM