Home loan Refinance and used to pay collage loan.

[Hunkart]

Hello all,

Last year i refinanced my home with same lander. My remaining balance for first loan was 140,000 and i refinanced for 170,000. The difference paid to school loan. I received 2 1098 form from lander. Also i received 1098-e from loan payment. I entered all documents to turbo tax. So, my question is Should i do specific booking for those documents and Is my school loan payment tax deductible?

Thanks

[MonikaK1]

It depends. If you're currently paying off a student loan, you may get Form 1098-E in the mail from each of your lenders. Your lenders have to report how much interest you pay annually. Student loan interest can be deductible on federal tax returns, but receiving a 1098-E doesn't always mean you're eligible to take the deduction. See this article for more information.

When you enter the 1098-E information in TurboTax, it will determine whether the student loan interest (not the payment) is deductible.

Enter the mortgage interest information from Forms 1098 and TurboTax will determine how much is deductible.

When you refinance a mortgage that was treated as acquisition debt, the new mortgage is also treated as acquisition debt up to the balance of the old mortgage. The excess over the old mortgage balance not used to buy, build, or substantially improve your home could previously qualify as home equity debt. For tax years prior to 2018, interest on up to $100,000 of that excess debt may be deductible under the rules for home equity debt. Beginning in 2018, only the amount of a home loan that is used to buy, build, or improve your home qualifies for the interest deduction. See this article and this one for more information.

[Hunkart]

Thanks for your response. It is very helpful.

[KrisD15]

Only the interest you paid on the student loans is deductible. 

Because you refinanced and took cash out to pay the student loan, going forward, only 82% of the interest on that home loan is considered Home Mortgage Interest which can be deducted on Schedule A  if you itemize deductions.