Student Loan Debt Relief Eligibility

[tkcam]

Hello,

So by looking at the application for student debt relief, if my individual AGI for either 2020 or 2021 was under $125k, and I filed married filing jointly with total income above $250k, I will need to Re-file to married filing separately, in order to qualify for my Individual $10k of Loan Forgiveness..

Would that be correct ?

[xmasbaby0]

The tax laws do not allow you to amend from a joint return to separate returns after the filing deadline.

[Critter-3]

@xmasbaby0 

Bingo ... that answers that question on trying to go around the loan forgiveness rules.  So if you have already filed a joint return amending to file separately to get the loan forgiveness is not possible.  

[tkcam]

Thx. 
what about not amending the status, 

but amending from itemized to standard deduction. 
Would that move the charitable contributions to before the AGI line ?

[Critter-3]

That would not work on the 2021 return ... 

But could be done on the 2020 return but will the $300 adjustment actually be enough ???

[tkcam]

Why would the adjustment only be $300 on the 2020 return ?

[Critter-3]

Because that was the law for the 2020 return ... in 2021 it was increased to 600 for married couples.   Please read the 1040 instructions for clarity.

[tkcam]

OK.  Thank you..

For Schedule 1, Tuition and Fees Deduction, and Student Loan Interest Deduction, Are there Income limits where those are phased out  ?

[Critter-3]

Yes ... if you read the form instructions for those items  you will see those have always had an income phase out which the TT program does automatically. 

[tkcam]

Ok..

So basically, If I am $3,000 over the $250k AGI limit for Married filing jointly, it seems as if there is no way to get below there, and therefore not qualify for forgiveness, for 3 separate student loans.   

Loans in my name, Loans in my wife's name, and loans in my daughter's name, who is a current senior in college.

Any thoughts or ideas on how to reduce AGI by $3,000 ?

[tkcam]

To confirm, it looks like there is no way to reduce AGI by roughly $3,000, would that be correct ?

[Critter-3]

Nope.   Not after the end of the tax year. 

Now the daughter ... she may be eligible even if she was a dependent ... check the application on the DOE website. 

[tkcam]

It seems as if dependents go by parents income   

[tkcam]

If I would have known about the final limit, I could have contributed extra to either 401k or Traditional IRA by April 15, to reduce AGI, correct ?

[Critter-3]

Hindsight is 2020.