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@OnCashFlow3 жыл бұрын
CORRECTION: At 7:42 I mistakenly said "22% of $2,500 is how much you will pay in actual taxes" but "pay" should be replaced with "save". Sorry for any confusion this may have caused.
@emilyacoxpsychic2 жыл бұрын
I made over $100,000 though - Do I still qualify??
@OnCashFlow2 жыл бұрын
@@emilyacoxpsychic If you are single then that means you might be sre completely phased out if your MAGI is above 85k.
@CCJJ160Channels2 жыл бұрын
1.) Great video thanks for the straight forward explanation; and 2.) It seems like the interest deduction on student loans if ridiculously low when compared for mortgages or business losses.
@OnCashFlow Жыл бұрын
Thanks! The student loan interest deduction is actually "above the line" though meaning you don't need to itemize your taxes. For mortgage interest, you must itemize your taxes. For business interest, you deduct from your profit (which reduces taxes the most because of SE tax + income tax).
@alexgarcia62672 жыл бұрын
Awesome breakdown
@OnCashFlow2 жыл бұрын
Thanks, Alex! I'm glad it was helpful for you! I hope you find some of my other videos just as helpful! :)
@hescobar542 жыл бұрын
Can you talk about the phase out table
@OnCashFlow2 жыл бұрын
If you use the IRS tool it should help you a lot with letting you know how much you can deduct: www.irs.gov/help/ita/can-i-claim-a-deduction-for-student-loan-interest
@sugar-pill3 жыл бұрын
What if during the pandemic you only attended college, did not work, therefore, only have the 1098T form, in addition to claiming Recovery Rebate Credit stim-funds on the 2020 tax form? This is my dilemma. Thank you, for your tax help.
@OnCashFlow3 жыл бұрын
Well I can't give tax advice, but here is what I think: The stimulus funds are not taxable, so no problem there, if you didn't receive it during the right time, then you fill out the rebate credit form. If you have no income, then the student loan tax deduction can't reduce your taxable income (if you don't have any taxable income). Still report your 1098-T you might be able to get an education tax credit. You could probably use a user friendly software like TurboTax for free based on lower income. I hope this helps, please let me know if you need clarification!
@katie92423 жыл бұрын
what about phase-out rule?
@OnCashFlow3 жыл бұрын
Sorry if I forgot to include that! It should currently be phaseouts above 70k for single and 140k for MFJ.
@LA-tk2pi3 жыл бұрын
I have no earned income for the tax year for the year but I was paying off student loans, what will happen when I file my taxes?
@OnCashFlow3 жыл бұрын
That depends on if you have other income that is taxable. If you have a low enough amount of taxable income then you won't owe any taxes.
@zackc87053 жыл бұрын
For 2021 I paid off $6,000 in Perkins loans while in the grace period before interest started to accumulate and I plan on paying my remaining $4750 Stafford loan off in Sept of 2021 before the national forbearance is up. Will I be able to claim any deduction if I did not pay interest in 2021 ? Looking ahead for 2021 taxes
@OnCashFlow3 жыл бұрын
First off, congratulations! That is awesome! It is my understanding that you can only deduct student loan interest paid. So if none of the loan payoffs included interest, then no adjustment to your income.
@orangemoon24443 жыл бұрын
Hi! If I did not reach the income limit of $70,000, does it mean that I can receive a full deduction (how much I pay for the interest would be how much it could be deducted)?
@OnCashFlow3 жыл бұрын
Yes, it should mean that if your income was
@orangemoon24443 жыл бұрын
@@OnCashFlow Thank you for you help!!
@OnCashFlow3 жыл бұрын
@@orangemoon2444 Anytime! :)
@EMVelez4 ай бұрын
Does this deduction also apply for people with self employment income?
@OnCashFlow4 ай бұрын
Yes, if you pay qualified student loan interest, it doesn't matter if you are self employed or W-2 employed.
@sugar-pill3 жыл бұрын
What's the difference between 1098-T and 1098-E. Do you claim one and not the other?
@OnCashFlow3 жыл бұрын
1098-T is a tuition statement and 1098-E is a student loan interest paid statement. You should report both on your tax return if you received both.
@vijaykakara42863 жыл бұрын
Can I take the deduction when I have my loan is in an other country?
@OnCashFlow3 жыл бұрын
I believe it is possible that you can take the deduction even if your loan was from another country i it meets the other requirements (I can't give tax advice) but You should read it directly from the IRS and seek help from a professional: www.irs.gov/publications/p970#en_US_2020_publink1000178237
@emilyacoxpsychic2 жыл бұрын
I just got that form after I paid off a student loan debt and mine says $19,600! Can I hire an attorney to get me that full amount since there’s some kind of $2500 cap?!
@OnCashFlow2 жыл бұрын
The total loan amount may have been $19,600, but only the interest is deductible. Not the principal. I highly doubt you paid 19k interest lol.
@emilyacoxpsychic2 жыл бұрын
@@OnCashFlow No, it is 100% interest .i just paid off a $100,000 loan debt settlement!!!
@emilyacoxpsychic2 жыл бұрын
No, it is 100% interest .i just paid off a $100,000 loan debt settlement!!!
@emilyacoxpsychic2 жыл бұрын
So can I write off the full $19,000??? I heard there is a limit of $2500. How can I get the full $19,000?
@OnCashFlow2 жыл бұрын
@@emilyacoxpsychic I stand corrected, wow! That must feel like a big load off your shoulders to have that paid off, congratulations!
@fishincognito Жыл бұрын
If the 1098-E is in the parents name but the student files their own taxes (not a dependent), can the student claim the interest?
@OnCashFlow Жыл бұрын
It should not be in their name if you are considered independent. If you are an independent student then I would try to get that changed to have your name on the form. If you are the one paying the interest and the loans are in your name then you should be deducting (assuming eligible).
@minamikhaeil9314 Жыл бұрын
Can i used foreign income tax credit to pay my fedral student loans!?!
@OnCashFlow Жыл бұрын
No, I don't think so since it is a non-refundable tax credit.
@erickm20107 ай бұрын
Say you paid ALOT more than $2,500 in interest one year. can you continuously claim the $2,500 in the following years until you reach what you have truly paid in interest? for example if I paid 10k in interest in 2023. Can I claim 2.5k for the next 4 years for the interest I paid in 2023?
@OnCashFlow7 ай бұрын
No, it doesn't carry forward. If you paid 10k in interest in 2023, then you can only claim 2.5k. In 2024, you can only claim what you paid up to 2.5k again in that year.
@TheTbabylati3 жыл бұрын
How do you just pay interest on it without paying the whole thing?
@OnCashFlow3 жыл бұрын
Hi Alex, I think you are asking if you can just pay the interest on student loans without paying down the principle? To that I would have to say generally no, because they means you wouldn't be properly making your payments. Unless you have some kind of forgiveness or forbearance, you have a set payment that you are supposed to pay. I hope this helps answer your question.
@TheTbabylati3 жыл бұрын
@@OnCashFlow gotcha. But paying the principle doesn’t count for the 1098 right?
@OnCashFlow3 жыл бұрын
@@TheTbabylati No, that is for the interest you paid only.
@rshnrocks3 жыл бұрын
@@OnCashFlow Can loan pre-payment counted towards this tax deduction?
@OnCashFlow3 жыл бұрын
@@rshnrocks I Believe only if the prepayment included prepaying interest. However, generally if you make prepayments then you are paying 100% extra principal, which would not be deductible.
@riccardocarbo24793 жыл бұрын
At 7:48, you say that's how much I'll PAY when it fact that's how much I'll save. Are you editing this video, or did I miss something. Neither would surprise me.
@OnCashFlow3 жыл бұрын
Hello Richard, If you paid $2,500 in student loan interest and you were in the 22% tax bracket then it saves you $550 on your tax bill. Please help me understand the confusion? Did I misspeak in the video?
@riccardocarbo24793 жыл бұрын
@@OnCashFlow At 7:28 to 7:48, I hear you saying that $550 is how much I'll pay, but since it's a deduction, shouldn't it be how much I save? That's how I'm hearing and interpreting what you have said. I have listened to it 4 times over to be sure, and I can only think you've misspoken. But the words "pay" and "save" can create quite a struggle to understand for the novice ear if they were flipped around in error by the speaker. Replay that section and see if it says what you intended. Feedback appreciated. Thanks. --Rich
@OnCashFlow3 жыл бұрын
@@riccardocarbo2479 Ohhh. Yes, I did say "Pay" Instead of "Save". I'm sorry about that! Immediately after that at 7:55 I said "save" correctly, so at least there's that haha. Just to clarify one more time. In that case, yes you would SAVE $550 on your tax bill! Sorry for my misspeaking Richard, I hope this comment helps clarify things for you.
@riccardocarbo24793 жыл бұрын
@@OnCashFlow I do find it interesting, after 1,365 views, no one has spoken up about it. I guess most people figure it out themselves and say nothing of it. At first I assume I've heard it wrong since I am hear to learn, not teach, and the I struggle to make it make sense. Failing that, I'm asking questions. I eventually assumed you misspoke, and thank you for replying in kind. However innocent, a small snag like this can really consume a lot of energy versus helping or saving. I do hope you edit your future stuff carefully. With taxes, errors of any kind can get painful. Thanks.
@OnCashFlow3 жыл бұрын
@@riccardocarbo2479 I'm glad that you asked the question. Someone with the same questions should now find your comments. I apologize for the errors, I never want to mislead or give false information. I will do my best to ensure better editing. Thank you, Richard.
@hescobar542 жыл бұрын
My daughter made 175,400 the total interest is 6,000, can she deduct the 2,500
@OnCashFlow2 жыл бұрын
I think that income level is too high for the deduction, good for her! :)
@loisdo4889 Жыл бұрын
If i paid $1900 on interest, so how Much should i claim 1900 or 2500?
@OnCashFlow Жыл бұрын
Assuming you qualify for the deduction, you claim how much you paid up to the maximum. So you would claim $1,900. $2,500 is the max anyone can claim. For example if someone paid $3,000 in interest, they could still only deduct $2,500. Hope this helps!
@HenryAllen049 ай бұрын
@@OnCashFlow in this same example could this person claim the other $500 on next year's taxes?
@OnCashFlow9 ай бұрын
Good question, but unfortunately, no. As far as I know, student loan interest cannot be "carried forward"@@HenryAllen04
@Bizzaro500 Жыл бұрын
Thank you! We're all equal under the law, except the tax code/law.
@OnCashFlow Жыл бұрын
Never thought of it that way!
@wat20002 жыл бұрын
@oncashflow Just for some clarification. So only 2500 is the limit I can utilize even if I paid more than 2500 in interest over two different loans? Currently turbo tax is flagging me and saying “ Spouse student loan interest should be less than or equal to amount of student loan interest deduction claim on federal return. We have a column A and a column B. A = -3267 and for B I added wife’s interest together that = 5776. I know I’m doing something wrong just not sure where to fix. I appreciate you help and channel.
@OnCashFlow2 жыл бұрын
Yes, $2,500 is currently the limit per tax return, per tax year. That is for both your spouse and yourself. This IRS page should help: www.irs.gov/taxtopics/tc456