Today TaxMama® hears from Sheronda in the TaxQuips Forum, with this common issue (edited). “Taxpayer paid off her student loan using a home equity line of credit (HELOC)?
buy canadian furosemide online https://mabvi.org/wp-content/languages/new/canadian/furosemide.html no prescription
Is the interest still deductible?”
Dear Sheronda and family,
This is a common question. These days, student loans get higher and higher as educational institutions keep raising their fees. It’s hard to get through college without going into debt. All too often, students default on those loans. When they do, the IRS can step in to grab the students’ tax refunds. And you cannot bankrupt student debt anymore.
To make life easier, students and/or their families often take out home equity debt to pay the loan off. The advantages are a lower interest rate – and a longer pay-off period.
The trade-off is that you lose the deduction for the student loan interest. But as Mike Reed, EA points out, the out of pocket cash savings from the lower interest rate far outweighs the tax benefit. In addition, if the HELOC is on the student’s own home, they might be able to deduct all the interest (on a loan of up to 0,000), instead of only the ,500 deduction available for student loans.
One more way to deal with student loans. There are a variety of government and exempt organization programs that will cancel the loan.
buy canadian lasix online https://mabvi.org/wp-content/languages/new/canadian/lasix.html no prescription
This is a tax-free benefit students can get in exchange for providing health or educational services in a variety of off-the-beaten path areas.
Think of Dr. Joel Fleishman stationed in Alaska in Northern Exposure.
And remember, you can find answers to all kinds of questions about student loans and other tax and business issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.
com link – it’s free!]
Please post all Comments and Replies in the new TaxQuips Forum .