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| *The Commerce Journal>>>Other Taxes |
2006 Taxes? |
I'm a college student at CSUF and I took some loans. Would loans be applicable towards my 2006 Taxes? If so would this be a Schedule D that needs to be filed? I can really use this help because I'm trying to get some Financial Aid and I only made about $17k last year for three months. Please contact me. No loans are not applicable towards taxes. Interest paid on student loans would be deductible on tax return, but there is a limit of $2,500 on it. Schedule D is for capital gains/losses by the way. Student loans only effect taxes after you start paying them back as the interest that you pay is deductible. The loan itself is not deductible and neither the loan nor the interest have anything to do with Schedule D. Taking out a loan does not count as income, so there are no taxes on it. When you are paying back the loan, the interest is deductible. Fortunately, it is "above the line" as accountants say. That means it is on the 1040 and you don't have to itemize to use the deduction (that's Schedule A, not D). There is a $2,500 limit each year. The easiest way I know to get your taxes done correctly is to use an internet tax prep site. They will apply all the newest tax laws to get you the best refund you can legally have and you can usually see how much you are getting back before you pay the fee. There are several to choose from but I like this one because it donates part of your fee to charity. (And it's much easier to use than Block.) http://www.internet-taxprep.com/wichitas... or http://www.internet-taxprep.com/hopeworl... I've been doing taxes for clients since 2000. You do not have to claim the loans as income, not can you use them as a deduction (when you start paying them back, you can (maybe, depending on income) deduct the interest. What you can do is claim either the Hope credit (first two years of undergrad school), the Lifetime Learning credit (lifetime like it says) using Form 8863, or possibly the tuition and fees deduction (above the line deduction). The loans act like monies paid out-of-pocket. No Sch D required for this! Call your local Block office-you can sit with them free of charge and review this information-and receive planning advice also! H&R Block (worked there the past 8 tax seasons) You may be able to take a deduction for interest paid on a student loan (also known as an education loan) used for higher education. This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2006. Enter Student Load Deduction on line 33 of 1040. (No Schedule D). You may also take Hope Credit or Life Time Learning Credit. |
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