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I paid $139.15 in interest on my son's Stafford loan last year. Now I see that the 1098 is reported under his SSN. He has under $3,000.00 in income so that's a wasted tax deduction!
Does anyone know if I can apply for next year's loan under my own SSN? My wife and I plan on paying off the loan ourselves anyway (it's only ~2k a year because he got a scholarship).
Is the loan in your son's name or yours? You may be paying it, but, unless the loan is in your name, your payment would likely be regarded as a 'gift' to your son, which is, of course, not tax-deductible.
My son used some Stafford Loans when he got his MBA (then paid them back). I'm not sure that you would qualify for a Stafford Loan, since they are primarily for low-income students (apart from their parent's income). Maybe you could claim the tax deduction 'loss' as a "Loss" on your income tax? Otherwise, it sounds like your son is still your dependent... that's something.
BTW, Stafford Loans don't generally have to be paid back until 6-months after graduation. Why are you paying them now? ... (or has your son already graduated?)
The loan is in my son's name. I'm guessing we did that because we don't qualify for a Stafford loan.
We paid the interest early because it still accrues whether there's a payment due or not. However, I may rethink that strategy now that I know I'm leaving a tax deduction on the table. He is a sophomore.
Accrued interest while your son is in school will eventually capitalize and be added to his loan balance. I believe this occurs right before he enters repayment (after graduation). It's usually a good idea to pay off the accrued interest before it capitalizes.
Only the borrower (your son) can take the interest deduction.
The loan is in my son's name. I'm guessing we did that because we don't qualify for a Stafford loan.
We paid the interest early because it still accrues whether there's a payment due or not. However, I may rethink that strategy now that I know I'm leaving a tax deduction on the table. He is a sophomore.
That's only true if it's an unsubsidized Stafford loan. If it's a subsidized Stafford loan, then interest is taken care of by the government until graduation. Double-check to see what type of loan your son is taking out.
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