Student loan int

[cathe]

Any of you have clients with student loans that are not getting the lenders to tell them how much of their payment in 2010 was interest? I have had a rash of them already. The lenders are saying my clients don't qualify beause they have not paid $600 or over in interest.

What's up with that?

Cathe

[KBTS]

The lenders are not required to send a form 1098 unless the interest is over $600. Some do, but most do not and the taxpayer needs to call or log into their account online to get the amount of interest paid.

[BP.]

log into their account online

And not from my computer, please!

[Koss]

Possible vs. Necessary

Great example of how the rules and logic of the tax code change depending on perspective, or depending on who is asking the question.

You (or your client) probably got a bonehead at some call center who somehow got the idea that if the interest is under $600 then it's not deductible by the borrower.

That's wrong, of course. As KBTS noted, the issue is that if the interest is under $600, the the lender is not required to issue a 1098. But that has no impact on the deductibility of the interest.

This is just a mirror image of those clients that somehow come to believe that if the interest on their savings account is under $10, then the don't have to report it as income on their tax return.

The interest is always taxable income to the recipient, but the lender doesn't have report it to the IRS on an information return if it's under $10.

BMK

[Davc]

The interest is always taxable income to the recipient, but the lender doesn't have report it to the IRS on an information return if it's under $10.

BMK

But from what I've seen on wage & income transcripts, they frequently do.