Education is one of the most important things in our lives, we all strive to get a better education. Schools and colleges are the best places where we can get a comprehensive education related to our field of interest. Many schools and colleges offer the best quality education to their students but to gain education we have to spend a decent amount of money. Many of us can’t afford the expense of higher education hence we opt for a student loan, this loan aids us to fulfill our dream of joining a renowned and best college or school for education. But regarding the student loan, there is one question that often clicks students’ as well as other people’s minds i.e. What is the 1098 E- Student Loan Statement?. To answer this question, let’s begin the article.
What is the 1098 E- Student Loan Statement?
What is the 1098 E Form?
The rate of interest individuals paid on student loans in a year is noted on the 1098-E tax form. Everyone who pays a minimum of $600 in student loan interest receives a 1098-E from their loan company. An individual will get a 1098-E from each provider to whom they paid at least $600 in loan interest. The 1098-E can be downloaded from your creditor’s website. Sign in to StudentAid.gov or contact the Federal Student Aid Resource Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913). if you’re not sure who your loan company is.
Keep in mind that if you had different lenders servicers, each servicer will send you a completely separate 1098-E. One may be able to claim a tax deduction for the interest they paid on the student loans. Please be informed that the altered total income for the calendar year impacts the sum of the student loan interest tax break.
Details About 1098-E Tax Form
- The Internal Revenue Service (IRS) offers educational tax breaks. They can be used to pay for college tuition or loan interest, as well as to increase college savings.
- On the Loan Servicer page, you can find a list of Federal Student Aid servicers for the Direct Loan Program and FFEL Program Loans acquired by the US Department of Education.
- Explore the IRS’s Tax Advantages for Education: Information Center for detailed information on the student loan interest deduction policies.
- The 1098-T shows how much students paid for college tuition and whether they are eligible for an income correction or a tax credit. Form 1098-T, Tuition Statement, is accessible from the IRS.
What is the 1098 E- Student Loan Statement?
The Federal income tax return can be deducted to some extent if you pay interest on an eligible student loan. The IRS Form 1098-E statement is used by loan providers to notify how much interest an individual pays on the loan amount. To help the student with their study and reduce their expenses the federal government has initiated this step. The Statement shows the student’s fees that may authorize a student for a tax credit.
The 1098-E- Student Loan Statement is used to calculate the student loan interest tax reduction. If students meet the following criteria, they can deduct up to $2,500 in student loan interest from the tax liability:
- Individuals are required by law to pay interest on their student loans.
- You were the one who compensated the interest.
- You haven’t filed your taxes as a married couple filing jointly.
- Individuals are not allowed to claim themselves as reliant on someone else’s tax return.
- The annual salary is below the threshold.
- Financial requirements
Is the Student Loan Interest Deduction Available to Everyone?
Your revised total income determines whether you are eligible to claim a student loan tax reduction on the 1098-E form. If someone has a high-income source this exemption is eradicated.
If you file as a single, head of the family or eligible widow(er), the exemption is lowered once the altered AGI reaches $70,000 and is removed once the AGI reaches $85,000. If you file a joint return with your spouse, the tax cut is reduced to $140,000 of altered AGI and removed at $170,000.
Conclusion
Student education loans are very prevalent among many people, it is provided by many private providers and lenders, and government agencies and in return, we have to pay the eligible amount of interest every month. To help the students and lower their expenses the federal government gives some tax benefits to the Student Loan Interest payer. The 1098 E- Student Loan Statement is sent by the lender to the student and it is used to notify the government how much interest is paid based on which the tax is exempted.
Frequently Asked Question
1. How to Get a Form 1098-E?
Ans: A duplicate of the 1098-E of interest costs in a tax year will be provided by the student loan provider. If the interest exceeds $600 it will be mentioned on the form.
2. What Happens If You Don’t Get IRS Form 1098-E?
Ans: If you haven’t received a form, please contact your creditor. The contact number can be found on the creditor loan statements or on the internet.
3. How can I find out how much interest I paid on my student loans?
Ans: The 1098-E tax form shows how much interest you paid on student loans over a calendar year. Everyone who pays a minimum of $600 in student loan interest receives a 1098-E from their loan company.
4. Are student loans considered income?
Ans: To assist pay for higher academic achievement, numerous students take out loans or accept merit scholarships. Student loans, luckily, are not taxable, so you might not have to report them as income on your tax filing, and there is no need to pay tax for such monetary help.
