UK Student Loan Interest - US Tax Deduction
Feb 3rd 2016, 5:20 pm
#1
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Joined: Jan 2007
Location: South Carolina, USA
Posts: 35
UK Student Loan Interest - US Tax Deduction
Anyone had any luck claiming the student loan interest deduction? I tried looking back through the forums, but the only posts I could see on the topic were quite old or vague.
I have a fair amount of loan debt from the UK. But I looked my universities up and all the institutions I attended do seem to have FAFSA numbers. Am I right in thinking then that the loan qualifies? As far as I can tell from the 1040 instructions that should be enough, as they doesn't stipulate that the lender needs to be US based.
Anyone had confirmation one way or another on this?
I have a fair amount of loan debt from the UK. But I looked my universities up and all the institutions I attended do seem to have FAFSA numbers. Am I right in thinking then that the loan qualifies? As far as I can tell from the 1040 instructions that should be enough, as they doesn't stipulate that the lender needs to be US based.
Anyone had confirmation one way or another on this?
Feb 4th 2016, 2:13 am
#2
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Joined: Oct 2003
Location: Avon Lake, OH
Posts: 5,270
Re: UK Student Loan Interest - US Tax Deduction
You can't claim UK student loan interest. Three tax CPAs have told me that.
Feb 4th 2016, 11:05 am
#3
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Joined: Jan 2007
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Re: UK Student Loan Interest - US Tax Deduction
This is the response I got from the TurboTax Answer Exchange:
"You can deduct student loan interst from a foreign country, as long as the loan meets the requirements of being a student loan (a qualified student loan is a loan you took out solely to pay qualified higher education expenses) and you have legal obligation to make the loan payments.
The year-end statement is sufficient enough to claim the interest. When going through Turbo Tax interview, simply enter the name of your Lender and amount in box 1, as if form is received.
You are correct that all amounts must be entered in U.S. dollars on the U.S. tax return. You may use "government resources" or "external resources" in the below link for conversion:
https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Currency-and-Currency-Exchange-Rates
Additional information:
https://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates"
I wonder if the key lies in the "a qualified student loan is a loan you took out solely to pay qualified higher education expenses" portion. If I'm honest some of my loan probably went to beer, which felt crucial to my education at the time, but would be a bit of a stretch to count as necessary to my enrolment.
"You can deduct student loan interst from a foreign country, as long as the loan meets the requirements of being a student loan (a qualified student loan is a loan you took out solely to pay qualified higher education expenses) and you have legal obligation to make the loan payments.
The year-end statement is sufficient enough to claim the interest. When going through Turbo Tax interview, simply enter the name of your Lender and amount in box 1, as if form is received.
You are correct that all amounts must be entered in U.S. dollars on the U.S. tax return. You may use "government resources" or "external resources" in the below link for conversion:
https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Currency-and-Currency-Exchange-Rates
Additional information:
https://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates"
I wonder if the key lies in the "a qualified student loan is a loan you took out solely to pay qualified higher education expenses" portion. If I'm honest some of my loan probably went to beer, which felt crucial to my education at the time, but would be a bit of a stretch to count as necessary to my enrolment.
Last edited by britoutofwater; Feb 4th 2016 at 11:10 am.
