How to Keep Paperwork for a Student Loan Tax Deduction

Many college students and graduates are unaware that their student loans may come in handy during tax season. As frustrating as it may be to keep the paperwork from your loan throughout the year, the information regarding your loan is important and necessary if you are looking for a deduction on your taxes. Here are some tips for keeping your student loan information organized for a possible tax deduction.

Instructions

Difficulty: Easy

1. Find a safe spot to keep your papers. This could be a file cabinet or a shelf that holds your other important documents. You may already have an accordion folder that holds your current statements. Just make sure that you have an independent folder or slot to keep your documents in and organized.
2. File according to date. The best way to access paperwork at the end of the year is by date. As each successive statement or notice arrives, place it in dated order in your folder or file.
3. Keep your receipts. It is important to keep your own records of receipt along with payment statements from your loan distributor. You will want to be able to make sure the figures add up to be correct before filing your taxes.
4. Be watching for the tax forms for your loan. Your loan will have an independent tax form, the 1098-E, with information you will need for your deduction. This will come in the mail after the first of the year. You must save this document, even if you have every other paper saved and filed.

Tips & Warnings

• There is a minimum requirement of $600 paid in interest of the loan to be qualified for the deduction.

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