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Is there a way to avoid paying taxes on money to repay student loans?
I know, I was dumb and didn't play the game well, so I didn't have a 529 plan. But, is there any way I can put money into a magical account that is tax sheltered specifically for the purposes of paying student loans? I was thinking about setting up a 529 and then pulling the money out right away, solely for the tax shelter, but I don't think it works that way. Any suggestions would be greatly appreciated. I really don't see how it's fair that I can get a tax shelter before I go to college, but have that monkey on my back paying for it after I went.
Thanks again!
1 Answer
- Anonymous1 decade agoFavorite Answer
Are you currently in school? If you are, then you can automatically deduct the money spent for qualified fees on your itemized tax returns. The school will give you a printout at the end of the year that lists the amount you spent on tuition. If you lived on campus, I believe that they will also list housing, room and board, and insurance costs on that form. You can deduct that immediately. After that, you need to itemize your deductions and be ready to present receipts if you are audited (unlikely).