Congress proposes to change tuition-related taxes
Many Las Vegas residents who are paying for student loans and tuition have a hefty financial burden. If you have college debt, you might find some amount of relief through their tax return, but several aspects of taxes are now up for debate. One possibility is that your tax return on student loan interest may disappear altogether.
The recent tax reform proposals from both the U.S. House and Senate could mean changes to college tuition-related taxes. The House would remove student loans from tax deductions as part of their plan. It would also count waived tuition and company tuition support as taxable income, adding thousands of dollars in taxes owed.
Although these changes may seem dismal for those still paying for their education, the proposals also raise the standard deduction to twice its current amount. The House proposal would also stop considering loan forgiveness as a form of taxable income. Ideally, those with student loans would benefit overall. However, that might not always be the case.
With mounting interest rates and high tuition fees, education debt is a serious issue for students and graduates across the country. It’s still too early to tell how these new proposals would affect those paying for college, but some could find themselves owing more tax than they expected.
The burden of student loan debt can potentially affect tax debt. If you default on your loans, for example, there’s a chance that you also face difficulty with making payments to the IRS. Back taxes can add up as you struggle to keep up with other creditors.
While options such as deferment and forgiveness exist for student loan debt, various modified payment plans also exist for tax debt. If you have trouble with tax debt, a skilled attorney can describe the opportunities that are available to you.