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How the new tax law affects tuition and student loans

Alyssa Pry
Personal Finance Reporter

The deadline to file taxes this year is just six weeks away, and filers are more confused than ever – mainly because of the government shutdown delays and tax law changes affecting millions of Americans.

Yahoo Finance teamed up with CPAs Meisa Bonelli and John Lieberman to tackle your questions in a special live tax Q&A.

A major concern for filers was how college costs and student loans would affect their taxes this year. There are 45 million Americans currently paying off a student loan, and with the cost of tuition rising, taxpayers are hoping for some relief.

When it comes to student loan interest, taxpayers can claim interest paid up to $2,500 for the 2018 tax year. For those who have cosigned student loans, whoever pays it gets to claim the loan interest on their taxes.

“The person who pays the loans in excess of $600 is going to receive a 1098 form,” Bonelli says. “The individual who paid the student loans throughout the year will be able to claim the deduction on their taxes.”

For students still in college, they can no longer deduct tuition or fees for books, housing costs and other college expenses. Form 8917 is no longer being used by the IRS, Bonelli says.

“For 2017, Congress retroactively made it so that tuition fees could be deducted, but now they’re gone so you cannot deduct your tuition and fees,” she says. “As of now, it’s off the table.”

If you have more tax questions, email moneyquestions@yahoo.com. We’ll be helping you with your taxes up to the April 15 deadline.

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