I assume your question deals with tax deductibility of student loan payments if one is in private practice. The short answer is "no."




First thing to consider...loan payments are a repayment of borrowed capital and, as such, are not "expenses."




Secondly, to deduct such payments would result in a 100% deduction for education expenses -- when, in fact, the education may not qualify for deduction at all (if it is undergrad, leading to the basic degree required by the profession, etc. etc.).




If the education is post-grad, necessary to maintain or improve skills required by one's profession or occupation, etc. etc., then the education expense should be deducted either as continuing professional education (on Sch C if one is self-employed) or as employee business expense (on Sch A as a Misc Itemized Deduction, ( subject to the infamous 2% threshold) if one is an employee).




The INTEREST on the loan payments should follow the above treatment. If the education is deducted on Sch C, then I would deduct the loan interest on Sch C, also. If, however, the education is deducted on Schedule A -- then the interest would be non-deductible consumer interest (unless the underlying loan is home equity debt).




One should also consider the above-the-line deduction for Student Loan Interest -- and the education credits which may apply (HOPE and Lifetime Learning credits).

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Replying to:

Can student loans be a write off in a private practice?




thank you

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