I will pay the loan out in 18 months. The loan amout was $30,000. I only recv'd about 300 a paycheck for the last year. Since I am getting paid that low amount instead of my $1500 a check, Is there somewhere when filing my return that I can add to to help my return amount? I am paying 8% interest on this loan. Kind of confusing but I am very curious. Earn Income Maybe? Is there a place on my w-2 that my employer should put this loan amont instead of income? I know that this is confusing but I need help!
2007-01-08 13:31:37 · 3 answers · asked by houstonray27 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
You will probably get a W-2 reflecting the total wages earned - $1500 x 52 = $78,000 and tax (Federal, State, FICA, Medicare, and other applicable taxes/deductions based on that amount should be shown.
The loan is an "after tax" transfer of funds which is of no benefit to you. It is the same as getting a bank loan and repaying it in increments of $1200/ week.
Interest on loans for personal debts are no longer deductible, haven't been for a long time. Hopefully, you have sufficient withholding, exemptions, medical deductions, stock, bond, and or property losses, property taxes, and other items to offset the amount due if any, to the IRS.
2007-01-08 13:50:20 · answer #1 · answered by PALADIN 4 · 1⤊ 0⤋
To be correct, on your pay stub the employer should show your entire income earned (the $1500), then the loan payment as a deduction from your net pay. It's not a tax deduction, so no, you can't show the loan payment on your tax return, and you have to show the entire amount of your income.
2007-01-09 00:10:48 · answer #2 · answered by Judy 7 · 0⤊ 1⤋
Even though you were receiving only $300 per paycheck, you will be taxed on the $1500 (assuming your employer does everything correctly). So, I am guessing that, yes, you will have some tax "issues".
2007-01-08 21:58:25 · answer #3 · answered by Wayne Z 7 · 1⤊ 0⤋