Can I Omit My Student Loan Interest Payment?

[Anon-e-Mouse]

Jurisdiction

Wisconsin

I am using on-line tax preparation software. I had Student Loan Interest payments of $66.95 last year.

If I completely omit my student loan interest payments I am eligible to use the Free version of the on-line tax prep software, and eligible to file for free.

But when I enter my student loan interest payment the software tells me I have to upgrade to an expensive version of the software because Student Loan interest goes on a separate schedule. Bottom line, yes I'll get a couple more bucks in Federal refund if I claim my student loan interest deduction, but the upgrade to the expensive software is going to cost me a lot more than the additional refund I'd get from claiming it.

Would I be "filing a false tax return" if I just answer "no" to the question about student loan interest, because I don't want to claim it? I don't want to commit a Federal crime, but I also don't want to pay $60 or $80 more to file my taxes just in order to be able to claim my measly $66.95 in student loan interest payments. This will be the only year I'll have that problem -- I will be done paying off my student loans before the end of 2021.

 

[army judge]

Would I be "filing a false tax return" if I just answer "no" to the question about student loan interest, because I don't want to claim it?

Some questions are posed in such a way as they often answer themselves.

Congratulations, "mouse", you've posed such a question.

I don't want to commit a Federal crime, but I also don't want to pay $60 or $80 more to file my taxes just in order to be able to claim my measly $66.95 in student loan interest payments.

Some declarative sentences are often loaded with EXTRA information IF one has learned to "read between the lines".

This will be the only year I'll have that problem -- I will be done paying off my student loans before the end of 2021.

Here's another amazing thing life has taught me.

I rarely learn much when I'm talking, texting, or typing.

When I open my big eyes and ears, after I've closed my big mouth, I am bombarded with the answers to questions I never asked.

I hope I've helped you realize you're a very clever person.

 

[Anon-e-Mouse]

Some questions are posed in such a way as they often answer themselves.

Congratulations, "mouse", you've posed such a question.

[ ... ]

Some declarative sentences are often loaded with EXTRA information IF one has learned to "r


I hope I've helped you realize you're a very clever person.

So you're saying it is a Federal crime to not claim a deduction to which you are entitled?

 

[army judge]

So you're saying it is a Federal crime to not claim a deduction to which you are entitled?

Sorry, "mouse", I SAID nothing of the kind; nor did I TYPE any words that would lead a reasonable person to believe what you appear to allege hereinabove.

It is NEVER a crime to be truthful and honest when dealing with any federal agency.

It MIGHT be a crime (depending on several other factors) to conceal or deceive any of Uncle Sammy's bureaucrats, law enforcement agents, revenue collectors, official representatives, etc...

Most people fail to notice the paragraph above their signature line on the 1040 and other IRS tax forms that notifies the taxpayer that you sign your tax return under penalty of perjury and that you have examined the return and ALL underlying schedules.

Tax returns have become much more complex, especially for those who have international bank accounts and investments, S-Corporation filers, high wage earners, and business owners.

The "packaged" software solutions and other off-the-shelf tax packages sometimes miss critical forms, declarations, and other information required by the IRS in previous years.

The taxpayer may skip past sections they are unable to understand or are too impatient to plow through.

Taxpayers today are exposed to greater risks, which could cause some people to "fudge" items on the tax return a tad.

Bottom line, the penalty of perjury opens the taxpayer to some serious legal and financial consequences.

 

[justblue]

I'm tagging @Tax Counsel who is a Tax Attorney for you @Anon-e-Mouse

 

[Tax Counsel]

Would I be "filing a false tax return" if I just answer "no" to the question about student loan interest, because I don't want to claim it? 2021.

No. You are not obligated to claim deductions you are entitled to claim and failure to do so is not filing a false tax return. In particular, the government is not going to get worked up about not claiming some small deduction that is more of a hassle to claim than the benefit you get. The government is quite happy to take the extra tax you pay.

And despite Army Judge's implication to the contrary, it is not perjury to not claim that deduction, either.

 

[adjusterjack]

I also don't want to pay $60 or $80 more to file my taxes just in order to be able to claim my measly $66.95 in student loan interest payments.

Here's an idea. Download the tax forms from the IRS website, print them out, copy what you see on the screen, include your interest deduction, file a paper return.

Easy peasy.

 

[Tax Counsel]

Here's an idea. Download the tax forms from the IRS website, print them out, copy what you see on the screen, include your interest deduction, file a paper return.

Easy peasy.

Filing electronically does have it's advantages, though there is the fee the provider charges (if you don't qualify for free file). One of them is a faster refund delivery than sending in a paper return. Another is accuracy; there is much less risk of problems in return processing with electronically filed returns than paper returns. Paper returns must either be scanned or manually keypunched in, and both have increased risk of errors. If the student loan interest were more than $67 perhaps the extra work you suggest would be worth the hassle, but realistically that $67 is reducing tax maybe $16 or less since the OP qualifies for free file, and with free file he won't have the fee. I tend to agree with the OP that extra bit of savings he'd get out of this just really isn't worth it if bumps him out of free file.