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av578 · Oct 8, 2009, 10:55 AM

Dear Sir/Madam:

I need advise for filing 2007-2008 tax return.

1. My husband was studying in 2008 and I was paying the tuition fees. If we file a joint tax returns can we claim tuition credit (hope and lifetime learning credit). If yes, what documentation is required in the regard? - Do we need Form 1098T - who will issue this? He was on F1 and OPT through 2007-2008.

2. I was on OPT and then H1 B in 2007-2008. I had taken education loan for my studies from a bank in India (which also has a branch office in the U.S.). I am now repaying this loan - Can I claim hope and lifetime learning credit or any other tax credit for repayment of interest or principal? Do I need any documentation in this regard? Do I need a Form 1098E? I doubt the bank officials in India will issue a form (they gave me a routine bank statement)... and since the loan is taken from the branch in India, I am not sure if their U.S. branch will issue a form 1098E to me even though I remit the repayment amounts from the U.S. branch... but can I officially request them for this?. Or should I request my university to provide me with some documentation? Kindly advise.

Thank you very much in advance.

AtlantaTaxExpert · Oct 9, 2009, 10:06 AM

1) You should be able to file jointly under the Married option specified under First Year Choice in IRS Pub 519. On a joint return, you and your spouse are joint filers and thus all deductions by either filer count in the joint return. You should get a Form 1098-T from the U.S.-based higher learning institution.

2) On the education loan, you CAN claim the interest on the loan as an adjustment to income on Form 1040 or 1040A. It is unlikely that the Indian bank will issue Form 1098-E, but you should be able to get a statement from the bank as to how much of your repayments were interest and how much was principal. Only the interest is deductible. Further, the loan must be exclusively for the school tuition and fees! If the loan was also used to cover other living expenses, such as car, rent, etc. then it is NOT eligible for the school loan interest deduction.